Gwede Mantashe is still at the helm of SA’s mining sector. What could possibly go wrong?

There is no GNU dawn in the mining sector with Gwede Mantashe still in charge of government policy and administration of the industry. 

The Department of Mineral Resources and Energy, now reconfigured as the the Department of Mineral and Petroleum Resources, under Mantashe’s watch crumbled into a shambles of maladministration and incompetence, with huge costs inflicted on the mining industry and the South African economy more widely. 

Markets may be cautiously welcoming the Government of National Unity (GNU), but President Cyril Ramaphosa has sent a worrying signal to investors in a critical part of the economy by keeping Mantashe in place as minister of the now Department of Mineral and Petroleum Resources (previously the Department of Mineral Resources and Energy).

The ANC has said that it is committed under the GNU to rooting out cadre deployment and creating a professional public service committed to delivery. The Department of Mineral and Petroleum Resources would benefit from such an initiative, but not under Mantashe who has clearly been redeployed as a cadre. 

The “professionalism” of Mantashe’s staff was thrown into sharp relief in April 2019 when the minister punted the fake mineral “hazenile” to investors at a mining conference in Australia. 

Read more in Daily Maverick: Mantashe promotes fake ‘April Fools’ mineral to investors at global mining conference – BusinessTech  

Hazenile made its debut on the Smart Energy International website on 1 April 2019 as an April Fools’ joke. 

After the “story” was published about this startling discovery by the Cape Town-based “Institute of Energy Research” – a game-changer that would allow batteries to be produced at a 10th of the current price, nogal – Smart Energy pointedly added this remark in red near the top of the story:

“This was an APRIL FOOL’s joke. We hope you had a laugh along with us…” 

Read more here: Miracle new mineral to revolutionise battery storage | Smart Energy International 

But Mantashe and his staff fell for the joke, hook, line and sinker. I mean, if you allow your boss to make a complete ass of himself in public, chances are you’re a cadre who wouldn’t last two hours in the private sector. 

It was all downhill from there, with the one notable exception being Mantashe’s efforts to reboot mining operations during the Covid lockdowns of 2020. 

The joke has been on the mining sector – but with consequences that are no laughing matter. 

Mantashe also stated in 2019 that South Africa would account for at least 5% of the mining sector’s global exploration budget “within the next three to five years” – a position it last held in 2004. 

That target was missed by a country mile. 

In 2022, the last year for which I could find data, South Africa only accounted for 0.8% of such expenditure globally, according to S&P Global. 

This is largely because of the bottlenecks for mining and prospecting rights and related applications that have been snagged by the useless Samrad system for processing such matters; a situation worsened by rank incompetence in provincial offices amid suspicions of corruption.  

The mounting dysfunction at the department became shockingly evident in February 2021, when it revealed that the backlog for mining permits, mining rights and permit rights had reached an eye-watering 5,326.

Daily Maverick reported in January that of the over 2,500 mining applications submitted for the 2023/24 financial year, none had been finalised as of December, by Mantashe’s own admission in response to parliamentary questions. 

Read more in Daily Maverick: EXCLUSIVE — Mantashe reigns as the minister of no new mining as DMRE lacks admin capacity 

For several subsequent days, officials changed their story – nothing suspicious about that! – culminating in Mantashe flatly contradicting what he told Parliament. 

Read more in Daily Maverick: DMRE muddle: Mantashe says cadastre announcement imminent, changes tune on applications mess 

All of this gave rise to the perception that no one at the department really knew what the hell was going on. 

The Minerals Council South Africa estimated a couple of years ago that the mess surrounding applications had cost the mining industry around R30-billion in lost investment. Without exploration, the mining sector simply has no long-term future. 

The bulk of the bottleneck lies with the Mpumalanga office, where there has been a deluge of applications for coal mining permits, which are far less onerous to obtain than mining rights and only cover up to 5ha. Many of these applications should not even be entertained, which raises the question of why they are accepted for processing in the first place. 

Read more in Daily Maverick: Mpumalanga has become a coveted coal black hole for SA mining applications 

It all underscores the crying need for a functional mining cadastre. 

This is an online portal that displays a country’s mineral and other forms of natural wealth in a way that is accessible to the public. It can serve the dual function of showing the state of play of mining activities while allowing companies armed with this knowledge to apply for various kinds of exploration or mining rights.

Read more in Daily Maverick: Explainer: A mining cadastre and public transparency 

A cadastre is now on its way, it seems, but only after years of needless delays under Mantashe. And it will likely take another year to set up. 

A fresh pair of hands is needed to stem the rot, which has Mantashe’s fingerprints all over it. But the department responsible for mining remains firmly in his hands, so expect the ball to keep dropping. DM