Mining permits point to shady Mpumalanga scramble for coal

18 Jun 2023

A low-bar concession system intended for small business is being swamped by a rush of applications in Mpumalanga, raising suspicions.

Mpumalanga, where criminality surrounding the coal value chain is widely seen as rife, remains the main bottleneck for applications for mining permits in South Africa. These would be for open-pit operations that are no more than five hectares and require little in the way of environmental and social compliance. And that points to a shady scramble for coal.

“The only reason it could happen in Mpumalanga is because of coal and the officials are entertaining these applications when they shouldn’t be,” Paul Miller, director of the mining consultancy AmaranthCX, who has reviewed the data, told Daily Maverick.

The backlog for applications for various kinds of mining and prospecting rights and permits is more than 5,000 – 5,066 to be precise – according to data compiled by the Department of Mineral Resources and Energy (DMRE) and presented by Minerals Council SA CEO Roger Baxter at the Junior Indaba in Johannesburg recently.

The scale of the backlog was first revealed in February 2021, when the DMRE admitted in a parliamentary presentation that it was above 5,000. In November last year, the DMRE said the figure had been whittled down to 2,625.

Oh, but it forgot to include applications for mining permits, as one does. So the latest total is 5,066. This is a key obstacle to exploration and other kinds of mining investment and explains why South Africa, which accounted for more than 5% of global exploration expenditure in 2004, now attracts less than 1%.

The Samrad system that the DMRE uses for processing mining rights is widely acknowledged to be useless, even by Minerals and Energy Minister Gwede Mantashe.

Yet the DMRE has for years dragged out the procurement of a functioning mining cadastre, an online portal that allows the public to see the state of play of mining rights while providing companies with an efficient mechanism to apply for such rights.

It is now expected to announce the winning cadastre bid in July. Whichever company tackles the job will have a mess to sort out, especially in Mpumalanga, which has been overwhelmed with applications for mining permits.

The total backlog on this front is 2,185 and Mpumalanga accounts for 1,584 – raising suspicions that this stems from a corrupt coal rush. Mining permits are far less onerous to obtain than mining rights. They don’t require a social and labour plan or an extensive environmental impact assessment. Their design is meant to support small businesses, such as a brickworks or sand mine.

“Mpumalanga doesn’t need 1,500 sand mines and clay pits, which is what the mining permit is really meant for,” Miller noted.

‘You’ve taken the hole in the doughnut’

“Something that was meant for a small quarry in a small town or a sand pit has been completely bastardised to land-grab Mpumalanga. It’s a much lower bar, but it secures the ground, so no one else can come and mine around you. Effectively, you’ve taken the hole in the doughnut.

“So if you do hundreds of mining permit applications, you can secure tens of thousands of hectares of land for coal mining.”

Without an effective cadastre, it’s hard to know what is actually happening on the ground. But opacity and incompetence provide a perfect cover for corruption, and coal is almost certainly at the heart of it.

Miller said: “The mining permit is issued for five hectares, but they block off the whole farm. If you put a mining permit in the middle of it, Samrad blocks off the whole farm. Samrad is not sophisticated enough to distinguish between the mining permit area and the whole farm.

“It’s only an insider within the DMRE who would know that you can put a whole series of 5ha mines in there.

“A person can’t have more than one mining permit, but a family can and a whole group of associates can, so they can start applying for mining permits in close proximity to each other.”

In the absence of a cadastre, Miller has put together a mapping initiative using Google Earth and disclosures by public companies. It shows that most of the Mpumalanga highveld has been carved up for coal mining.

“North of Ermelo there’s a mining pit every couple of hundred metres. This defeats the purpose of having an isolated quarry [with limited] environmental impact,” Miller said.

The expansion of coal in Mpumalanga, where illegal mining is prolific, is also seen as a threat to food security as it gobbles up prime maize fields.

Huge swathes of land located near grid infrastructure that could be used for renewable energy projects are being locked out by coal permits.

If there are almost 1,600 permits outstanding, how many have been issued? The hope is that a functional mining cadastre will shine the light of transparency on this and other issues. And that may make some officials squirm. DM

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

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‘You’ve taken the hole in the doughnut’