EXCLUSIVE — Mantashe reigns as the minister of no new mining as DMRE lacks admin capacity

A dump truck transports excavated rock at the Mafube open-cast coal mine, operated by Exxaro Resources and Thungela Resources, in Mpumalanga on 9 September 2022. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

By Ed Stoddard

14 Jan 2024

More than 2,500 mining applications received in FY 2023/24, not one finalised. Department of Mineral Resources and Energy’s administrative capacity seems to have completely collapsed, and the consequences for investment in South Africa’s mining sector will be dire.

On 8 December, when South Africa was on the verge of its annual Christmas shutdown, Mineral Resources and Energy Minister Gwede Mantashe responded to questions from Christian Themba Msimang, an IFP member of Parliament.

“What (a) total number of applications for mining licences were received in each province for the 2023/24 financial year, (b) number of the applications were successful and (c) number of the successful applications for mining licences were awarded to women and persons living with disabilities?” Msimang asked.

Spoiler alert: No applications were awarded to women or disabled persons. This is not because they were excluded from consideration. It is because not a single application had been processed in the financial year up to that point, according to the minister’s response:

“1. 2,525 mining licence applications were received since the beginning of the 2023/24 financial year.

None of the applications mentioned in (a) above have been finalised.

Please see (b) above.”

Indeed, see (b) above. (You can read the question and reply on the website of the NGO, Parliamentary Monitoring Group).

Three-quarters of the way through the financial year, the department had received 2,525 applications for mining rights and permits, including presumably for exploration rights – “mining licence” is not the correct terminology – and the department was unable to finalise any of them. Not even one out of 2,525.

This shows the utter paralysis in the department and underscores the urgency of getting a functional mining cadastre up and running, a process that has also seemingly gone over a cliff.

It’s also revealing to note that Msimang had asked for a breakdown for each province, but the minister could not provide even that. Perhaps this was because the department could not be bothered, or because it is in such a muddled state that it doesn’t actually know.

The collapse of the administration of our mining regulatory regime seems to be happening behind a wall of deliberate obfuscation and denial.

Daily Maverick emailed a query to the department on 4 January asking for an explanation, but has yet to receive an answer.

The mounting dysfunction at the department was thrown into sharp relief in February 2021, when it revealed that the backlog for mining permits, mining rights and permit rights had reached an eye-watering 5,326. It has since reported progress.

But if, as at December 2023, none of the 2,525 applications received in the financial year had been finalised, the logjam is clearly growing again.

“What we know is that in February 2021 the department disclosed to Parliament that it had a backlog of 5,326 mining rights, prospecting rights and mining permit applications, renewals and cessions. Two-and-a-half years later we learned that the like-for-like backlog was 4,486. This suggested that the backlog would take 16 years to clear at the then processing rates,” Paul Miller, director of consultancy AmaranthCX, told Daily Maverick.

“We now learn that in the 10 months to December 2023, 2,525 ‘mining licences’ applications were received, with not even one being finalised in the period. Sixteen years now look ambitious.”

mining A dump truck transports excavated rock at the Mafube open-cast coal mine, operated by Exxaro Resources and Thungela Resources, in Mpumalanga on 9 September 2022. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

Critics – and the minister himself – have long decried the department’s useless Samrad system for processing mining rights applications. Now Samrad – and the department by extension – seem to have completely melted down. This has happened largely under the radar, given the department’s aversion to transparency.

“The collapse of Eskom, Transnet and many municipalities has happened in plain sight. The collapse of the administration of our mining regulatory regime seems to be happening behind a wall of deliberate obfuscation and denial,” Miller noted.

A functioning mining cadastre would shine the light of transparency on this shambolic state of affairs, but after years of promises and delays, the process is stuck in a rut of opacity.

A mining cadastre is an online map portal that displays a country’s mineral wealth in a way that is easily accessible to the public. It also shows the state of play of mining and exploration rights, as well as active mining operations in a country, and provides a platform for companies to apply for exploration, prospecting, mining and related rights.

Which company is going to apply for a prospecting permit in South Africa when the department has been overwhelmed by applications that it has shown it is incapable of processing?

Neighbouring Botswana and Namibia are among several African countries that have a mining cadastre.

Last year, the department finally seemed to get the ball rolling on that front. In August, it said that it had selected the preferred bidder to replace Samrad, and an announcement was expected in October. The process was being audited for final approval by the state IT agency, Sita.

Five months after the preferred bidder was selected and three months after the expected announcement, there is still nary a word on the matter from either the department or Sita.

Since November, Daily Maverick has tried on a number of occasions to get an update from Sita, but none has been forthcoming. It is a radio silence that speaks volumes.

President Cyril Ramaphosa told the African Mining Indaba in February last year that the government was in the process of procuring an “off-the-shelf cadastral system” – in other words, a proven one like Botswana’s. One wonders what he or the minister will tell the indaba this year.

This unfolding cadastre disaster and the swelling application backlog are major deterrents to investment in South Africa’s mining sector, especially for exploration. And without exploration, a country’s mining industry has no future.

South Africa’s share of global exploration budgets fell from more than 5% in 2004 to below 1% in 2022, according to S&P Global data. Yet Mantashe said in 2019 that South Africa would reach the 5% threshold again within “three to five years”.

But which company is going to apply for a prospecting permit in South Africa when the department has been overwhelmed by applications that it has shown it is incapable of processing?

Mining may be all about geology, ultimately, but geological timeframes don’t cut it in boardrooms. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R29.

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