Hon Chairperson and colleagues, I'm not sure whether Mr Gona's admission - that, under the ANC government for the past 16 years, the Gini co-efficient has progressed to being one of the worst in the world - is basically an admission that we need a new government; that they have failed! [Interjections.]
However, returning to my speech, recent mining production figures published by Statistics SA show that mining production declined by 6,7% year on year and fell by 5% in 2008. The decrease in annual production of diamonds and, in particular, gold, confirms a growing concern that mineral resources are finite and that mineral regulation is of the utmost importance in maximising its contribution to much-needed economic growth.
The proverbial resurrection of the state-owned African Exploration Mining and Finance Corporation, the AEMFC, formed in 1944, indicates ominous signs which reflect the state's view of its role in mining affairs. Applications for prospecting rights by the AEMFC were recently lodged on wine farms in the Western Cape and in other parts of the country. Whilst the applications in the Cape winelands were withdrawn due to major public opposition - and the director-general's publicly stated view that mining and wine farming were irreconcilable, a view that is strongly supported - many other applications are still pending. Government has no right to partake in private-sector mining activities. It has made a mess of SAA, Transnet and many other state-owned entities, not to mention Eskom. The state now strangely considers itself fit to venture into mining activities. When considering the reasons for government's participation, it becomes clear that the underlying motivation with regard to Eskom and the Chancellor House deal, resulting in massive financial benefit accruing to the ANC, is also applicable here. The decision by the Minister to grant numerous exemptions to the AEMFC, exempting it from having to apply for prospecting and mining rights, as well as mining permits, is at best ill considered. At the least, these exemptions should be withdrawn in order to allow for a level playing field between the private sector and the state- owned company, if any. The state, as regulator, should be in a position to distance itself from the mining sector to ensure objectivity in the awarding of mineral rights to applicants.
The Kumba-ArcelorMittal clash has been overshadowed by the department awarding, under strange circumstances, a prospecting right to an ANC-linked company in an instance where only a mining right could have been awarded. It is on record that Kumba lodged an application with the department for the 21,4% undivided mining right formerly held by ArcelorMittal which they admittedly failed to apply for.
Imperial Crown Trading, ICT, a company whose directors have strong ANC links, was, surprisingly, awarded the mining rights, whilst the application of Kumba, a well-respected mining company, was turned down. ICT appears to be no more than a shelf company with no proven skills to prospect, let alone mine, hence the possible motivation for incorrectly awarding a prospecting right where a mining right is applicable. Its ability to mine and its access to capital can only be limited, if not non-existent. It is clear that a previous employee at Luthuli House, Andrew Hendricks, the husband of the previous Minister of Water Affairs and Forestry and a senior official at the National Union of Mineworkers, NUM, all serve on the board as directors.
Such apparent self-enrichment schemes by members closely linked to the ANC is concerning, whilst the involvement of a senior member of a major mining union is difficult to justify in light of the plight of its own members.
Minister, if this government is serious about the minerals sector, ostensible fraud and underhandedness by officials in the department in the awarding of mineral rights will only lead to growing dissatisfaction amongst applicants and the public and will lead to obscure results. We are aware that the department has indicated that it is duty-bound to consider so-called internal appeals to the Minister, but more often than not these appeals seem to be a futile exercise as they are, as a rule, turned down. Recent media reports, for instance, indicated that an ANC MEC in the Northern Cape continued to mine whilst not having the rights thereto, without any consequences.