Loaded for Bear: DMRE’s tardy excuses for applications shambles underscore its dysfunction

Mine workers operate drilling machinery underground at the Gold Fields South Deep gold mine in Westonaria. (Photo: Michele Spatari / Bloomberg via Getty Images)

By Ed Stoddard

17 Jan 2024

The Department of Mineral Resources and Energy is not very good at encouraging mining companies to dig holes in the ground. But it’s good at digging a hole for itself.

After almost two weeks, the Department of Mineral Resources and Energy (DMRE) finally responded to Daily Maverick’s queries on Wednesday about why it had failed to finalise any of the more than 2,500 mining rights applications of various stripes which it had received up until December in this financial year.

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

Coming four days after the story was first published in our weekend DM168 newspaper, and three days after it went online – not to mention the fortnight since queries were first sent – the tardiness alone speaks to the DMRE’s growing dysfunction.

To wit, the DMRE statement – issued to all media – says: “... once an application for prospecting or mining right, permit or license has been accepted by the relevant regional manager, the applicant has to commence with the required environmental authorisation application.

“Although the legislation stipulates the timeframes within which these activities must be undertaken, in many instances, applicants generally request and would be granted extensions, depending on the nature of specialist environmental studies that may still need to be undertaken in that specific location.”

This is a rehash of what Deputy Director-General Tseliso Maqubela told 702 earlier this week. However, there are a couple of points to be made on this score.

loaded for bear Coal at the Mafube open-cast mine, operated by Exxaro Resources. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

First – based on my conversations with a couple of mining executives – most proper mining companies would do their homework in advance. They know what it takes to do an environmental impact assessment (EIA) and things like that, and the timelines that need to be met.

“Why would you go in half-arsed?” was the comment of one mining executive I spoke to.

But in fairness to the DMRE, some experts say it has challenges in the application process that are beyond its control.

Hulme Scholes, a director at Malan Scholes Attorneys, told Daily Maverick that environmental assessments are, as the DMRE says, time-consuming. This is especially the case if there are challenges with the community in the consultation process – as often happens on communal land in the former homelands – or if shoddy consultants have been hired to do the work.

“The DMRE has a point, but they don’t admit their failings, and they still take too long,” he told Daily Maverick.

“The environmental authorisation process that you have to follow to get a mining right is quite onerous,” he said. That is, for a proper commercial mine – such a right takes about 300 days to finalise.

“That assumes the mining company has their ducks in a row. So, if you get an application from Sibanye-Stillwater or Anglo American, they use the best consultants, they have very good in-house people, they get it done.”

The environmental authorisation for a prospecting right takes roughly 200 days and the same goes for a mining permit, which is only up to five hectares. These are less onerous.

All of this should also be done in parallel, so a legitimate company will not apply for, say, a mining permit and then, well into the process, launch the environmental authorisation.

This, as I have pointed out before, raises the question of why shoddy, unprepared operators would assume they stand a chance of getting a mining permit.

Daily Maverick reported last year that there was a suspicious flood of such applications for mining permits pertaining to coal in Mpumalanga, and the DMRE has acknowledged that this has contributed to the snarl-ups.

“A fair analysis of the mining application process would have included inputs from applicants, particularly the amount of time they spend on environmental authorisation and consultations,” the DMRE’s statement said.

Well, the fly-by-nights are hard to track down. Some were perhaps registered as a hair salon in a small Mpumalanga town before they were transformed miraculously into a mining company.

Ultimately, none of this is an excuse for not finalising a single application nine months into the financial year, not least because not all applications require environmental authorisation.

For example, Section 11 applications to transfer mining rights don’t require them, nor do (in some cases) Section 102 applications to amend working programmes.

Presumably, the more than 2,500 applications received as of December in this financial year included some of those, but if not, the DMRE should say so. Perhaps it has approved some along those lines and simply forgot to mention them?

If so, this further underlines the dysfunction at the DMRE, notably when it comes to transparency and communication.

“In line with its role in enabling the country’s economic development, the DMRE has finalised 2,041 applications in the current financial year,” the department said in its statement on Wednesday – omitting the point made by DDG Maqubela on 702 earlier this week that those were all from the previous financial year.

None of this is rocket science.

loaded for bear Mine workers operate drilling machinery underground at the Gold Fields South Deep mine in Westonaria. (Photo: Michele Spatari / Bloomberg via Getty Images)

Has no one at the DMRE thought of providing regularly scheduled updates, in a standard format, of the status of applications, with a precise breakdown of what they are for, and the size of the backlogs?

Of course, the lens of transparency would be shone on this muddled state of affairs if a proper mining cadastre was in place rather than the useless Samrad system, which the DMRE has used for the submission and processing of applications for the past 13 years.

That process also remains mired in opacity – still no word on the preferred bidder that was selected in August of last year – after years of delays.

See here for an explainer of what a cadastre is.

“They have failed to fix the Samrad system as they have been promising. There is no excuse for this,” Scholes said.

“The deeds office system in this country works. They process hundreds of thousands of property transactions a year. You can go onto it and see how many houses someone owns and what they paid for it.

“If there is a system in this country that can do that, there is no excuse for the DMRE not to have a similar system that the public can access and to process prospecting rights and mining rights.

“And the reason for it, I believe, is that it is intentionally manipulated. I have seen this in the bringing of appeals and the backdating of appeals.

“Say you want to commit fraud. You work in the DMRE and your friend has a small mining company, and Sibanye applies for a mining right. I make the system inoperable, I get that mining right, and Samrad doesn’t pick it up. It needs to be manually submitted… I phone my friend and say, ‘put in an application’, which I then backdate.”

The bottom line is that the DMRE’s excuses are starting to wear thin. The dog can only eat your homework so many times. DM

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