ANNUAL REPORT PRESENTATION TO
THE SELECT COMMITTEE ON
ECONOMIC DEVELOPMENT:
FINANCIAL YEAR (2012/2013)
Date: Tuesday 22 October 2013
Venue: Taj Hotel, Corner of St Georges and Wale Street,
Cape Town
1
Presentation outline
1.
2.
3.
4.
Vision and Mission
Annual Financial Statements
Branch Performance Information
Conclusions
2
Vision and Mission
Vision 2014
– A globally competitive, sustainable and meaningfully
transformed mining and minerals sector
Vision 2025
– A leader in the transformation of South Africa’s economic growth
and sustainable development by 2025
Mission
– Promote and Regulate the Minerals and Mining sector for
transformation, growth, development and ensure all South
Africans derive sustainable benefit from the country’s mineral
wealth.
3
Annual Financial Statements
Financial Performance
4
Overall Financial Performance
1.
The budget for the department was R1.176 billion for the
2012/2013 financial year , of which R1.173 billion or 99.4% was
spent.
– R395.914 million or 99.6% of the compensation of employees budget
was spent.
– R 228.084 million or 99.9% of the allocated goods and services budget
was spent.
– R525.110 million transfer to entities was fully spent in line with its
purpose.
– R24.556 million allocated towards capital assets was fully spent.
2.
In relation to issues raised by the Auditor General , the department
has developed and is implementing an action plan to address the
route cause of the problem and this will be monitored closely.
5
Expenditure per economic classification
6
Transfer Payment to Entities
Purpose of transfer
Recipient
• R454.2 million was transferred
in terms of the establishing act
of the entities.
• R18.3 million was for research
to prevent ingress of water
into underground
• R50 Million was transferred for
Mine Rehabilitation projects
7
Expenditure per programme
8
Statement of Financial Position
Economic
Classification
Current Assets
Current Liabilities
Net Assets
2012/13
2011/12
Variance
R’000
R’000
R’000
15,241
28,456
12,871
26,327
2,370
2,129
Variance Explanation
The asset base decreased by
46.44% from last year and is
attributable to the reduction in
the bank balance and the
-13 215 receivables.
The decrease by 50.94% in
-13 456 liabilities is due to decrease to
voted funds to be surrendered to
the National Revenue Fund and
decrease in transactions that has
not yet gone through the bank at
year end.
241
9
Performance Information
Performance per Branch
10
Overview of Performance Information
1. The activities of the Department Of Mineral
Resources are organised in the following
four programmes:
–
–
–
–
Programme 1:
Programme 2:
Programme 3:
Programme 4:
Administration
Promotion of Mine Health and Safety
Mineral Regulation
Mineral Policy and Promotion
2. The achievements, challenges and corrective
measures are outlined from pages 13 to 68
of the annual report.
11
Programme 1
Financial Administration Branch
Purpose:
To provide strategic and administrative support
services to the Ministry and the Department
12
Key Achievements
1. Improve services delivery and the turnaround
times for processing transactions
– Customer satisfaction index of 3.35 was achieved.
– 72 Defined turnaround targets were achieved
2. Provide reliable and timely information
— Reporting calendar was developed and all reports
were submitted within the prescribed timeframes.
13
Key Challenges
1. Educate and empower stakeholders
– The department still need to improve on the
irregular expenditure. The department’s approach
is to have a zero level of irregular expenditure.
– 94.97% of the invoices were paid within 30 days,
the department intend to improve this to 100%.
2. Filling of vacancies
– Key senior management posts became vacant
during the year under review
14
Corrective Measures
1. Educate and empower stakeholders
– The Department will continue to raise awareness
on internal control processes to improve
compliance with laws and regulations.
– Sanctions are being imposed on transgressions
with processes
2. Filling of vacancies
– CFO post has since been filled, and other
remaining posts are being filled.
15
Programme 1
Corporate Services Branch
Purpose:
To provide strategic and administrative support
services to the Ministry and the Department
16
Key Achievements
1. Communicate DMR programmes and policies
– Website and intranet updated in a timely manner and current
– Successful Media briefings, public participation engagements and
positive and balanced newsletters published and broadcast
– Approval of internal communication strategy
2. Contribute to skills development
– 16 mining career awareness initiatives were held for
communities and universities.
– The 58 bursaries offered in 2011/2012 to study towards mining
related qualifications were sustained during the reporting period.
17
Key Achievements
3. Develop and review internal processes,
guidelines and policies
– Reviewed 17 policies and mapped 19 business
.
processes
18
Key Achievements
5. Ensure compliance with HR legislation
– Financial disclosures submitted within
prescribed time frames
6. Ensure Implementation of National Vetting Strategy
– All new employees were screened as well as
service providers and target for vetting was
also exceeded
19
Key Challenges
1. Contribute to skills development
– Prospective bursary holders were turned down by prospective
funders because among other things they did not meet the
entrance requirements.
2. Attract, develop and retain skills
– % Reduction in Staff Turnover – Target not achieved due to
retirements, transfers and promotions to other departments and
organisations.
– Inability to retain and attract inspectors
3. Ensure compliance with HR legislation
– Performance Agreement submitted within prescribed time
frames
20
Corrective Measures
1. Attract, develop and retain skills
– We are currently finalising the review of the department retention
strategy in order to deal with the high turnover rate.
– The department has embarked on a learner inspector programme
where 50 graduates will be placed at different mines to undergo
experiential training which will result in fully qualified inspectors.
2. Contribute to skills development
– Increase awareness in relation to processes to be followed by bursary
applicant.
3. Improved turnaround times(Deadlines)
– The department will strive hard to meet deadlines of submissions of
Performance Agreements and Financial Disclosure Forms
– Improve turnaround time in filling vacant posts.
21
MHSI MANDATE AND MISSION
Purpose
To execute the Department’s mandate to safeguard the health
and safety of mine employees and people affected by mining
activities.
Objective
The MHSI strives towards a safe and healthy mining industry.
This is to be achieved by reducing mining related deaths,
injuries and ill health through the formulation of national
policy and legislation, the provision of advice, and the
application of systems that monitor and enforce compliance
with the law in the mining sector.
22
Key Achievements
1. Promote Health and Safety
– 9% improvement in all fatalities from 123 in 2011 to 112 in
2012, which is the lowest fatalities ever reported.
– Platinum and coal sectors have, for the first time in two years,
recorded a reduction in fatalities, of 24% and 8% respectively.
– 35% reduction in fall of ground (FOG) fatalities from 40 in 2011
to 26 in 2012. The coal sector went, for the first time ever, for
more than twelve months without a FOG fatality.
– Transport and mining fatalities decreased by 24%, from 38 in
2011 to 29 during 2012.
– 7% reduction in occupational diseases reported by the mines.
– Audits
and Inspections were exceeded by 6% and 8%
respectively.
23
Key Achievements
2. Develop and review internal processes
– Reviewed the South African Mines Reportable Accidents
Statistical System (SAMRASS) codebook and guideline for mining
within 100 meters of structures, buildings etc. which may require
protection.
– Developed the Conveyor Belt Guideline and Fatal Ruling
Procedure.
3. Human Resource Development
– 14 assistant Inspectors are undergoing inspector training at
various regional offices.
– 5 learner inspectors, who have been recruited as bursary
holders, have been placed at a mine for experiential training.
– 71 officials attended technical and administrative courses.
24
AMR: OCCUPATIONAL DISEASES
All Mines
2010 and 2012
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2010
2011
2012
Silicosis
1742
1286
1420
PTB
4452
3070
2838
NIHL
1212
1229
1075
PN
80
91
86
Asbetosis
29
11
19
SiTB
249
555
126
Other
406
202
438
Total
8170
6444
6002
25
RSA
Total accidents
Fatality and injury rates per million hours worked
2003 - 2013
6
0.4
0.34
5
4
3
0.35
5.10
4.77
4.62
4.19
0.27
0.3
4.05 3.97
4.13
0.21
0.2
3.88
4.08 4.09
3.96
0.21
0.25
3.45
3.30
0.20
3.1
0.16
3.43
3.21
0.16
3.21
3.03
3.02 2.97
0.2
3.00
2.49
0.16
0.15
2
0.12
0.11
0.11
0.1 0.1
0.09
0.1
1
0.05
0
2003JAN
MAR
MAY
JUL
SEPT
NOV
2004JAN
MAR
MAY
JUL
SEPT
NOV
2005JAN
MAR
MAY
JUL
SEPT
NOV
2006JAN
MAR
MAY
JUL
SEPT
NOV
2007JAN
MAR
MAY
JUL
SEPT
NOV
2008 JAN
MAR
MAY
JUL
SEPT
NOV
2009 JAN
MAR
MAY
JUL
SEPT
NOV
2010 JAN
MAR
MAY
JUL
SEPT
NOV
2011 JAN
MAR
MAY
JUL
SEPT
NOV
2012 JAN
MAR
MAY
JUL
SEPT
NOV
2013JAN
MAR
MAY
JUL
SEP
NOV
0
RSA injury rates
RSA fatality rates
Linear (RSA injury rates)
Linear (RSA fatality rates)
26
Occupational Safety
1 Jan - 31 Dec
2011
Sector
Gold
Platinum
Coal
Other
Total
Fatalities Rate
51
37
12
23
123
0.17
0.09
0.07
0.11
0.10
1 Jan - 31 Dec % Change
in actual
2012
Fatalities Rate Fatalities
53
0.18
4
28
0.07
-24
11
0.06
-8
20
0.08
-13
112 0.10
-9
27
Actual Fatalities and Rates per Region
Regions
Gauteng
NW - Klerksdorp
NW - Rustenburg
Free State
Mpumalanga
Limpopo
KwaZulu- Natal
Northern Cape
Western Cape
Eastern Cape
All Mines
2011
29
11
34
17
18
9
2
3
0
0
123
rates
0.14
0.07
0.14
0.21
0.10
0.08
0.08
0.04
0.00
0.00
0.11
2012
31
9
25
12
14
15
1
3
2
0
112
rates % Change
0.16
7
0.08
-18
0.11
-26
0.15
-29
0.07
-22
0.13
67
0.03
-50
0.04
0
0.14
100
0.00
0
0.10
-9
28
Occupational Safety
Fatalities*
1 Jan - % Change
Commodity 1 Jan - 30
Gold
Platinum
Coal
Other
Total
Sept 2012
37
22
8
11
78
30 Sept in actual
2013 Fatalities
29
-22
21
-5
5
-38
12
9
67
-14
29
Occupational Safety
% Change
30 Sept in actual
Injuries
2013
811
-34
982
-4
176
-12
159
-27
2128
-20
Injuries*
1 Jan Commodity 1 Jan - 30
Gold
Platinum
Coal
Other
Total
Sept 2012
1236
1023
200
217
2676
30
Key Challenges
1.
2.
3.
4.
Occupational Safety.
Occupational Health.
Skills Development.
Illegal mining.
31
Corrective Measures
1. Occupational Safety.
– Monitor compliance and implement enforcement measures
where necessary in line with the legislation and enforcement
guideline.
– Encourage mines to implement measures to protect women’s
safety and security.
– Arrange regional quarterly tripartite forum meetings to share on
health and safety information.
– Monitor the implementation of 2011 Summit commitments on
elimination of fatalities and injuries.
– Encourage mines to be more vigilante during fourth quarter of
the calendar year.
32
Corrective Measures
2. Occupational Health.
– Implement the strategy for enhancing the health
of workers including on TB, HIV, Aids and noncommunicable diseases.
– Collaborate with social partners in monitoring
the
implementation
of
2011
Summit
commitments on elimination of silicosis and
NIHL.
– Conduct verification of mine sampling on dust
measurements and results.
33
Corrective Measures
3. Skills Development
– Collaborate with MQA to enhance skills development
including on ABET, bursaries, artisans, artisan aides and
jewelry making.
– The MQA has established regional offices in rural FET
colleges in the Northern Cape, Free State, Mpumalanga,
North West, Limpopo and Eastern Cape.
– Implement the Certificate of Competency Examination
model.
34
Corrective Measures
4. Illegal mining.
– Stakeholder Forums, established by the Minister,
continue to implement measures to combat the illegal
mining activities in the respective provinces.
– Minister convened stakeholder meetings and site visits to
draw the public’s attention to the extent of illegal mining
activities in the Roodepoort area and ensure that
measures are implemented to ultimately eliminate the
illicit activities.
– Collaborate with the relevant law enforcement agencies
to ensure that there is a national effort to combat illegal
activities.
35
Programme 3
Mineral Regulation
Purpose
To regulate the mineral and mining sector to ensure economic
development, employment and ensure transformation and
environmental compliance.
Objective
To transform the mineral and mining sector into one that
competitively contributes to the sustainable development in
the country.
36
Key Achievements
1. Promote Job creation
– Implemented 41 Small Medium Micro Enterprise(SMME) development
projects. These projects were implemented in rural areas where mines
operate
– Implemented 94 Local Economic Development (LED) projects towards
sustainable job creation
2. Implement transformation policies/legislation
– The department continued with consultations /engagements with
communities and held industry workshops.
– Approved a total number of 56 new mining projects with a
potential to create 11052 number of long term core mining jobs
with a projected expenditure mines of R 7 272 billion.
3. Monitor and enforce compliance
– 2 595 different types of inspections were done to monitor and
enforce compliance
37
Key Achievements
breakdown per province
REGIONS
NW
GP
No. of
consultation/
Engagement
/industry
workshops
9
7
No. of
inspections
361
182
FS
NC
WC
KZN
EC
13
10
4
16
37
246
280
237
209
133
LP
MP
TOTAL
24
29
120
458
438
2 544
38
Key Achievements
Interventions to address socio economic issues in provinces:
– Free State: Finalised the implementation of community
infrastructure projects which includes among others the crèche in
Zamdela.
– N Cape: Intervened in community conflicts within Schmidsdrift,
Namaqualand as well bulk infrastructure projects within Joe
Morolong municipality. Also new Manganese projects including
Kudumane, with great potential for job creation and injection of
further investment into the N Cape economy.
– N West: Launched infrastructure projects within the Bojanala
district (Rustenburg) – schools, platinum housing projects.
Supporting government in implementation of the Presidential
package. Resolved a number of challenges facing Taung – their
Prospecting Right issues, etc.
39
Key Achievements
Interventions to address socio economic issues in provinces:
– KZN: Established a task team that works on the RBM issues. Situation
stabilised and socio economic projects launched. The recent ones being
housing projects at four communities of Mbonambi, Sokhulu, Dube and
Mkhwanazi.
– Mpumalanga: Held a successful Mining Lekgotla in November 2012,
comprising stakeholders in Mpumalanga.
• A pledge was signed by stakeholders and implementation is ongoing.
• One key outcome of this Lekgotla was a need to coordinate
implementation of SLPs at a district level, as well as strengthening
consultation and participation of traditional leaders in mining issues.
– Limpopo: Conducted several community engagements with traditional
leaders within greater Sekhukhune, to address ongoing mining and
community conflicts and to also implement the socio economic development
interventions in support of the Presidential package.
40
Key Achievements
Interventions to address socio economic issues in provinces:
– Gauteng: Launched a number of socio economic projects as well as
approval of some clay, gold and gravel mining projects.
– Western Cape: Worked with provincial government and City of Cape
Town in addressing Land Use Provincial Ordinance(LUPO)
challenges faced by mines. Put in place a Task Team and developed
proposals on mapping the LUPO process as well as approval of
some new mining projects with job creation and economic potential.
– Eastern Cape: Fast tracked the Implementation of SLP project within
Mbizana, which was launched during October 2013 as well as others
within Libode , which are labour sending areas.
– The Department continued to work with all the Stakeholders in the
mining industry to avoid job losses.
41
Key Achievements
Progress with the streamlining of administrative processes:
– SAMRAD was commissioned in April 2011, with a view of ensuring
transparency, and accountability in decision making
– Development of the system is an ongoing, and critical for strategic
mineral resources management.
– Improvements and challenges are being addressed on an ongoing
basis.
– The system was initially launched as an application platform, and got
upgraded to include application modules for Mining Rights, ancillary
applications such as Section 11, 102, etc.
42
Key Achievements
Progress with the streamlining of administrative processes:
– System has addressed three critical risks to the integrity of
regulatory framework, and perceptions of impropriety:
• Perception of tampering with records by officials
• Order of receipt of applications
• Land availability, which is freely available at time of application.
• Modules to enable project mineral resources management,
including project management of a Right or Permit.
– Challenges faced by small operators around access to system from
rural and remote areas- being attended to, through use of stand
alone computer at regional offices as well as community workshops
on licensing.
43
Key Challenges
1. The continuous need to increase capacity to
enforce compliance at all mines.
2. Global economic challenges and the industrial
relations challenges resulted in fewer jobs
created.
3. Few applications from HDSA controlled
entities as a result of among others , the
barriers of entry such as funding .
44
Corrective Measures
1.
Strengthening capacity of regional offices in respect of:
– Social and Labour Plans(SLP),
– Mine Economics,
– Transformation components and monitoring and evaluation units.
2. Further development of SAMRAD to improve efficiency. This will
include alignment with other IT systems, including revenue
management and statistics collection.
3. Increase the rate of enforcement and compliance inspections and
impose statutory notices where companies are found to be non –
compliant
4. Create capacity in anticipation to implement the integrated licensing
system in respect of mining , environment and water authorisation ,
to improve the ease of doing business.
45
Programme 4
Mineral Policy & Promotion
Purpose
To formulate mineral-related policies and promote the
mining and minerals industry of South Africa, making it
attractive to investors.
Objective
Through research, provide relevant information to enhance
global competitiveness, review policies and formulate
legislation to achieve transformation and attract new
investment into South Africa’s minerals industry.
46
Key Achievement
1. Ensure transformation in the sector
– MPRDA and MHSA Bills drafted and certified
2. Promote investment in the mining sector
– Strategic and technical partnerships established( e.g.
Russia MOU on Platinum Group Metals development).
– Continuation of promotional activities e.g. Publications
– Streamlining of licensing processes incl. DMR, DEA and
DWA.
– Established the Platinum Task Team to jointly respond on
the challenges facing the sector.
– Undertook a Policy Impacts study for investment in
mining.
47
Key Achievements
3. Promote sustainable resource use and
management
– Rehabilitated 13 derelict and ownerless mine
sites
– Completed the strategy for management of mine
residue deposits
– Completed the construction of the Florida Lake
Canal in respect of ingress control for AMD
48
Key challenge
The key challenge is to to attract and retain skills
49
Corrective Measure
Collaborate with HR and industry to introduce
innovative skills development programmes and
also attracting the relevant categories of skills
50
Concluding remarks
1. The Department assisted by the Audit
committee will monitor closely the
implementation of management action plan
to resolve the Auditor General findings.
2. In addition to the programmes that have
been highlighted, there are other projects
that the department is involved in to pursue
government and national objectives.
3. These projects include among others:
51
Concluding remarks
– Initiatives to stabilise the mining industry( peace
and stability framework as well as the Deputy
President led framework for sustainable mining
industry)
– Support to the Presidential package in respect of
improving housing and living conditions of mine
workers and improving socio-economic conditions
around mining communities.
52
Concluding remarks
– Shale Gas: A report on the potential , as well as the
socio-economic and environmental impact
assessment was concluded. Regulations were
approved by cabinet for public comments.
– Coal resources and reserves study was completed
– South Africa as Chair of the Kimberly Process.
– Preparations to host the International Geological
Congress.
53
Concluding remarks
3. The Department would like to thank
Honourable Members for bringing to our
attention, issues as raised during oversight
visits, and we would like to assure
Honourable Members that these will continue
to receive our priority in our activities.
54
THANK YOU.
55