THE South African government’s mineral cadastre was “broken”, according to PwC, a consultancy which said online applications for mineral prospecting and mining rights needed urgent modernisation.
Andries Rossouw, energy utilities and resources leader for PwC, cited a litany of grievances among mining firms regarding SAMRAD (South African Mineral Resources Administration System) which was developed by government for a modest R3.5m nearly a decade ago.
SAMRAD’s problems – which have come in for regular criticism in the local industry – includes a lack of transparency, and extend to a failure of partnership between communities, mining firms, and even government departments. SAMRAD is administered by the Department of Mineral Resources & Energy.
“When you apply for a prospecting right, you cannot see on the system if any one has applied for prospecting right on the same piece of land. There is no transparency. That’s a real shame,” said Rossouw.
He also said that allowing three years to develop a prospecting right – which can take a year to be granted – (renewal for another three years on application) was insufficient time as it takes on average “… in excess of ten years” to take a prospect to a mine.
“You don’t have adequate tenure to either convert to a mine or sell an exploration property to a big mining company as they’ll (not) know they have security of tenure.
“A couple of things need to be fixed: certainly the system, the whole integration between various departments, integration of between approvals and communities … there is a whole partnership concept that needs to be dealt with in getting rights approved, getting them approved quickly, having adequate transparency in the system so you don’t apply for something that someone else has got on there,” he said.
There was also inadequate checking on companies that had failed to use their mineral rights and were effectively sterilising potentially viable resources – one of the major points of ideology underpinning the government’s ‘use it or lose it’ principle.
Rossouw’s comments, unusual in their force for a consultancy, were made following the launch of PwC’s Mine South Africa 2020 report which indexes the production and financial performance of the country’s top 25 mining companies by market capitalisation (more than R200m in the current review).
In the review, Rossouw said that mining could be a foundation stone in the recovery of the South Africa economy. In the year under review, mining firms had improved earnings before interest, tax, depreciation and amortisation (EBITDA) by some R53bn to R181bn, a 41% increase year-on-year.