... in this strenuous exercise, from members of the committee to the Minister and Deputy Minister of Mineral Resources. A special thanks to the Chairperson, hon Johnny de Lange and the Minister of Water and Environmental Affairs, hon Edna Molewa, for their guidance and co- operation in working under unusual circumstances of a cross-cutting nature, departmentally as well as legislatively.
Most of all, I want to thank Minister Shabangu, who has tried to provide her guidance and expertise in the work she does, as well as the Chief Whip of the Majority Party for the confidence and leadership he showed in the successful passing of this Bill.
I want to give special recognition to the unified manner in which the support staff has been attending to the portfolio committee irrespective of the restricted delegation of their duties and work, not forgetting the extraordinary talent and specialties they portray in their capacities. I am not leaving the Department of Mineral Resources behind.
My final vote of thanks goes to a special mother, leader, mentor, and my political stalwart and admirer in the movement, Deputy Minister of Police, Makhotso Sotyu. Thank you for the confidence and trust you have shown me. I dedicate this speech to your teachings. I thank you. [Applause.]
MR J R B LORIMER: Speaker, we have a Bill before us; which even in the most benign interpretation is going to severely damage the mining and energy industries. However, I am not prepared to be benign about this Bill. I think it can simply be described as a charter for crony enrichment that will cost us investment and jobs. Our mining industry has not been healthy for years. The 2002 Mineral and Petroleum Resources Development Amendment, MPRDA, Bill was a failure. We missed the last resources boom because of it. The Bill was passed when the ANC government was beginning to tilt the playing field, not as it claims to allow greater benefits to flow to the poor, unemployed people, or workers. No, the playing field was tilted to make sure that people who benefited were what one could describe in shorthand as the three Cs. The three Cs are comrades, cronies and cousins.
I have explained in this House before about why this Bill is bad. I shall explain again, not because members of government will listen or be swayed by it, but because those who are going to vote for this Bill must never say, they did not know what they were voting for. Mining companies and investors have long complained that there is not enough certainty in South Africa's current mining law. Mines take a long time to build and develop. Investors need to know the rules that will pertain to their investments years down the line.
Those rules can be most certain if they are contained in legislation. Legislation can be changed, but it takes a long time and the process is fairly transparent. It is not so with regulation. This Bill has more than 30 instances where key rules will be decided by regulation. The Minister decides on regulation. It is opaque and can be changed rapidly. It provides none of the certainty that investors need and thus will put us in a worse position than we already are.
What this Bill seeks to do is to put us in a place where the Minister says to potential investors, "here is a mineral prospect, make me an offer". Does anyone really think that companies will get that deal unless they are comrades, cronies or cousins; or unless they are contributing election funds to the ANC? The possibility also exists; they may try to grease the palms of top officials. Looking at the performance of this government, who can confidently say that those offices will not be accepted?
Other low lights of this Bill include the power given to the Minister to block exports of mineral products. The intention is to give lower priced inputs for manufactures. The government vehemently denies that this amounts to the mining industry subsidising the manufacturing industry, but that is exactly what this is.
The World Bank and others have argued against beneficiation at the expense of mining. We are already seeing the effects of this in the coal sector where there have not been enough major new mines, and neither will there be. By trying in this way to solve the problem of coal supply to Eskom, this Bill will make it worse. So when there is no coal, and the lights go off again, stand by for more feeble excuses.
This Bill also gives government the power to nationalise at fire sale prices any drilling operation that finds oil or gas. Drilling companies can be forced to give away the other 80% of the find at any low price the government is prepared to pay after they have given away 20% free carried interest. Will anybody drill under those conditions, even for the lower risk shale gas? I would not bet on it.
So the much talked of economic game changer is destroyed through the infantile economics policies of the ANC. The government may just say it is driving a hard bargain. This moves beyond hard bargain into just plain silly. Investors do not reward silly governments with good credit ratings. If you think that our credit rating is going to improve, best you think again.
Another low light is the disappearance of the Petroleum Agency of South Africa, Pasa. The Petroleum Agency of South Africa did its job well, that is why there has been so much interest in our potential new energy industry. So why do away with the agency? Are we surprised of the widespread belief that they were too professional to make special concessions to comrades, cronies and cousins? Stand in the way of crony enrichment and you have to go.
Half of Pasa's function is supposed to go to the Council for Geosciences; the same council for Geoscience which recently came before the committee and said that it does not have enough money while the Treasury has given them money to fulfil their current mandate. So how are they going to do the new functions they are supposed to do under this Bill? Yet another failure.
During the passage of this Bill through the committee, I have been accused of getting excited and being harsh. That is not harsh. I will tell you what harsh is, harsh is when you see South Africans who are in their 30s, who have never held a proper job and are unlikely to ever in their lives, particularly under this government. Their hopes for a decent life are being slowly smashed.
This government is incapable of creating the jobs we need to pull our people out of the misery of wasted lives. This government is content to see people condemned to the scrap heap of permanent unemployment, just so the three Cs can have a turn at the trough. Mr Speaker, the poor are being thrown away by this government, which puts crony enrichment above the salvation of the South African people. [Applause.]
MR C C HUANG: Hon Speaker, Cope argues that, among other things, to remove ambiguities that exist within the Mineral and Petroleum Resources Development Act, MPRDA, streamlined administrative processes and improved regulatory system, the Bill adds to regulatory uncertainty by giving the Minister of Mineral Resources a significant number of new powers framed in such broad terms as to encourage their arbitrary and unequal application.
The Bill attempts to jettison the current MPRDA requirement that beneficiation must take place economically. It obliges the Minister to initiate or promote the beneficiation and leaves aside the key question of whether this can be done on an economical basis. Export controls, as the National Development Plan has warned, could make existing mining operations financially unstable, leading to mine closures and job losses. The Bill's insistence on local beneficiation overlooks economic realities and could have severe consequences.
The Bill also empowers the Minister with broad-ranging powers to impose additional community obligations on mining houses and further gives her an unfettered authority to identify certain minerals as strategic and then it seems to subject such minerals to both price and export controls. Mining companies cannot invest for the future if the minerals they seek to extract at great cost could at any time be made subject to state controls of this kind.
Overall, the Bill also increases regulatory uncertainty by removing the first in, first-assessed rights principle. Based on experience elsewhere in Africa, the higher the interest thus claimed by the state - there is nothing in this Bill to limit this - the more new investment will be discouraged.
These discretionary powers being granted to the Minister and her officials in this Bill substantially contradicts the NDP's call for regulatory reform that provides policy certainty. Effective ways need to be found to cure the ambiguities in the MPRDA; introduce a transparent and objective process for granting mining rights; avoid further onerous regulatory change; and give the holders of mining rights the security of tenure needed to restore confidence in South Africa's minerals regime. Only in this way will the government be able to encourage an upsurge in the mining investment so vital to increased employment, growth and prosperity.
The MPRDA fails to give effect to these principles by failing to provide for adequate notices and consultation; fails to make provision for access to information by interested and affected parties, rendering even those consultation opportunities that are provided for ineffective.
Cope therefore submits its reservations that this Bill does not rectify these inadequacies in the MPRDA, nor does it provide for appropriate consultation with other organs of state through the Regional Mining Development and Environment Committee, therefore indicating our lack of support for the Bill. I thank you.