Hope yet for SA’s junior miners as “thinly spread” Mantashe intent on keeping DMRE door open

SOUTH Africa needs to get “the red tape out of the way” to encourage the development of junior miners in the country and the decision to combine the energy portfolio with the former Department of Mineral Resources (DMR) was not helping.

That’s the view of Orion Minerals CEO, Errol Smart, who is also the chair of the junior and emerging miners’ forum and representative on the board of the Minerals Council.

Speaking at the Investing in African Mining Indaba in Cape Town earlier this month, Smart commented: “The more red tape that’s involved the easier it is to move next door and that’s what’s happening.

“We have fantastic geology – better than Botswana or Namibia – but those countries are attracting more investment than South Africa in junior mining. We have fantastic infrastructure and fantastic skills and abilities to do stuff, but we are not going to manage to do it until it is easier to do it.”

“I find it a bit disappointing that we have a DMR which is now a DMRE because there’s a whole extra can of worms that has been inherited. I just think they are spread too thin and, if you are spread too thin, things start falling apart.”

Orion is a JSE and ASX-listed junior developing the Prieska copper-zinc deposit in the Northern Cape. Asked why he was involved in South Africa as a junior miner despite this situation, Smart replied: “If you find something exceptional you will go anywhere despite the challenges.

“If you have a world-class orebody people will come. I was able to convince enough investors that, even, with the challenges, it was worth taking on.

“But my investors backed me on one fundamentally important thing which was that I had to get really involved and go in to make a change. That’s why I got involved in the Minerals Council and in the negotiations over the Charter.”

Asked just how realistic were the chances of achieving such fundamental changes in Government’s attitude, Minerals Council junior and emerging miners’ desk executive Grant Mitchell said: “We are chipping away and we have to keep this lobby going. I think we have at least opened the door”.

Said Smart: “There’s a very lively debate between us and the DMR and the minister. What tells me we are winning is that they take the time to listen. Where has a minister agreed to sit and debate and be interviewed on a stage by the representative of the junior miners in the country? When did that last happen?

“That tells me they know it’s important and they are paying attention. We see changes happening although they are irritatingly slow and we see the minister putting pressure on his colleagues in the cabinet.

“We are having a tax discussion. We attend meetings with Eskom. There’s a long way to go but they are starting to listen and engage.”

8 COMMENTS

  1. The DMR has failed to issue a prospecting permit for a 100% black women ( unfortunately race and gender must be identified )owned exploration company in a highly prospective geological setting. This has been going on since 2009.

    The corruption in the Witbank DMR Office accounted for much of the delay and it was suspected that bribes had to paid to secure the permit. The DMR head office, on taking over the functions of the Witbank Office, failed to issue the permit.

    Obviously Orion Minerals has more clout ( ie money} than a 100% BEE company. The conclusion to be drawn is that the DMR is far more obliging in this case with companies like Orion than getting a 100% BEE entity going.

    It appears that environment constraints also delay the issuing of prospecting permits. The other problem is that “environmental consultants” do not understand the approach to exploration and have more influence over the process which is a major problem for the process.

    Mantashe , given his record in the so-called alliance , has no more interest in getting 100% BEE companies going than his predecessors plus the DMR and E. The DMR and E is dysfunctional due to a lack of competence and work ethic.

    The problem is that the government, DMR and E. the anc etc does not understand the business of exploration and neither does the Minerals Council.

  2. Theoretically BEE ownership is no longer required for the issuance of a PR in terms of Mining Charter III – and since the PAMDEC case where the constitutional court found that the DMRE may not ignore the requirements of Section 17 of the Act when issuing a Prospecting Right or Mining Right (as they routinely have done in the past) there are many more requirements to fulfil to be issued a Prospecting Right than just who owns the applicant. You need a Exploration Work Programme, that must have some sort of scientific basis; you must have a Environmental Management Plan that is not just “cut ‘n paste”; and you must demonstrate both the technical skills and access to financial resources to execute the work programme. Far too many PRs have been issued to companies who have none of the above.

  3. Everything is against exploration is SA
    – Corrupt and incompetent DMR
    – No certainty in availability of properties. Samrad as total disaster.
    – Costs applicable to applications. Introduction of Nema has more than doubled costs. Suddenly you require specialist studies for PR. Ridiculous.
    – The public participation process in terms of Nema is onerous and has been hijacked by opportunistic lawyers.
    – Communities or rogue groups within communities disrupts processes.
    – BEE criteria for PR is uncertain. Its not included in charter and there is differences in interpretation between Minister and Regions.

    Thus, hats off to those who still try. Hopefully the rewards will be great.

  4. P – I have more than enough experience to complete an application for a PR – planning and implementing exploration programmes – being there and done that many times.
    The lack of competence in the DMR and E often means that the bureaucrat does not understand the exploration programmes and then asks stupid questions and often requires unnecessary work to done – at an increased cost to the company.

    NEMA is disaster – it applies more rigidly to exploration and not applied elsewhere with the same degree. Other course lawyers have to get involved ( they also need to diversify their sources of income – they have messed up the RAF) – the more incompetent people involved in the process just adds more risk.

    As for environmental ” consultants ” – have dealt with some who have an extremely delusional sense of their importance in the process. EWP’s – too many are cut and paste efforts. Not much professionalism there.

  5. it seems to me that the Government knows exactly what they are doing when it comes to granting prospecting rights to a company that’s not 100% African owned. They know that such coveted minerals are finite and only really benefit a few. They clearly have an agenda that others interpret as incompetence. In a few years’ time, you will see a sea of well-trained black-owned and operated junior mining companies receiving all kinds of prospecting mining rights.

    • Dear our wealth. You forget one thing. A PR is issued for a limited time period. You need to explore in that time. If you do not have the finances or access thereto you will lose it.
      Thus, you may think DMR is doing you a favor with this selected favoritism, but in actual fact they are destroying your project in the long term. You need money to go from PR to MR and lots of it. So good luck to you.

  6. Our wealth – it seems that you did not read the comment about the 100% black women owned company or maybe you did not understand the comments about their circumstances.

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