After the Bell: Botswana transparently displays what SA’s DMRE may reluctantly provide

9 Jan 2023

At some point over the next three months — but don’t hold your breath — the South African mining industry should know if the Department of Mineral Resources and Energy (DMRE) has finally procured a functioning mining cadastre to replace its utterly useless Samrad system for applying for mining and prospecting rights.

A mining cadastre is an online portal that allows the public, free of charge, access to view existing mining rights, exploration permits and related stuff, as well as the known geological features of a mining jurisdiction. It brings transparency to the sector, serving the interests of all stakeholders.

The disaster that is Samrad is the main reason behind a massive backlog of applications for mining rights that has starved South Africa’s mining industry of badly needed investment.

The DMRE only revealed in February 2021 that the logjam had reached over 5,000. In November 2022, it said that had been reduced to 2,625 — still a number that hardly inspires confidence.

Over this period, the DMRE had been tendering for a Samrad replacement that would have involved building a new cadastre from scratch — a pointless exercise as proven, off-the-shelf cadastral systems are available. The Minerals Council SA urged the DMRE to take one of the proven options and even offered to help pay for it.

This raised suspicions that the DMRE wanted to keep the state of play of mining applications under wraps to conceal its incompetence and corruption. But the hopeless and hapless DMRE could hardly pull off this transparent stunt.

Light finally emerged at the end of this long shaft in October 2022 when DMRE director-general Jacob Mbele made a commitment that a cadastre would be procured by the end of the financial year, which is 31 March.

Botswana and Namibia

The DMRE has since said it was “benchmarking similar systems in countries that have successfully implemented a cadastral”, notably Botswana and Namibia.

Both countries use an off-the-shelf system provided by Trimble, which is headquartered in Colorado. So I thought I would check it out, and compare it with Samrad. I did so between Christmas and New Year, and the results were illuminating.

I tried to log on to Samrad, but was immediately stymied by the fact that even online systems at the DMRE get Christmas off. I am not making this up.

“ALL USERS ARE KINDLY INFORMED THAT SAMRAD WILL NOT BE AVAILABLE FROM 23rd DECEMBER 2022, IT WILL BE REOPENED ON 03 JANUARY 2023.

“Wishing ALL SAMRAD users Merry Christmas and Happy New Year!,” read the message on the site, with its curious use of upper-case letters.

At this stage in the 21st century, the DMRE appears to have no clue about how an online portal is meant to function — the whole point is that it does not require a human sitting at a desk. Imagine if you had a mining right due to expire on 31 December and were desperately trying to get some clarity on the situation. Sorry, the portal is taking its annual leave!

Then, also between Christmas and New Year, I checked Botswana’s cadastre portal. You can check it out yourself here.

It took me about two minutes to register as a user. If I had added additional details, I would have been able to do a number of things, including submitting applications for new licences or permits, or applying to renew existing ones. You can also submit payments or reports, or mineral discovery and mine closure notifications. Licence ownership transfers can be requested — important if a mining company has been acquired by another — and applications made to relinquish land no longer required, or for extensions for mine expansion. Inspection services can also be requested.

But you need not be a registered user to view the map portal, which is interactive and provided so “the public can view and search all of Botswana’s mineral concessions”.

The map is colour-coded, with red denoting an active mining licence, yellow a minerals permit, purple a development licence, green a prospecting licence and so on. Diagonal coloured lines signal inactive licences and permits.

When you click on a coloured area, you will find out things such as the company with the licence, when the licence was granted, when it expires and the commodity in question, among other information.

In short, it allows prospective investors to see what is happening on the ground and the public who benefit from Botswana’s resource wealth to see the same. Namibia’s portal is similar.

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Trimble’s portal is the one the DMRE must be examining if it is benchmarking the experiences of Botswana and Namibia. Trimble, in 2015, acquired Spatial Dimension, a pioneer in such technology which was founded in Cape Town in 1999, and this made-in-South Africa unit has been at the forefront of Trimble’s work on this front.

The stakes are very high, and the DMRE’s failure to get this right has been hugely costly to the mining industry, investment environment and the wider economy.

For years, the DMRE’s stated goal has been for South Africa to — within five years — account for at least 5% of global mining exploration spend. The “five-year” timeline is permanent and South Africa’s global share of such spending has been mired at or below 1% for several years. In 2021 it stood at only 0.76%.

Tens of billions of rands or more in investment have been lost as a result, and not just at the exploration phase.

Mining has long timelines and it can take decades for a new mineral discovery to translate into a working mine.

South Africa still has an astonishingly rich mineral endowment and much of it remains to be discovered.

Mining accounts for almost 9% of South Africa’s GDP, employs almost 460,000 people, and, over the past couple of years, threw the Treasury a lifeline through vastly higher taxes and royalties on the back of red-hot prices and profits.

Samrad train smash

It would be contributing more to the economy and employing more workers if it were not for the train smash that is Samrad, and if the DMRE had long ago taken Botswana’s route, which is also a recent development.

But it could have led the way instead of reluctantly following. This is an extremely urgent and pressing matter, so surely BEE and other onerous requirements can be waived to address it.

It all begs the question as to why the DMRE seems so hesitant to provide the kind of transparency about licences and permits that Botswana now provides.

My hunch is that there has been so much skullduggery and ineptitude that the DMRE wants to keep such matters opaque. There are concerns that permits have been granted for ecologically sensitive areas or to companies that have no mining experience — that kind of thing.

For over two years, consultancy AmaranthCX has been shining some light on the murk through innovative mapping initiatives.

Returning to Samrad, I decided to give it another go earlier Monday. The system was back from its holiday on the coast, but did not seem all that refreshed.

I tried to register as a user and was informed by the system that I had, but when I tried to log on, it did not seem to recognise my user name or password. When I chose the option, “forgot password”, a message was generated saying, “failure sending mail” — trust me, there was a viable email address linked to my profile.

So we wait and see if the DMRE finally gets a cadastre along the lines of the Botswana model.

Pointedly, no mention was made of this in any of the economic proposals floated at the ANC’s 55th conference or the January 8th statement read by President Cyril Ramaphosa on Sunday.

And who knows — things are probably such a mess that it may take the service provider months just to compile and make sense of the data.

But in the end, hopefully, the application process will go far more smoothly — without holiday breaks — and the fog will be lifted over who has what.

It’s a fog the DMRE may not want to see lift, but it has little choice in the matter if it doesn’t want the sun to set on South Africa’s mining sector.

Happy investing. DM/BM

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Business Maverick

Botswana and Namibia

Samrad train smash