DMRE on Risks, Threats and Challenges in Mining and Energy Sectors; with Minister and Deputy Minister

Meeting report

The Chairperson welcomed Committee Members to the meeting and acknowledged the presence of the Minister. He indicated that the meeting was for key issues that are central for the growth of the economy that are also making serious impact in terms of the socio-economic being of the people of South Africa.

The Chairperson stated that he had seen the reports that are part of the presentation that focus on issues identified by the Department as requiring some interventions or tightening-up going forward.

Mr K Mileham (DA) apologised to the Chairperson for interrupting him and stated that he wanted to address a housekeeping matter.

He indicated that Committee Members had received presentations the previous night at 08:30 PM via WhatsApp. Mr Mileham said he did not have any objections to receiving the presentations via WhatsApp but that there should be some back up process of sending via email because it is extremely difficult to read presentations on the phone. He also said that receiving the presentation at 08:30 PM for a 09:00 AM meeting the next morning is highly unacceptable. He reminded the Department that the Committee has said in the past that presentations should be received 24 hours in advance.

Mr Mileham highlighted that the Committee normally receives a briefing document from the Committee researcher and Members have not been receiving these documents for a long time. He emphasised that it was something that the Committee needed to address.

The Chairperson agreed that there must be a background document on the key issues that acts as context for the presentation. He noted that Committee Members have not received the document for quite some time. He emphasised that it is difficult to try and engage with a presentation that is received less than 24 hours before the meeting and it was something that needed to be addressed.

The Chairperson indicated that in some instances, it is difficult but the Department needed to take note of the fact that there must be some background document on some of the issues presented. He agreed with the Members that the presentations must be received within 24 hours before the Committee meeting and that those issues needed to be attended to.

He stated that these were not matters subject to debate as they relate to the procedure that should be followed.

Minister of Mineral Resources and Energy, Mr Gwede Mantashe, thanked the Chairperson for the opportunity and agreed with Members that information must be distributed in time. He indicated that in some institutions, entities are forced to submit information seven days before the meeting so that Members attend the meetings highly prepared. He apologised to the Committee on behalf of the Department.

The Minister pointed out that there are a number of concerns that are raised and they reflect a Department that has its hands on deck and its sleeves rolled up. He indicated that the Department was a working Department and it was something that was worth noticing. He said everybody notices because the Department is putting in the work.

The Minister handed over to the Director-General to lead the presentation.

Department of Mineral Resources and Energy: Risks, Threats and Challenges in the Mining and Energy Sector
The presentation by the Department was led by Mr Lucas Malaudzi, Head of Strategy, Department of Mineral Resources and Energy (DMRE). The Department presented on risks, threats and challenges in the mining and energy sectors.

Mr Malaudzi presented that the mining sector is experiencing a lack of investment and has been facing a number of sector-specific issues related to regulation, geopolitical risk and legal limits on natural resource use. Illegal mining was identified as depriving the country of the much needed contribution to development. It was presented that the Department is collaborating with SAPS and other law enforcement agencies to curb illegal mining in the country.

It was presented that the Department has been involved in rehabilitating old and ownerless mines and to date, 29 asbestos mines have been rehabilitated and 320 dangerous shafts have been sealed.

The Department is developing the Integrated Resource Plan, the Gas Master Plan, the Integrated Energy Plan and the Liquid Fuels Master Plan.

See attached presentation for further details

NERSA: Regulation of ROMPCO Pipeline
Ms Nomfundo Maseti, NERSA Member, led the presentation on behalf of the National Energy Regulator of South Africa (NERSA). The presentation was focused on the regulation of the ROMPCO pipeline.

The following were identified as key enablers of the SASOL Mozambique natural gas project; infrastructure capital investment, political will from the South African and Mozambique governments and a robust agreement or cooperation framework.

It was presented that the gas volumes supplied to the South African market has increased overtime. Some of the challenges of regulating cross border pipelines include the multiple tariff system that is employed in Mozambique which is inefficient and inconsistent. To address that, NERSA intends to amend the existing Licence Conditions to align all the regulatory requirements with the provisions of the Gas Act. Other challenges identified include jurisdictional issues, information asymmetry and regulatory and policy gaps.

It was also presented that the political instability currently on-going in Mozambique causes a threat to future gas supply.

See attached presentation for further details

iGas: Mozambique SA Gas Pipeline (ROMPCO)
Ms Sesakho Magadla, iGas, Senior Project Manager, presented on behalf of iGas. The presentation was focused on ROMPCO. It was presented that ROMPCO has three shareholders, namely Sasol Gas Holding Pty. Ltd, iGas and Companhia Mocambiacana De Gasoduto who hold 50%, 25%, 25%, respectively.

In terms of overall performance, the financial level of performance was good for the financial year 2020/21 dividends estimated to be at R990 million. Occupational health and safety was reported to be good with just one major incident in the last 15 years.

It was presented that the pipeline is approximately 1500km away from the insurgent hotspot and ROMPCO takes comfort from the SADC troops that are re-enforcing the Mozambique troops. There were no damages to the pipeline from the South African side.

See attached presentation for further details

PetroSA Strategy and Corporate Turnaround Plan
The presentation was led by Mr Naidoo Pragasen, PetroSA CEO, who said that there has been limited, inefficient and ineffective exploration and production activity resulting in minimal discovery and production. There were market-related challenges caused by climate change, technology, price volatility and COVID-19 and they resulted in unsustainable financial and operating conditions for PetroSA.

In the 2020 financial year, PetroSA’s liability of R15.578 billion exceeded its assets of R9.046 billion. At company level, cash in bank has been eroded from R2.2 billion to R1.3 billion.

It was presented that there are a number of interventions to stop liquidation, reduce costs and transition to break-even and achieve sustained profitability. These were grouped into short term, medium term and long term strategies.

See attached presentation for further details

Sustainability of the NECSA Group
Mr David Nicholls,NECSA Group: Board Chairperson, presented on the sustainability of the NECSA Group. It was presented that NECSA has been profitable in the past but the financial picture is unsustainable and triggered the need to perform a review of the organisation. The forecast for the 2021 financial year shows a nett operating deficit of R222 530.

It was presented that the organisational culture is not geared towards high performance and there is need for human capital excellence with a high performance culture.

The Minister emphasised that the Department has invested time and energy in normalising governance in all entities. He indicated that in his view, there are some positive results from the investment.

Minister Mantashe stated that the Department has developed a dynamic mandate but the structure has remained static and there are constant calls to the Director-General to structure the Department in such a way that it is responsive to the dynamic mandate. He noted that every time dynamic issues confront the Department, these issues find the Department flatfooted. He assured the Committee that the Department was working on the issues and they are currently work in progress.

Discussion
The Chairperson stated that he did not want to pre-empt the issues and was going to allow Members to raise questions and clarities. He said he was not sure if there had been a misunderstanding on the brief with regards to what was expected. The Chairperson indicated that he was going to address that at a later stage.

Mr J Lorimer (DA) indicated that as far as mining goes, the presentation was a disappointment as there are a number of points of critical interest to the mining industry and threats that were not identified. He said it is not just the lack of investment by Transnet, Postnet and Eskom but it is also a failure of authorities to protect railway lines from criminality. He reminded the Committee that mines had recently indicated that the country could have sold a lot of iron and coal over the last year but the trains keep failing because of a couple of copper wires being stolen and also derailments.

He said the infrastructure in South Africa used to be at an advantage when making an investment case but that advantage is disappearing and the presentation had put it nicely in the introductory slides in terms of licensing. Mr Lorimer highlighted that the presentation stated that in terms of policy mandates an optimal framework is required. He reminded the Committee that the Department had presented in the previous week that maybe there is another two years with a working cadastral system and if the Department is lucky, some might not be marked red too. As a result, another two years of a licensing system that does not work becomes a major threat to the possibility of new mines. He said it was put very carefully in the presentation that departmental staff need to be above reproach and another way of putting it is to say that there needs to be a clear-out of crooks from provincial offices, because they are many.

Mr Lorimer said other mineral rights applicants do not complain because they have no confidence that their issues will be addressed and that their applications will not be prejudiced. He indicated that the Department had missed out the burden that is put on miners and potential miners by the Transformation BEE and Localisation and the Social Labour Plan. He said it was important to hear that mainly because the Committee hears of material conditions in mines and other places which is not how potential investors think. Potential investors tend to go somewhere where the government does not depend on them to solve all their social problems and that is why the country is not getting the investment it should. He emphasised that the situation was getting worse and optimism sounded very nice but the truth did not.

Mr Lorimer stated that part of the presentation which stated that policy certainty has been achieved was factually incorrect. He said maybe the Department has forgotten about the continuing court action about the Mining Charter, the looming threat of expropriation without compensation, the cumbersome nature of the Department in awarding mineral licenses, the application process, the time it takes to approve mineral licensing and the granting of the mining rights. He emphasised that he did not think that anyone would believe that the Department had fixed that. He stated that the threats of riots caused by the Department’s proposed artisanal and small mining policy also attest to the problem. He emphasised that just because the Department wanted for there to be policy certainty did not mean that there was certainty.

Mr Lorimer highlighted that the problem is some miners tell the Department what the officials want to hear and not the reality because the miners are worried that if they say the wrong things, their license applications will be prejudiced. He asked the following question: if there is really policy certainty why is there no inward rush for investment in the mining industry right now given how high minerals currently are?

He stated that the Task Team on Illicit Mining has been operating for years and there has been no effort to introduce legislation to make illegal mining a crime. He asked the following questions, are there any notable successes with the task team? Is the Department still considering the option of changing legislation to make illegal mining a crime, if so, why and if not, why not? What is the Department’s current estimation of the value of illegally mined minerals in South Africa?

Ms P Madokwe (EFF) indicated that under normal circumstances, she would have welcomed some of the reports but the reports were sent late and that was worrying. She said in as much as the issue had been addressed, it was very important to reiterate the matter because as the Committee was going through the slides during the presentation, there were some aspects that required more information which the Committee did not address due to lack of research time. She requested that the Committee ensures that the situation does not happen that as it is not the first time that the issue has been raised in the Portfolio Committee.

She referred to the part of the presentation that focused on the challenges of the mining sector especially aging infrastructure that needs to be reworked and asked the following questions: Who is responsible for the maintenance of infrastructure in mines? How did the sector get to the level that its infrastructure is aging and it needs to be reworked? What are the health and safety risks associated with mine workers in particular, working with aging infrastructure? Who is actually incurring the cost of maintaining or reworking or replacing that infrastructure?

Ms Madokwe noted that the Committee understood that as it stands, the sector is sitting on a problem of delayed dispensation of mining licenses. She wanted to know what the correlation is between that delay and illegal mining that is happening in the country.

She recalled that last year there had been a presentation by the Department where an issue was raised about a child in Ekurhuleni who had died in an old mine. She recalled that there were issues with the family not being able to perform the necessary rituals to make sure that the child transcends traditionally. She also had read recently that the issue had not been resolved despite the commitment from the Department to follow up. Ms Madokwe asked the following questions: What is the progress on that? Why is it taking long to be resolved? What are the challenges because last year it was presented that the challenges are with the municipality and it has been a long time since then so, what is happening with that issue?

She said on rehabilitation and closure of mines, there were budgets and money that should be incurred and she wanted to understand why taxpayers are responsible for incurring those costs and not the people who owned the mines and were benefiting from the proceeds of the mines. She asked what measures are being taken by the Department to ensure that with the mines that are operational right now there will not be a similar meeting five years, 10 years or 20 years from now discussing the issue of taxpayers incurring the cost of rehabilitating all closing mines. She asked what measures were being put in place right now to make sure that the existing mines are actually rehabilitated as they produce or as they extract?

Ms Madokwe noted that there was information under rehabilitation of mines on the environmental impact of mining and air quality which she felt was supposed to be provided for under the main challenges of mining. She observed that the challenges presented by the Department were mining based and there was not much focus on mining workers. She noted that there was no mention in the presentation of the challenges that workers are facing such as human rights and labour relations violations which to a certain extent pointed to the Department’s failure to protect mine workers. She indicated that mine workers were sending reports and requests for intervention to the Department but none of that was actually happening.

She highlighted that on the Risk Mitigation IPP Procurement Programme (RMIPPPP), the understanding was that the karpowerships  failed their EIAs and were not granted environmental authority by the Department of Fisheries and Environmental Affairs. She indicated that there was no mention of that in the presentation. She said the presentation mentioned bidders but failed to highlight that the programme failed and was not granted environmental authority. She wanted to know what the implications were to the bigger programme of the RMIPPPP.

Ms Madokwe stated that the Committee had been told that there are local content limitations. The Committee was also aware of the fact that energy generation in South Africa was a long term project which will be spoken of even in the next 50 years. The Committee was also aware of the fact that at this point, there should be creation of local industries and capacitation of local producers to ensure that most of the things needed for the energy project are locally produced. She wanted to know what the Department was currently doing to capacitate local producers so that most of the machinery and technologies needed for the long term are locally sourced. She was also interested in knowing the specific industries that the Department is looking to establish and when those industries will be established.

She indicated that the energy project would also help address to employment in South Africa. She emphasised that the unemployment rate is ridiculous and the Department should be taking advantage of these new ventures to try and create as many jobs and industries as possible.

Ms Madokwe said she understood that a transition from coal and fossil fuel generation could not be done abruptly in South Africa. However, it was time to also acknowledge that there is huge opposition and limited investment in energy generation projects from coal and fossil fuels. Her question was, why is the Department still developing plans around coal and fossil fuel energy generation if there is not a backlog or rejection at the level of civil society, environmentalists but also investors who are not coming to the fore as investment is going to green energy generation?

Mr Mileham thanked the Chairperson and indicated that he was going to make some comments broadly and then do gown to specifics. He noted that what the Committee had heard was a lot of what the Department wanted to say with very little detail and specifics on delivery. The Committee had heard talks about restructuring in the Department and its various entities for better governance.

He emphasised that it appeared as if the Department was spending more time on restructuring and talking about restructuring rather than doing its job of delivering the goods and services to the people of South Africa. He asked for some input from the Minister on how he was going to change that culture in the Department. He emphasised that the Department needed to stop talking about restructuring and start doing more about getting work done.

Mr Mileham noted that there was a slide that was presented on the Integrated Energy Plan (IEP) which has been his concern for quite some time. The presentation stated that section 6 had not been enacted which was correct and he wanted to ask why it had not been enacted.

He indicated that the National Energy Act was promulgated in 2008 and some of its sections were given commencement dates the latest being 2012. The only section that has not been enacted is section 6 and it appears to him that it is a get out of jail free card for the Ministers of Energy over the years to avoid having to deliver an IEP. He emphasised the point that Parliament requires in legislation that the Minister delivers an integrated energy plan to provide a roadmap for the entire energy sector of South Africa. However, the reality is that a number of Ministers over the years have not delivered on that obligation.

He recalled from the presentation that the Department adopted a bottom-up approach to developing the IEP in that the Department wants to get the IRO, the gas masterplan and the liquid fuel masterplan among others in place before the IEP. He referred the Committee to legislation, specifically sections 3 (4) and 3 (5) of the National Energy Act which require that the Minister develops an analysis and publishes it on an annual basis. He wanted to find out from the Minister whether or not that had been done, if so when and if not why.

Mr Mileham highlighted that in the IEP of 2019, it was anticipated that there would be 750 megawatts of new coal generation online by 2024 and another 750 megawatts by 2027 yet the presentation had identified that there is no desire for new coal. He emphasised that the two new coal IPPs that were under development have failed because they have not met the financial clause, they have been largely abandoned and there is no real desire even in Eskom to develop further coal generation. He raised the following questions: Is the Minister going to review the IEP or not? Is the Minister going to look at it and say the Department cannot deliver on that 1 500 megawatts of coal as anticipated in 2019? What is the Department going to do to replace it?

He noted that there is one other risk or concern that has not been identified or brought into the Department’s planning and it relates to climate change. The President of the Climate Commission has heard from various entities including Eskom that there is need to incorporate climate change in the country’s model. He raised concerns with the fact that climate change had not been identified as a risk, challenge, concern or something that the Department is even taking seriously. His question was what is the Department doing about it?

He said the Committee had heard a lot about restructuring in ROMPCO and he guess that CMG purchasing shareholding from Sasol was purchasing 15% total of the company. He raised the following question, what is iGas paying for the purchase of that 15% from Sasol and is that market-related?

Mr Mileham said he was a bit concerned about the fact that it has been nearly a year since the Committee met with PetroSA in Mossel Bay yet there is still talk about the disposal of non-core assets which is still pending approval. He asked these questions, why are they pending approval? Why are those assets not being sold? What is holding them up? Who is the roadblock in this issue?

He stated that there have been a lot of presentations over the last year on the new National Petroleum Company and he wanted some feedback as to where the Department is in that process and on what is holding up the work.

He highlighted that he heard a lot of concerns from various PetroSA staff members in respect of salary and job insecurities. The staff members indicated that they did not know whether or not they were going to be paid at the end of the month and that has been going on over the course of the last year or so. He wanted to find out what the current situation was in respect of the PetroSA staff. He recalled that there was mention of the section 189 processes and said there was need for some clarity as to how many staff members have been affected by short payments or non-payments of salaries and what is being done to rectify that. He raised the following question, when does PetroSA anticipate a return to profitability?

Mr Mileham stated that in one of the slides, it was presented that organisational culture in NECSA is not geared towards high performance. He indicated that the entity is operating in a highly specialised, highly technical and highly professional industry yet it is not geared towards high performance which raises enormous red flags about safety and reliability of information about the financial performance of NECSA. He raised these questions: What is being done to address that particular issue? How is the entity turning around that high performance culture or lack of a high performance culture?

He said SAFARI-1 is past the age of its original lifespan and has been identified for replacement. He asked the following, what is the progress on replacement of SAFARI-1? What is the timeline that is being anticipated and how will it be funded?

Mr S Kula (ANC) said the Committee needs to lay to rest the issue of the state of reports on mines and that issue cannot be contested. He reiterated that he shared the same sentiments on the state of reports on mines although he is convinced that there is policy certainty in the country.

He reminded the Committee Members that there were contestations in the past around how the future of mining and energy in the country should be structured. The contests have ended and it is because the Department has made major strides in ensuring that there is policy certainty by introducing policies such as the gas master plan. He reiterated that there is policy certainty and that he supported the remarks from the Department in that regard.

He noted the report on the challenges in the mining sector speaks to the role that stable municipalities play in support of mining. He indicated that the point could not be overemphasised but that he had concerns with the state of the municipalities in the country especially those in mining areas. He referred to the Auditor General’s report that attested to the fact the municipalities are in bad shape.

Mr Kula asked what programmes the Department has in place to make sure that Municipalities are permanently engaged to ensure that they consistently support mines and local communities.
He said illegal mining continues to be a problem not only to the Portfolio Committee but to the country as a whole. The report by the Department had indicated that there is a lot of work that is being done in collaboration with SAPS, law enforcement agencies and other stakeholders. He asked if the Committee could be taken through all the loads of work that has been done in respect of illegal mining in the country.

He highlighted that in some townships, there are experiences of the spill of illegal mining activities. He wanted to know what activities have been registered in that regard through collaboration with SAPS and other agencies especially in the Klerksdorp area and other parts of the country to make sure that their challenges of illegal mining are mitigated.

Mr Kula indicated that the Committee cannot act as if the Department is just sitting idle and not doing anything about some of the problems that have been identified in the past and those that continue to be identified. He said it was important for the Committee to welcome the setting up of the Task Force on Illicit Mining and agree that it is a step in the right direction by the Department.

He noted that the report also speaks to the fact that some interventions require financial and human resources which are difficult to obtain in the current economic climate given how organised the crime syndicate is. He said the financial and human resources that are difficult to obtain are important as they aid the Department’s intervention efforts. He asked the following questions, what is the Department’s plan to offset these difficulties to obtain human and financial resources? What are some of the Department’s plans to offset these difficulties?

He agreed with the presentation that genuine grievances of excluded communities will have to be addressed as part of the Department’s plan moving forward. He said while there are so many opportunists within these mining communities who have ulterior motives, many of the communities are genuine in many mining areas. He asked the Department to explain how it intends to deal with this problem. He emphasised that it was unacceptable that 27 years into democracy, there are still complains about some communities being excluded from mining. He said the Committee should be able to know what the Department is doing to make sure that the bulk of the people of South Africa are able to participate in the mining sector.

Mr Kula said the Committee should welcome the establishment of a stakeholder and community directorate. He said the directorate is something that the sector needs and such programmes that bring people together must continue so that nobody is left behind.

He stated that the Committee supports the consideration of establishing a community engagement office in each regional office. He said the Department must move with great speed to establish these offices as such an initiative will be able to alleviate many of the challenges being faced by the communities. If communities have concerns, they could go to those offices and have the concerns attended to immediately. He emphasised that it is a great step in the right direction which must be implemented as soon as possible.

He indicated that there is still a lot of work to be done by PetroSA to ensure that the entity gets on track. He pledged that the Committee will support all efforts to ensure that PetroSA finds its footing and is able to make meaningful impact as an entity of the Department.

He said in future, the Committee needs to have a meeting with PetroSA alone so that the entity takes Members through the progress done since the last oversight visit in Mossel Bay. After the meeting, the Committee should be able to identify issues where there has not been progress and also be able to appreciate work done where there has been progress.

The Chairperson invited the Minister to respond to the questions raised and indicated that he was going to make the last statement on what might have been an error of understanding the actual brief and also on how certain things should be attended to.

He stated that he had to open the platform so that it does not sound like there are certain things the Committee does not want to be shared.

Responses
The Minister stated that he was going to respond to a number of issues and then invite the team from the Department and its entities to close on technical gaps. He noted that some Members seemed disappointed with the state of reports on mining and raised a number of issues on infrastructure, liability and licensing. He said in politics, people learn to disagree even when they are saying the same thing and tend to use the prefix ‘we disagree’.

He highlighted that the issue of licensing is a priority area for the Department and is currently being dealt with. Some Members had made projections that the Department would be dealing with the issue in the next 5 years to get it right. He assured the Committee that the Department was working on the issue to get it right as soon as possible.

Minister Mantashe indicated that there are a number of regional offices that have gone down the route of cleaning crooks out of regional offices and the backlogs have been reduced dramatically in a lot of offices. He disagreed, however, with some of the Members who stated that the Transformational BBE is a threat.

He indicated that the issue of the Transformational BBE is an ideological position of the Democratic Alliance (DA) and the Department could not offer any help. He said the DA ignores the fact that the opening of a mining school in Pretoria University was a protest and affirmation of transformation for Afrikaners. Now, when Afrikaners believe that the Department should not do it when it works for them, it ceases being an ideological issue but some level of dishonesty. The mining school which competes with Wits University was an intervention to open up space for Afrikaners to progress because they felt discriminated in the Wits University. That is why the Afrikaners currently in the mining industries are beneficiaries after 1994.

He said what some Members say that the Transformation and BEE are a threat to investment is not true. He referred to a speech by President Xi Jinping about common prosperity in China. The concept is about closing the gap between the rich and the poor in China and the policy is not seen as a threat because the Communist party dictates policy. He said on the other hand, in South Africa, transformation is a threat for the DA.

The Minister said illegal mining is not a mining activity but is a criminal activity and for that reason, the Department is engaged in a debate with the Minister of Police to form a specialised unit to deal with illegal mining. When one works with the police, it has to be at the pace of the police and that had to be taken into account since the Department has no police force.

He indicated that the question on whether or not tax payers should incur rehabilitation costs is an academic debate. Miners make payments to the rehabilitation fund and where there is a shortfall, tax payers must fill up. To the society, the issue is rehabilitation and not who pays for it because society does not know about it. However, the Department knows about it and those areas must be rehabilitated. He stated that the team from the Department was going to give the Committee the exact numbers of areas that have been rehabilitated and those that have been sealed.

He highlighted that the Department cannot deal with industrial relations issues. There is system in the country in which people that are unhappy with industrial relations approach CCMA, the Labour Court and the Labour Appeal Court. He reiterated that it is not within the mandate of the Department to deal with labour issues. He stated that the issue of expecting the Department to deal with labour issues is either an act of blackmail or a lack of understanding as there is a fully fledged and funded structure to deal with labour issues in the government.

Minister Mantashe said the Department has not appealed against the Department of Environment Affairs, but businesses did appeal. It is the responsibility of the Department to give the appeal process a chance to unfold because it is about the emergency procurement of energy. He said it is not a normal procurement of energy and that if Eskom does not want energy from power shifts but takes energy from other fossil fuels, then the Department will have to interrogate that issue. But for now, the Department needs to allow the court to deal with the issue.

He accepted the point that had been made by Members that local industries should be empowered but stated that the Committee needed to accept that there is no Department in government that will manufacture entrepreneurs. The Department can only support entrepreneurs that want to do business. He recalled going to a certain area where he asked the people there if they were selling anything and discovered that 90% of them were not selling anything yet they were expecting companies to give them business opportunities. He emphasised that small businesses are supported by the government through the SME Department which is specifically mandated to help entrepreneurs who need the space to accelerate their goal.

The Minister said he did not know if the view that the Department has to create jobs is socialist although he doubted that from his reading of Marxism. He stated that there is a general view that the state must create jobs or an environment for people to flourish and he did not agree with that. He indicated that had there been time, he was going to give the Committee a lecture on the opening up of China from 1978 in which the government changed the mind-set and how that accelerated development.

He stated that South Africa is a strange country that is so keen on committing economic suicide and there is not any other country that is like that. He said China is building 15 coal power stations and a few other countries in Europe are beginning to resuscitate coal power stations because of the realities of development. On the other hand, South Africa is not focusing on development, the country is allergic to coal and fossil fuels without considering the developmental needs and concept of transition.

He indicated that trying to make the Committee understand that transition is not an event but a journey is a daylong lecture. He said Eskom gets excited about closing power stations and talk about one day closing Komati and opening renewable energy. However, the country ends up taking far fewer energy with renewable energy that what KOMAT is producing today. The Minister said he asked the following questions: What is the excitement about? Is it that you will have renewable instead of coal, destroying the lives of people? He stated that there are coal turbines with gas turbines that is why there is a pipeline from Mozambique to Sasol. The Department can then use the gas turbines to power the coal fields in Mpumalanga.

The Minister said his view is that the Committee should be having discussions that speak to the country’s environmental needs and not restrict the conversation to killing coal for renewables. He indicated that Eskom was shocked when he reminded them that renewables give the country about 8.3% of energy but costs Eskom 25% of primary fuel which is a mismatch.

He said some Members are missing the articulation that restructuring and on-going change is a certainty. The Department does not table restructuring and then stop implementing it. Structures have to be reviewed continuously in relation to strategy and it is an on-going process. He recalled that Members had said the Department spends time talking about restructuring but not knowing what to do, and stated that not talking about what the Department wants to achieve and restricting the conversation to what is being done is a total distortion of the management theory. He said that is not how entities are managed and advised Members to stay in politics as they would run the risk of running entities in a manner that may collapse them.

Minister Mantashe said on-going thinking in entities is a necessary intervention that has to be executed and requested that the Committee assess the Department on whether there is progress in the work that is being done. He indicated that he was boasting to another Member of the Committee saying that what the Department has managed to do in these past two years is more than what the predecessor Ministry did. He stated that everyone is excited to be a part of what is happening in the Ministry and the Department appreciated that.

He appreciated the criticism on the IEP and indicated that the Department was going back to work on that. He asked the following question, why should we talk about coal in the IEP since there is nobody willing to take up coal, including Eskom?

The Minister stated that the reality is that coal is one of the best performing products in mining today. Rail and ports are actually an obstacle to coal getting bigger in the economy. Therefore, the Department is not going to be in the process of aborting the coal economy because it is not desired in the future. The Day Zero in 2050 is coming and it must be killed now. He indicated that the Department is not going to be a party to the strategy because it is a short-term strategy which is dangerous to the overall economy.

The Minister said he was not going to state the price paid for ROMPCO because he did not want the Committee to get into procurement. He indicated that what was paid is market-related. Private sector made offers and the Department was able to match those offers to get the pre-emptive right. He assured the Committee that the price was market related.

Mr Mileham raised a point of order and said that the Minister had no right to refuse to answer to a direct question regarding public funding. He stated that the Committee heard from the legal opinion that was received on the RMIPPPP that it had a right to ask questions related to public funding. He reiterated the following question: What is or has the Department paid for its share of the Sasol purchase of the ROMPCO pipeline?

The Chairperson asked the Minister to continue and answer the question. He indicated that if there is no clarity on the question, Members were allowed to make follow-ups.

The Minister said he had answered the question when he stated that the price was market-related as it was based on the offers that were made by the private sector and publicly read. He reiterated that the Department had to match those offers before it could exercise the pre-emptive right.

He said he did not know why Members were assuming that there was something that is holding progress in the new petroleum company. When one asks the question, what is holding the Department they make an assumption that the Department is not doing well which is wrong. He highlighted that the Department is working hard to put together the new petroleum company.

He stated that the CEO of PetroSA gave a report on the progress they are making in terms of performance and would come back to explain to the Committee on issues raised in respect of PetroSA. He reminded the Committee that PetroSA had reported a small profit in respect of the issue of registration which means there is progress that has been made.

The Minister agreed with Members of the Committee that there was an issue on salaries and job security in PetroSA during the course of last year. However, there has been consistent payment of salaries and job security this year. He said the Director-General was going to provide the Committee with specific numbers in respect of s189 processes and as the Department continues with restructuring, the entity will systematically move towards profitability.

He reminded Members that PetroSA is an example of asset stripping. The entity was subjected to asset striping and had no CEO from 2014 to 2020 when the new CEO was appointed. He said this is the reason why there is emphasis on investing in regular governance as governance reduces both financial and operational risks. He assured the Committee that the Department was busy working although results were not going to be realised overnight.

Minister Mantashe highlighted that NECSA was going to give a diagnosis of the culture that is in the entity. He said it is not a sin for NECSA to give the Committee feedback on the culture and that the entity is waiting on culture change which is one of the most difficult things in management. He emphasised that it is not just about culture diagnosis and reiterated that NECSA was going to give a full report including that on SAFARI-1 and the progress made so far.

The Minister said he did not know what the Members meant when they said communities are being excluded. He noted that there is generally an assumption that where there is a mine, everybody must go and work in the mine. However, there is no mine that requires 30 people to work in a section that ends up employing 100 people because of employment creation. As a mine grows, it also increases the number of people being employed. He indicated that it is for that reason that when companies approach the Department saying they are on a journey of employment creation the companies are told that they are in the business of making money and in the process of making money, they then can employ people. He said the Department is always supporting businesses making money and in the process, they can then create employment.

Deputy Minister of Mineral Resources and Energy, Dr Nobuhle Nkabane, said the presenter was clear in trying to bring to the attention of the Committee the rationale behind some of the interventions that the Department has decided to employ in addressing some of the key challenges that are being faced in the sector. She said among the key issues that were raised in the report is the fact that some of the mines are ownerless and in such instances, it is very difficult for the Department to trace the owners of the mining rights or lease holders. As a result, those mines are neither operated nor maintained.

She indicated that the report spoke to challenges that result from ownerless mines and one of them is that the mines pose a great risk to public health and safety. She said the water quality is also compromised and is unsafe for human consumption because the water sources are being contaminated by some of the dirt.

The Deputy Minister said the Committee needs to understand that mining is a resource just like water. The mining industry is highly regulated and administered by the Department which draws its mandate from the Mineral and Petroleum Resource Development Act 28 of 2002. Among the responsibilities that the Department has in terms of the Act is to ensure that compliance obligations under the legislation are made.

She said part of the requirements that the Department has to comply with is that it comes up with interventions for the refurbishment or rehabilitation of mines. She said a good suggestion would be that moving forward, the Department has to assess the condition of the mining infrastructure from time to time for proper budgeting of operation and maintenance costs. She said the assessment will also help with other relevant interventions that the Department can come up with in respect of infrastructure.

 She stated that the Department needs to conduct a study to determine ownerless mines. Once identified, the Department can then prescribe all regulatory and legislative requirements which will help improve the industry’s regulatory systems.

Mr Tseliso Maqubela, DDG: Minerals and Petroleum Regulation, said there is a lot of work that still needs to be done in respect of illegal mining. There is a sub-committee between the Department and SAPS called the Legal Review sub-committee which is going to look at what basically needs to be augmented in the current legislation. What then is left is to basically allocate responsibilities between the two legal teams.

He indicated that the Department has adopted a culture that discourages malfeasance. Workers are constantly reminded that someone is interested in the work that the Department does and there is close monitoring. Also, the Department is making extensive use of internal audits whenever there are complaints raised and that has increased collective awareness in the Department which encourages upright behaviour.

He highlighted that for mines that have owners, the Department requires that the owners submit financial provisions before the issuance of a right or permit and that is the standard procedure. The financial provisions have to be revised annually to make sure they are no shortfalls and as they mine, owners are expected to rehabilitate their mines. He emphasised that the biggest challenge is with ownerless and derelict mines.

He stated that part of the challenge in respect of investment comes from the legal challenges with a lot of licenses that are granted by the Department. He reiterated that the Department has accelerated the issue of mining rights. The last time the Department reported to the Committee, there were 649 licenses that had been issued and the number went up to 701 licenses. He stated that the Department is making progress on a weekly basis to try and clear the backlog. However, there are people who appeal frivolously and those appeals have to be dealt with in terms of administrative justice which then consumes time and delays investment. He assured the Committee that there is an overall appetite in investment within the sector.

Mr Maqubela indicated that in the main, the infrastructure being referred to is the average speed of rails moving minerals to the ports and the Department is convinced that the speed can be increased. Infrastructure is affected by criminality but it is a matter that can be looked into by Transnet and the Minerals Council. He noted that Transnet and the Council had met the previous day to look into the issues relating to the improvement and rails.

Ms Buyisiwe Ngcwabe, DDG: Mineral Policy and Promotions, said that over the past 16 months,the team has been working in the energy portfolio, the Department committed itself to understanding the landscape, space and legislative frameworks of the sector. In the last 16 months, the Department has managed to move a number of legislations that date to 2011, such as the Waste Management Bill and some of the Bills have successfully been tabled in Parliament.

She said that for the Committee to understand the status of the National Energy Act, Members have to understand what happened over the last year. The Department has three sets of proclamations which are based on section 21 (1) and (2). The proclamations say that the President may as from time to time through a proclamation bring certain sections of the Acts into operation at different dates. Ms Ngcwabe indicated that she could not give an answer as to why that decision was taken at the time but could confirm that the Department is working hard to try and understand what needs to be done going forward.

She said the Department is looking at the broader reform of the electricity sector in the country. She emphasised that the restructuring process in Eskom is not just about Eskom restructuring but it is about the entire electricity industry restructuring. As the Department moves in that manner, the following question informs the process: What was the purpose of us coming up with such pieces of legislation in particular the National Energy Act? She reminded the Committee that taking a closer look at most of the provisions in the Act, they could have been incorporated in the Electricity Regulations Act which is currently under amendment.

Ms Ngcwabe highlighted that one critical aspect that comes out of the Act is the establishment of SANEDI the main question being could SANEDI not have been established through different means? She reiterated that these are some of the questions that inform the work of the Department.

She informed the Committee that on Monday, the Department had a session with the Electricity Policy Team in which these issues were discussed. As a result, the Department is looking into how it can proceed particularly whether it prepares a proclamation for the President or move and incorporate some of the provisions in the Energy Regulations Act.

She said the other question that confronts the Department is whether or not the issues with the Act have not been overtaken by events through the promulgation and the continuous review of the IRP. She indicated that the IRP does exactly what was intended with the IEP in that the Department is able to show projections, plans and models for future generation capacity for the country and the availability of different sources of energy.

She emphasised that the Department has decided to take a holistic approach by not dealing with the legislations in a piecemeal manner. She said the Department believes that the holistic approach will take the sector to a point at which it performs better for the country.

Mr David Msiza, Chief Inspector of Mines, indicated that from a practical perspective, shafts and binders are causing the biggest risk in the sector. As a result, the Department is continuously reviewing the respective legislation through the issued guidelines to strengthen measures that should be implemented by mines. The Department also inspects mines and conducts audits to ensure that there is compliance with provisions of respective legislation. He acknowledged that some of the infrastructure has been in existence for quite some time and the Department issues the Chief Inspector Directives that outlines what mines must do to ensure that they are safe.

He stated that mines are required to do statutory inspections in terms of the law in terms of which the miners have to go down the shafts to make sure that the infrastructure itself is safe. Mines are also expected to look at the barrel of the shaft to ensure that there are no challenges with the stability of the barrel. He highlighted that the Department requested that mines report back the outcomes of those inspections. The Department also has a system to make sure that when the team from the Department inspects the mines, the inspections are aligned with the law.

Mr Jacob Mbele, DDG: Programmes and Projects, DMRE, gave feedback on the status of the incident that happened in Ekurhuleni. He said from the Department’s point of view, there were engagements with the Municipality and the understanding was that the Municipality had communicated with the family insofar as permission is concerned. However, the Department had heard from the Committee during the meeting that the matter has not been resolved and the team was going to do a follow up with the Municipalities. He reiterated that the Department was under the impression that permission had been granted by the Municipality and that the team was going to make a follow up. 

 He indicated that the Department was trying to secure 2 000 megawatts and which is equivalent to stage 2 load shedding that the country experiences when there is load shedding from Eskom. If the other three projects do not work as indicated in the slides it means 1 200 megawatts of the 1 945 megawatts the Department has procured is not going to be available. This means that the Department will only be able to secure about 700 megawatts.

Mr Mbele agreed with the Minister that procurement was aimed at targeting projects that could come in line as quickly as possible with an understanding that such projects take something like six months or so to come online. He indicated that there is often very minimal if not no options for the Department to close the gap which means that the country will continue to experience load-shedding. He said one would wonder why there will be load-shedding when there are renewable projects coming online. However, if regard is to be given to the specification that was given by Eskom, the entity wants power dispatchable. This means Eskom did not want just energy which renewable energy provides but also capacity which helps the entity mainly in instances of a sudden loss of a power plant. Then, Eskom will be able to dispatch that available capacity as compared to other available technologies of renewable and there is no control with regards to dispatch and dispatches are available when the sun shines or when the winds blows. He emphasised that the long and short of it is if the power is not available there are no options to put in place.

He stated that the Department is leading the process to develop renewable industrial masterplan which is basically taking the allocations in the IERP. The Department is also looking into things that needs to be done to make sure that the Department localise through the value chain the capacity that will be procured going forward.

Mr Mbele highlighted that the team that is putting together the masterplan consists of government and social partners and is led by business entities. The team is currently working and the goal is that the plan should be finalised before the end of this financial year. He emphasised that the masterplan will go a long way in providing certainty for investors. When investors put a power plant down, they need certainty in terms of demand.

He indicated that the Minister is part of the Presidential Climate Commission and that some of the members from the Department are also participating in the Commission occupying different positions. He confirmed that the IRP takes into account the commitments made in line with the nationally determined contributions. The IRP is pushing out for more renewables because there is a cap that limits the amount of emissions that can be pushed out for the next period of time. He said the direction that the Department got from DFF was that the Department calls the pipeline draw decline. The IRP says that emissions will peak as the country completes with Medupi and Kusile and then plateau as the country settles and is not building new coal plants.

He noted that from 2025/26 there will be a decline in emissions as the Department decommissions some of the old coal power plants and replace them with cleaner forms of energy. He confirmed that in terms of the IRP and due to a lower DFF of Eskom, the graph for what IRP looks like is significantly below the set boundary. This means the emissions are less as the country is not burning as much coal due to the challenges within Eskom plants. Also, the emissions will be less because of the much capacity coming from cleaner technologies.

He stated that there will obviously be new commitments in terms of how each sector will contribute and this is part of what the Climate Commission is doing. He assured the Department that the IRP that will be in place will be reviewed taking into account the new vision and focus.

Mr Mbele said there are challenges with the procurement of coal as indicated in the presentation. He said it was important to understand why the projects did not go ahead. The projects did not go ahead not necessarily because investors pulled out but because of the delays caused by the various challenges from the various groups in their environmental impact assessments. That led investors to pull out and focus on other areas but from a procurement’s point of view, the Department is making a market scan to understand what is possible and what is not possible so that if there are any different recommendations to be made to the Minister then that will be done.

Mr Pragasen, confirmed that PetroSA has started taking steps to turn-around and more importantly to reposition the entity for the National Petroleum Company.

He said PetroSA engaged the market as per the governance procedure for the disposal of non-core assets and the first proposals received were not favourable commercially or from the governance perspective. That resulted in delays in which the entity had to reengage to ensure governance and acceptable commercial terms. He indicated that PetroSA resubmitted all the offers for approval by the relevant governments’ forums and that the hope is to close out very soon on the issue of disposal of non-core assets.

He highlighted that there has been some progress to reduce the fixed costs and the measures implemented include the significant reduction of fixed term contracts, allowances in the entity and also the completion of s189 consultation processes. He reminded Members that from the November engagement, PetroSA had a headcount reduction of 500 through the processes and interventions. He said the interventions that relate to gas feed stocks and gas to power are anticipated to annul 200. Further to that, PetroSA is planning on implementing a VFC process to further mitigate any forced reduction of staff.

Mr Pragasen complimented the remarks by the Minister and confirmed that salaries have been paid in full month-on-month and there has not been a reduction in salaries or non-payment this year. He emphasised that work is in progress to ensure that there is progress in respect of salaries and other fixed costs reductions.

He said as per the current interventions and through the necessary government processes, PetroSA believes that the entity will break even in terms of profitability in the 2022/23 financial year and thereafter in the 2023/24 turn towards profitability. However, the projected progress is subject to the relevant timelines on the governance processes and execution thereof.

Mr  Tyabashe (NECSA) said the Minister put a very good foundation on the issue of culture. There was a diagnosis and the plans are being operated well with no concerns in respect of safety. The issue however is on the turn-around strategy as it pertains to projects and the financial outlook and everything else surrounding the business. He emphasised unequivocally that there is no issue related to safety.

He highlighted that the disengagement force in terms of the business and the direction it is taking has been one of the contributors resulting in NECSA deciding to also engage the staff to make sure that they feel as part of the journey to craft a culture for the future of the entity. In addition, NECSA identified the critical position that need to be filled to make sure that the entity operates competently.

He noted that the development of leadership of frontline workers is important to make sure that the leadership exposes the values that is expected to be espoused going forward in NECSA. The entity is also working towards the development of the staff in terms of competencies to promote a culture of high performance.

Mr Tyabashe said the way SAFARI-1 is operated which is in line with nuclear regulatory requirements requires NECSA to conduct continuous reviews which are called periodic safety assessments in the car industry and continuous safe operations assessments in the energy sector. The assessments are for the review of all critical components of the reactor itself and the supporting infrastructure to see how far that can take the plant.

He indicated that the current assessment found that SAFARI-1 is safe to operate minimum up to 2030/32 and it can be further operated on condition that another assessment is conducted before the period. There are in-service inspections that will need to be done before the 2030 period for what is deemed as safe operations. So, in order to have the replacement of SAFARI, NECSA is working towards ensuring that there is no gap between the potential end of life which is 2030/32 and the starting up of the new reactor in the 2032 domain.

He stated that NECSA is following the classical approach of the Framework for Infrastructure Delivery and Procurement Management (FIDPM) which outlines key multiple steps and the initiation part which culminates in the delivery of a pre-feasibility report. The pre-feasibility report was developed and comments were received which will be addressed by the Board. He said after the Board meeting scheduled for 25 August 2021, the decision adopted will assist NECSA move into the next phase which will be the concept phase for the feasibility report itself. He said NECSA is gearing towards contracting in October 2024 and then have the commercial operation of the reactor in 2032.

Adv Mokoena informed the Portfolio Committee that the team had responded to all the technical questions that had been raised and handed over to the Minister.

The Minister handed over to the Chairperson of the Committee.

The Chairperson thanked the Minister and the team from the Department for their responses. He observed that most of the threats, risks and challenges were on the socio-economic scale and the Department needed to find a way of dealing with them.

He said it is important that the Department deals with the challenges from derelict and ownerless mines. He noted that part of the problem comes from legislation as it was discovered that in most instances, most of the companies would have exchanged hands to the extent that it becomes difficult to identify those that could be held liable. He highlighted that at the time of the mining activities there is usually no legislation to hold the miners responsible for rehabilitation. With the new legislation it becomes difficult hence the miners will have to be included.

He stated that the Committee still does not have a researcher and a content advisor on energy. He assured Members that the Committee is working to ensure that the positions are filled up and there is no gap.

The Chairperson indicated that the Committee requested for a presentation from the Department because there had been an over-emphasis on the problem of the fuel pipeline from Durban to Johannesburg. As a result, Members of the Committee wanted clarity on the cost of loss and damages that was incurred and the interventions that the Department is making. He said there had even been a debate as to whether Transnet should also be invited to the meeting or not.

He proposed that the Committee discusses the matter and come up with a way in which the Department can be requested to present again. He said the presentation was also necessitated by a proposal to deal with illegal mining though small-scale mining as one alternative to militate against illegal mining. He proposed that the Department prepares a straightforward presentation to be presented before the Portfolio Committee on the following issues: The issue of small-scale mining, joint activities with other Departments based on the threats thereof, the occupation of space by illegal miners on formal mines and the mechanisms that are in place in that regard.

The Chairperson indicated that the Committee had hoped that the presentation would assist on the issue of syndicate groups. He reminded the Committee that there are mines that cannot operate because either their infrastructure has been burnt to ashes or some people have lost their lives in a manner that is highly questionable. Some of the mines are probably closed and some cannot operate in terms of logistics because their trucks are burnt down. He conceded that some of these issues do not fall under the purview of the Department but insisted that it would be important for the Committee to get a sense of the extent and magnitude of the problems.

He noted that some syndicate groups might be asking for ransoms and some are causing disturbances because of procurement opportunities and for that reason, the acts can be classified as physical threats to the industry. He emphasised that it was important to get a briefing on the issues from the Department.

The Chairperson highlighted that he had the privilege of joining the Department and the KZN government on the issue of RBM and is now aware that RBM is still closed to date. He stated that there has been cases of allegations that due to mining, some of the activists have lost their lives simply because they were opposed to mining. For that reason, it would be nice for the Committee to get a gist of the account as far as it relates to physical threats to mines.

He indicated that it would be prudent for the Committee to invite Transnet so that Members can be briefed on what is being done and the extent to which there has been requested interventions in respect of the fuel pipeline. He said the Committee will also have to invite MINCOSA for a perspective on the challenges, threats and alternative solutions.

The Chairperson stated that he is afraid of dealing with NECSA’s corporate and turn-around plans through the window as there is an outstanding assignment which would be better if presented before the Committee. He said it is worrisome for entities to present on issues saying they are subject to the board and the shareholding. He advised NECSA to try and make sure that the presentations are always ready for engagement and consumption by the Committee. He suggested that the issues raised in respect of SAF and NECSA should form part of their presentation on their corporate and turnaround strategy as per the directive and advice of the legal services of Parliament.

He highlighted that the Committee still has to be briefed by the Department with SAF on the merger of the three entities and the formation of a state owned Petroleum Company. He indicated that the issue will have to be presented much more formally for the consumption and engagement by the Committee.

He asked Members of the Committee to remind him of any issues that remained untouched from the interventions during discussions.

The Chairperson addressed the Director-General on an administration issue. He said the brief had requested a presentation from the Department and not from entities. The Department was supposed to present a consolidated report to the Committee and then bring along the entities to make additions or points of emphasis on the presentation. He emphasised that if the Committee does need a briefing from a specific entity that would be communicated.

The Chairperson said power that is spread around loses flavour and reiterated that when the Committee requested a briefing it was specifically by the Department on the comprehensive joint work that is being done by the entities. He indicated that this was a repeat of a situation that once happened before and the Committee is making the appeal again that if Members need clarity from an entity, then that will be specified.

He asked for follow up questions from the Committee Members.

Mr Mileham said the question he asked on section 3 (4), (5) and (6) of the National Energy Act which relates to publishing energy data and energy analysis by the Minister was not answered.

Mr M Mahlaule (ANC) said the meeting had been a difficult one to participate in. He agreed with the Chairperson that the presentations were not what Members had asked for. He reminded the Committee that he had specifically said that the Committee should ensure that there are no ambiguities in requesting for information on the pipeline. It has been reported that on level 5, the pipeline was tampered with weekly and the country lost a lot of money. He recalled saying that the Department is not best qualified to make a presentation on the pipeline and Transnet would be better suited to give the briefing.

Mr Mahlaule said he was still not clear on the issues that were requested from the Department and asked the following questions: When are we going to have it? Which entity is going to brief the Committee?

He emphasised that it was not acceptable that after two years, the crisis of syndicates is still not yet properly explained to the Committee. He asked if the Committee could be concrete in respect of the request for information.

Mr Mahlaule explained that he was not saying the presentations were not satisfactory, rather his view was that the information contained was not what the Committee had hoped for as per the requests submitted.

The Chairperson stated that he had suggested that the Committee should invite the Department to give not just a statement on the incidences but also a quantum of the implications or losses suffered. The Committee will also invite Transnet and MINCOSA, although MINCOSA will be presenting mainly on the syndicates in the mining industry. From those presentations, the Committee should then be able to identify the people who can further assist the Committee in making decisions going forward.

He asked the Director-General and the Minister to take cognisance of the issues that were raised.

Ms Ngcwabe apologised to the Committee for missing the question that had been raised. She stated that s3 (1) says the Minister must make available measures to effect the subsequent sub-sections. The Department realised that it publishes data on an annual basis and that the manner in which the data is published is not necessarily 100% in compliance with the provisions of s3 (4) and (5). She said the issue of data publication is one of the issues that the Department is looking closely into to try and see if there should be a similar section as s28 of the MPRDA which makes it a legal requirement for mining companies to submit production statistics to the Department so that the Department will be able to produce reliable statistics.

She emphasised that the Department is looking into how it can create an enabling environment or those measures that will allow all generators, sellers, on-sellers and traders to submit data. This is so that over and above the remodeling and the projections the Department makes, there also be reliable data like active production statistics in terms of power generation. She said this is being considered as the Department is doing a review of all the pieces of legislation.

The Minister said the Committee is correct to involve Transnet on the issue of the pipeline from Durban to Johannesburg because the pipeline belongs to Transnet. The Department can then only make complimentary comments.

He expressed satisfaction with the interactions and thanked Members for their contributions. He indicated that the Committee will get a comprehensive report after the Department has gone to Cabinet. He requested that after reporting to cabinet, the Committee should give the Department time to come back with a comprehensive report.

The Chairperson asked for any follow-ups.

Ms Madokwe said she did not recall getting responses on two of her questions. She said the first question was on the challenges in the mining sector particularly the human rights and labour relations violations by mining companies. The second question was on karpowerships not being given environmental authorisation considering that they were expected to give the country the bulk of the electricity. Her question was, what happens now and what are the implications?

Minister Mantashe said he had responded to both questions when he went into detail on the Department that deals with industrial relations issues. He reiterated that sometimes, there is a misconception that DMRE is a Department for everything but industrial relations issues in the mining industry are dealt with by the CCMA, Labour Court and Labour Appeals Court.

He stated that the Department is not going to replace the weakening effect of trade unions but helps trade unions be strong in their work and representation of miners.

The Chairperson promised to be specific in drafting issues. He said Members can agree that the Committee will invite Transnet and MINCOSA. He reminded the Department to take note of the issues that require a more detailed presentation. He said the Committee will require a thorough briefing on interventions made for example the joint operations done with other Departments, commercial interventions to mitigate illegal mining and the implications of illegal mining penetrating the formal mining sector. Also, the Department will have to present on the issue of syndicates in mining, cases of extortion and other related matters including threats to logistics in the industry.

The Chairperson thanked the Minister, Deputy Minister and the Department for the presentations. He said he hoped that the Minister and DG have consolidated power for the benefit of the Committee for when next Members request some information from the Department. He emphasised that consolidating presentations helped even as far as time consumption and engagement is concerned.

He said Members had identified the approach to be used and the entities that the Committee would need to work with going further.

The meeting was adjourned.