Chairperson, chairperson of the select committee, hon Freddie Adams, hon members, and Deputy Minister of Mineral Resources, welcome.
I am pleased to get yet another opportunity to present our Budget Vote to this important House, which is the NCOP. Before I deal with the business of the day, I would like to take this opportunity to pay a special tribute to the fallen hero of our struggle, our mother, the mother of the nation, Mama Albertina Sisulu, who passed away on 1 June 2011. Those of us who became involved in the struggle as young women have fond memories of how she instilled discipline amongst us. She taught us humility and also schooled us in the art of balancing our role as activists and being young women and mothers. We are truly grateful for her contribution to both our personal and political lives.
We are a government department that has an obligation to ensure that we use our regulatory competence to contribute to the overall aim of job creation. Members may recall that President Zuma in his state of the nation address earlier this year placed this right at the top of the agenda for the term of this government.
In carrying out these demanding commitments, we are pleased to present to this House a budget allocation for 2011-12 of an amount of just R1 billion. This represents an increase of R40 million from the previous year's budget of R995 million. In managing this budget, extra care will be taken to ensure that we are able to successfully service all nine provinces and bring service delivery to our people.
We are operating within an environment where prospects for an improved performance of the mining industry have never been so favourable. The prevailing set of circumstances that I indicated shows we are slowly emerging from the recession and this presents the mining industry with an opportunity to contribute meaningfully to our gross domestic product, GDP, and job creation.
Our mining and minerals industry continues to be a crucial backbone of our economy. Working together with our social partners, organised labour, business and other sister state departments, we have developed a growth and transformation strategy which identifies binding constraints to the growth of this sector.
We have identified the steps that are required to optimise this sector's extractive capacity, attract investment and develop the potential to create jobs, and these have been captured in the New Growth Path. This will ensure that the mining sector realistically unleashes its growth, employment and transformation potential to enable it to be the sunrise industry that it has proven to be.
To this end, we are collaborating with other key partners such as the Departments of Transport, Public Enterprises, Energy, and Water and Environmental Affairs to ensure that we address the binding constraints that have been identified, which include rail and road networks, energy infrastructure, and access by the industry to scarce water resources.
I am also pleased to report that the African Exploration Mining and Finance Corporation, the rudimentary organ of the state-owned mining company, recently launched its first coal mining project in the province of Mpumalanga. Consequently, it has managed to have its first coal stockpile, which it will supply to Eskom this month.
When we addressed this House last year, it was during a period that was characterised by a great deal of concern from our international and domestic investors about our administrative processes framework. Amongst the concerns raised was the slow pace of processing applications.
In responding to concerns raised, I instructed the director-general to visit all nine provinces to investigate the costs and proposed remedial actions. In the light of his report, I imposed a moratorium on new prospecting applications to allow us the time and space to systematically correct and improve our administrative processes.
During this period of the moratorium, we conducted audit inspections and reviews. The outcome of this audit pointed to, amongst other things, cases of administrative errors, such as double granting, fronting, nonpayment of prospecting licences, noncompliance with environmental management plans, as well as cases of rights-holders who could not be traced. In a bid to enhance transparency and effectiveness, we have since launched an online licensing system called the South African Mineral Resources Administration, Samrad. This system will reduce the human involvement in the processing of applications.
I have since lifted the moratorium in all provinces, except Mpumalanga, due to its unique complexities and challenges. We anticipate that the moratorium will be lifted in September this year.
With a view to maximising our national benefits from our mineral resources, we are pleased that we have now formally apprised Cabinet and received tacit approval on our beneficiation strategy. We are confident that this has given us a firm basis to pursue a comprehensive and integrated approach to mineral beneficiation.
Down-stream, side-stream and up-stream activities and industries that associate with our mineral wealth will be systematically and carefully structured so as to achieve our overall objective of job creation and increased government revenue. While we are steaming ahead with our beneficiation strategy, we are not oblivious to the fact that beneficiation, resource-intensive as it is, is simultaneously knowledge- intensive.
In this regard, working together and in partnership with the Department of Science and Technology and other science councils, such as Mintek and the Council for Scientific and Industrial Research, CSIR, we will collaborate on issues related to research and development. This will ensure that innovation becomes the epicentre of beneficiation. This will, amongst other things, include energy and water consumption efficiency solutions.
We are currently reviewing the Mineral and Petroleum Resources Development Act to improve its current construction in order to remove ambiguities and make provision for effective consultation processes. In addition to the above, we will be strengthening the law to allow the Minister to invite applications for mining rights where rights were removed or expired.
The amendment would also include strengthening the environmental provisions to ensure that we promote sustainable and responsible mining. In the same vein, we have identified the need to review the Mine Health and Safety Act. This review will strengthen enforcement provisions, reinforce penalties, provide clarity on certain definitions and expressions, as well as effect certain amendments to ensure consistency with other laws, particularly the Mineral and Petroleum Resources Development Act. These amendments, as well as new regulations, will soon go through the parliamentary process.
We have also been inundated with a number of concerns emanating from some of our communities where mining activity is taking place. Our assessment is that these concerns emanate from outstanding issues that were never fully addressed; a lack of understanding of the role of the regulator in addressing community issues; a lack of understanding of what should be done by mining companies, as well as noncompliance on the part of rights-holders on the commitments that they have made to affected communities, which, I must indicate, we are not always aware of.
I want to assure hon members that we are addressing these concerns in a structured way. I am also aware that these very matters arose during the NCOP's recent visits to various communities. It is our intention to work together with this House to address community concerns.
President Zuma recently visited Motlhotloa to launch an empowerment project which places communities as direct beneficiaries of empowerment. This transaction is a model that should be replicated, as it may very well provide a model for resolving the community and business dynamics. Working together with the NCOP, we will be guided by the framework of the Nhlapo commission, particularly when dealing with the concerns from communities within the jurisdiction of traditional leaders.
As I said last year, we have embarked on a programme of rehabilitating derelict, ownerless and unrehabilitated mines. Even though funding still remains a challenge, we are addressing this matter where mines continue to pose a serious environmental and health risk to the neighbouring communities.
We have embarked on a programme to permanently eliminate environmental damage by getting the land impacted by the mining activity back to a sustainable, usable condition. Accordingly, five derelict and ownerless mine sites were rehabilitated in the 2010-11 financial year.
These sites are as follows: Jebolo, Owendale, Strelley, and the Prieska mine site and Prieska mill site respectively. This year we have prioritised and are rehabilitating additional sites. They are Osizweni in KwaZulu- Natal; Lusikisiki quarry in the Eastern Cape; Penge, Mafefe and Kromellenboog in Limpopo; and Heuningvlei, Vergenoegd, Gamatsamai and Bestwell in the Northern Cape.
We have also developed a new set of comprehensive measures to ensure that we do not have a continuation of this unfortunate legacy. Going forward, companies will be requested to review their financial provision for rehabilitation so as to ensure that rehabilitation takes place post mining.
I am pleased that Cabinet has endorsed our earlier and correct decision to impose a moratorium on shale gas exploration in the Karoo. I have since appointed a task team of senior government officials, led by my department, to conduct further research, including looking at some of the international experiences, in order better to inform our policy and approach on this matter. I am anticipating that I will receive a report from this task team at the end of July this year.
My department is greatly concerned about both the continued loss of life and health challenges facing the mining sector. The mining industry cannot afford to continue losing lives at this alarming rate. It is quite clear to me that we need a radical approach to turn this around, and we will do so even as we respond to the expected growth of mining, especially in the North West, Limpopo, Mpumalanga and Northern Cape regions respectively.
My department will continue with interventions including, amongst other things, restructuring the inspectorate to improve our enforcement capacity in the regional offices. This will incorporate the establishment of regional compliance and investigation units.
These units will be focusing on inspections and audits. Legal advisors or practitioners will also be appointed at regional offices to assist with investigations and enquiries, and enhance the possibility of prosecutions as and when necessary. The North West regional office will be split into two separate offices, and satellite offices will be established in other identified regions to improve on the monitoring and evaluation of the health and safety programmes at the affected mines.
Also, the chief directorate of occupational health has been established and its operational mandate is to enhance the focus on occupational health matters. The Mining Qualifications Authority, MQA, will spend R260 million on supporting the mining and minerals industry with skills development. This figure excludes mandatory grants of approximately R350 million being given back to the industry.
There is a need to continue our partnership with further education and training, FET, colleges through the MQAs, with the FET artisan development initiatives, particularly in areas where there is significant growth in mining. Already there is noticeable progress in a number of mines, which include Upington, Rustenburg, Phalaborwa, Sekhukhune and Vhembe, with regard to artisan training.
Work experience is important for graduates in the area of mining engineering, geology, and environmental metallurgy. The MQA is supporting this objective through the allocation of bursaries to about 500 learners who are studying towards mining-related qualifications at universities across all provinces.
The department will monitor these programmes to ensure that the intended beneficiaries do indeed benefit from this initiative.
In conclusion, I want to thank my senior officials and the rest of the Department of Mineral Resources staff for their commitment and dedicated support. I also want to indicate to this House that our director-general, Adv Sandile Nogxina, who is not here today due to work commitments, will be going on early retirement this month.
He has been with the department for 14 years, and I must say that he has contributed well and steered this ship in a way that has taken us to where we are now. He has been committed to the transformation of this sector, and his contribution cannot be forgotten. Thank you, Chairperson. [Applause.]