THE South African government would issue a tender for its proposed minerals exploration cadastre before the end of next week and said it would gazette an exploration implementation plan once it had been assessed by the Department of Mineral Resources and Energy (DMRE) and vetted by the cabinet.
Speaking at the Junior Indaba, an online conference, Thabo Mokoena, director-general of the DMRE, said both efforts demonstrated progress as the government sought to breathe new life into the country’s minerals exploration industry.
Mokoena’s comments, however, came amid swingeing criticism of the DMRE’s performance by Paul Miller, a director of AmaranthCX, a mining consultancy. “Secrecy runs as cover for corruption and incompetence,” Miller said in a hard-hitting presentation.
The government was at fault for perpetuating regulatory uncertainty in the mining sector by failing to implement an aspect of the third Mining Charter which called for black economic empowerment (BEE) targets to be removed for mineral exploration companies, Miller said.
The current cadastre was also dysfunctional, whilst departmental regional offices were understaffed, poorly resourced, and riddled with corruption, he said.
Miller also had some choice words for the Minerals Council South Africa which represents the industry in its dealings with the government. Miller said the council was unable to operate independently as it was intimidated by the government.
“Every prospector or miner has a regulatory gun held to their heads for every licence they have – and can be punished for doing or saying the wrong thing, at any time. Politicians and officials have extraordinary discretion in our regulatory regime and with it comes extraordinary power,” Miller said. The government was “not afraid” to use this power, he added.
Miller’s criticism drew a retaliatory comment from Roger Baxter, CEO of the Minerals Council, who in a later presentation at the Junior Indaba asked whether Miller had “reached out” to mines minister, Gwede Mantashe.
“I’d be very interested to hear that because, as Paul said, he’s got no vested interests in South Africa. So it’s very easy to be a critic, but quite difficult to be constructive and go into a conversation to try and drive issues”.
Nonetheless, Miller’s comments hint at the growing frustration in South Africa’s mining sector that unattractive business regulations could see it become a by-stander as global economic recovery and an increase in public policy lean towards decarbonisation – twin developments that have powered commodity prices for copper, iron ore, lithium and platinum group metals.
Speaking at the Minerals Council’s annual general meeting last week, Mantashe acknowledged the current cadastre, known as SAMRAD, was “a nightmare” to operate. There was an estimated eight-year backlog in prospecting and mining licence applications that had to be worked through.
Mokoena said DMRE had addressed these backlogs up to 2016 and that the exploration plan had been submitted for his approval ahead of its passage through ministerial economic clusters, the cabinet’s sub-committee, and then cabinet itself – ahead of its gazetting.
First, however, he promised to open a new mineral cadastre to tender. “It will be out next week. We can start there in terms of a timeframe,” said Mokoena. He also said troublesome Mpumalanga and Limpopo DMRE district offices had been purged of their corrupt practices whilst the majority of some 60 regional office vacancies had been filled.
Mokoena acknowledged it took time for departmental officials to grasp the broad changes contained in the Mining Charter revision of 2018, but that the DMRE was no longer asking exploration firms to provide details of their proposed BEE deals.
An industry proposal for flow-through shares, a system whereby investors are provided with tax incentives if they buy the shares of junior mining companies, had yet to see the light of day, however. Baxter said the matter was still with the National Treasury, but he provided few other details of its progress.
