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The Portfolio Committee on Mineral Resources, having undertaken an oversight visit to Schmidtdrift, report as follows:
The Portfolio Committee on Mineral Resources (the Committee) embarked on a follow-up oversight visit to the Northern Cape to engage specifically with the Provincial Legislature, Department of Mineral Resources, New Diamond Corporation Limited (Mining Company) and the Schmidtsdrift Community in order to assist during the handing over of an amount of money which was owed by the Mining Company on royalties to the Schmidtsdrift community. The engagements also aimed at addressing issues of the mining permit of the Schmidtsdrift community.
The Committee met with the Deputy Minister of Mineral Resources, Mr Godfrey Oliphant; Office of the Northern Cape Province Premier, Ms Hazel Jenkins; the Management Committee of the Schmidtsdrift Community Property Association; and the Schmidtsdrift community.
The Republic of South Africa (South Africa) is endowed with mineral resources and they play a key role in the economy of the country. South Africa accounts for 88 percent of known global resources of the platinum group, 80 percent of manganese, 72 percent of chrome, 32 percent of vanadium and 30 percent of gold. The Province of the Northern Cape (the Province) is one of the provinces that are wealthy in terms of mineral reserves. The province accounts for a greater percentage of diamond reserves. Other minerals that are mined in the Northern Cape include iron-ore and manganese. However, the poverty levels are high in the Northern Cape. This is one of the reasons that necessitated the Portfolio Committee on Mineral Resources to conduct an oversight visit in the Province to ascertain how the mineral wealth of the Province could be leveraged to improve the lives of communities that are surrounding mining areas.
The Committee conducted an oversight visit to Kimberley and surrounding areas from 22-26 November 2010. The Committee met with mining companies and communities surrounding those mines. Schmidtsdrift was one of the areas that were visited during that oversight. The Committee could not meet with the New African Mining, the mining company in that area, due to the fact that the mine was said to be non-operational and was also being sold to new owners. According to the community, the mine also owed them an amount of money in royalties. The Committee has therefore investigated the matter hence the decision was reached to conduct a follow-up visit on engagements with the Provincial Legislature as well as communities in order to assist the Schmidtsdrift community to access the money owed by the company on royalties. This is something that the Committee has investigated and therefore wanted to assist in the handing over of that money and also to address issues of the mining permit of that community.
3. Composition of Delegation
The delegation comprised of Mr MF Gona, the Chairperson of the Committee and Leader of the delegation, Ms FC Bikani (ANC), Ms DH Mathebe (ANC) and Mr MR Sonto (ANC). It is worth noting the fact that the delegation that was approved for the oversight was four members consisting of three ANC members and one opposition member. However, all opposition members apologised and indicated their unavailability for the visit hence the delegation consisted of ANC members only.
Ms N Skaka (committee secretary) and Ms S Bawa (committee assistant).
The Department of Mineral Resources (the Department) was represented by the Deputy Minister, Mr Godfrey Oliphant; Mr S Rasmeni, Head of the Office of the Deputy Minister; and Ms Cathy Grosch-May.
The Office of the Premier was represented by the Premier, Ms H Jenkins; MEC for Agriculture, Land Reform and Rural Development, Mr N Shushu; the Director-General, Mr J Bekebeke; and MEC for Health, Mr M Sokatsha.
3.4 Prixley kaSeme District Municipality
The Municipality was represented by the Local Economic Development (LED) Manager, Mr S Madyo.
The New Diamond Corporation (PTY) Ltd (NDC) was represented by its lawyer, Mr David Levithan; and its Directors, Mr Y Weltsman, Mr J Kogl and Mr DJ Coetzee.
The Union was represented by Mr J Lekgamana
3.7 Schmidtsdrift Communal Property Association
The Schmidtsdrift Communal Property Association (SCPA) was represented by its Chairperson, Mr S Molelekwa; and its members, Ms E Jogom, Ms G Olifant, Mr G Mokgoro, Mr O Dibakwe, Mr G Noko, Mr J Mompali, Mr K Alamu, and Ms M Johane.
4. Meeting with the Office of the Premier
The Committee met with the Office of the Premier on Friday, 03 June 2011. The Premier gave some welcoming remarks and apologised that she was going to leave early due to the fact that she had to attend a funeral of Mr H. Visser in Namaqualand. She however gave Mr Shushu, the Member of the Executive Committee (MEC) for Agriculture, Land Reform and Rural Development, authority to represent the Provincial Government in all meetings. Issues discussed ranged from the Schmidtsdrift community mining permit which the Deputy Minister of Mineral Resources appealed that the matter not be discussed in that forum but to be reserved for another platform; and money owed by the New Diamond Corporation (Pty) Ltd (NDC) to the Schmidtsdrift communities on royalties which was to be handed over to those communities on Saturday, 04 June 2011.
The Management of the NDC presented the history of their operations over the 8 years in Schmidtsdrift and the changes in management, and indicated that they had new management and investors. Amongst others was the fact that their prospecting licence was suspended pending rehabilitation of land in Schmidtsdrift. Outstanding royalties payable were estimated at R3,2 million but these were said not to be readily available despite undertakings to hand them over on 04 June 2011 to the communities. NDC also claimed that an amount of R2,2 million was handed over to the Schmidtsdrift communities in the Schmidtsdrift community hall in September 2007. They provided that they wanted to clear all the problems with the communities and start on a clean slate. Their first step was the paying of all outstanding salaries followed by the rehabilitation process. There were concerns from the Committee and the Provincial Government that NDC was not acting in good faith as they would always change their statements. It was resolved that written commitment be made to avail money before end of July 2011 and that community meeting to be held on 04 July 2011 to identify priorities to be funded with the money. A trust account was to be opened where the money would then be transferred. Concerns remained that the amount may not be enough or reflective of what was really due to the community of Schmidtsdrift, thus financial statements would be needed to verify the information.
Regarding the issue of the Schmidtsdrift Communal Property Association (SCPA), options included its recall and replacement which Pixley kaSeme representative objected to as being premature given its legal standing. The Committee together with the Provincial Government (represented by the MEC for Agricultural, Land Reform & Rural Development) proposed the formation of a Task Team which was to evolve into a Council of Stakeholders following the successes in other areas, where a Curator was appointed to replace functions of the Communal Property Association (CPA) as a means to eliminate fights and foster quicker service delivery. It was further proposed that the SCPA have two representatives on the Task Team and this was extended to include other groupings. That position was unanimously adopted by the Committee, Deputy Minister, MEC on behalf of the Provincial Government and the Pixley ka Seme District representative, in the absence of Local Municipal representative. The Task Team’s Working Committee was to comprise of the local Councillor and local municipal officials, Community representatives and the SCPA representatives. This was to be a subcommittee supporting the Task Team’s work. The District would be more on the management side due to concerns raised around limited budget for travelling of its representative. The Working Committee was to meet before the 10 June 2011 to work on the mandates given to the Task Team and table its first report to the management team of the Task Team by 30 June 2011. The Task Team through its management team would review and finalize the report for presentation to the Committee. The lifespan of the Task Team was said to be limited to six months only and would have to table a final report on its work to the Committee by the end of November 2011.
5. Meeting with the Management Committee of the Schmidtsdrift
Community Property Association
When the SCPA was informed that the Committee was going to visit Schmidtsdrift, its management committee requested a meeting with the committee members before the community meeting which was to be held on 04 June 2011. The Committee agreed to meet with them on Friday, 03 June 2011.
The SCPA briefed the Committee as follows:
The New Diamond Corporation (NDC) started to operate in Schmidtsdrift in the year 2000 and was liquidated in 2004. In 2006, Reho, a contractor under Nare and Adamas operated with Lonrho being their investor from Britain. Lonrho owned 80 percent of the shares. Lonrho complained about financial difficulties in December 2008 and was therefore provisionally liquidated. It was then placed for bidding and the New African Mining (NAM) won the bid. NAM operated for seven months, pulled out for reasons known to them and sold their shares to the current owner using the name of NDC.
On 10 February 2011, the SCPA Management Committee met with the new owners who informed them that:
The SCPA Management informed the Committee that they were concerned with the fact that the name NDC kept being used by each company coming to Schmidtsdrift whereas they were informed that it was no more. They said that this was causing confusion amongst the community. They were also concerned with the fact that the prospecting rights had been used by the different companies for ten years with no social and labour plans, social development, and skills development for employees.
They requested that the Committee advises them on the issue of royalties and applying for a mining right for the community. They further requested that the Committee investigates the matter of prospecting rights existing for ten years. They admitted that the amount of R2,2 million was indeed paid by Lonrho to the communities in September 2007. They indicated that, as a matter of policy, when they received the money, they gave it to people who manage it. They transferred it to Standard Bank and from there, it went to their investor, Old Mutual, where it was developing. They informed the Committee that they did call general meetings where they gave financial reports. The last time they checked, they had R6,4 million which was made of the R2,2 million they received on September 2007 and the R4 million which was received before September 2007. The Committee advised them that when they receive the royalties’ money, they do not get it for balance accumulation and interest but get it to develop its communities.
6. Meeting with the Communities of Schmidtsdrift
General sentiments raised related to a memorandum previously submitted to MEC Shushu’s Office calling for the recall and replacement of the SCPA. The group which was in contact with the MEC’s Office raised issues relating to Chieftaincy in Schmidtsdrift and the need to place the area under administration of a Curator as was believed to be the case in Mier, where the Department intervened. Others wanted the NDC to be cut from the application for a mining permit. This led to the common view that these were narrow self interests from segments of other groupings who did not care about the plight of people engulfed by poverty in Schmidtsdrift. Most of the community members were interested in changes relating to socio-economic situation for all inhabitants. Thus, the Committee advised that the development of Schmidtsdrift was key and that employment and other socio-economic issues should receive preference. Minorities, with contrary views, were advised to exercise their right to object through courts of law even though plans for development would proceed to help those in dire need.
Communities were informed of the proposals made in the meeting between the Committee and the Provincial Government that included the establishment of the task team. It was however reiterated that this was dependent on the Communities’ acceptance. The Task Team was to work with the SCPA as the legitimate structure to achieve the set priorities. Other processes like replacing the SCPA would require steps set out in the Constitution of the SCPA. They were informed that the off-take agreement was not legal and that the Department was busy trying to find a better deal for the agreement. After a long discussion, it was agreed upon that the resolution to establish a Task Team be passed. Members of the Fonteintjie Trust however indicated that they were not going to take part in the Task Team.
The majority of inhabitants raised their hopes for unity and progress in creating beneficial relations. The following were their priorities:
The Portfolio Committee on Mineral Resources, having met with all stakeholders as mentioned above, made the following observations:
The lack of consensus on development imperatives was the main cause for delays in development of area. Allegations against and from the SCPA were signs of deep rooted problems in the community. The concurrent emergence of pressure groups further entrenched the notion of the prevalent divisions in the community. The point of core was that all parties claimed to want stability and accelerated development in the area.
The Portfolio Committee on Mineral Resources, having heard evidence from all stakeholders listed above recommends the following:
The Committee noted all the issues raised by the stakeholders. It was clear that issues raised by the communities were similar and were revolving around the recall and replacing of the SCPA, as well as implementation or non-implementation of Social and Labour Plans by the mining companies. Another common issue raised by the communities was the lack of consultation by the SCPA. However, noting from the deliberations, it would be more appropriate if the SCPA can try and resolve their differences with the communities as they are there as their representatives.
The Committee would like to extend its gratitude to the Office of the Deputy Minister, Office of the Premier, Prixley ka Seme District Municipality, the NDC, the NUM, as well as the Schmidtsdrift communities for their great assistance and participation during the oversight.
Report to be considered.
2. Report of the Portfolio Committee on Mineral Resources on its oversight visit to the Council for Geosciences on 2-3 August 2010, dated 10 November 2010
The Portfolio Committee on Mineral Resources, having undertaken an oversight visit to Council for Geoscience, reports as follows:
The Portfolio Committee on Mineral Resources undertook a visit to assess if Council for Geosciences (CGS) has been able to fulfil its mandate in accordance with the Geoscience Act (100 of 1993) and also to assess if CGS’s performance is in accordance with its Strategic Plan.
2.1. Parliamentary Delegation
The delegation from the Portfolio Committee on Mineral Resources comprised of Mr MF Gona, - Leader of Delegation (ANC), Mr C Gololo ( ANC), Mr MR Sonto (ANC), Mr E Mtshali (ANC),Mr E J Marais (DA), Adv. Schmidt (DA)
Accompanying the committee was the Committee Secretary Miss Ayanda Boss, Committee Assistant Xolisa Mnyute and the Researcher Mr Sibongiseni Ngcobo
2.2. The Council for Geoscience
The Council for Geoscience was represent by Prof PE Ngoepe - Board Chairperson, Dr T Ramontja – Chief Executive Officer, Mr F Ramagwede – Executive Manager: Applied Geoscience, Dr G Graham – Executive Manager: Scientific Services, Dr P Zawada – Executive Manager: Regional Mapping, Mr L Matsepe, Chief Financial Officer, Ms Z Mkhize – Acting Executive Manager: Corporate Services, Mr M Monyepao – Business Development and Stakeholder Manager, Ms N Mdluli Jacha – Marketing and Communications Specialist, Mr M Lekotoko – Events Coordinator,
Ms R Shelembe – Scientist: Central Mapping.
Dr Ramontja briefed the Committee on the mandate of CGS, Budget and Financials, Thrust and Programmes and key challenges facing CGS.
The Geosciences Act (Act 100 of 1993) mandates the CGS to undertake systematic mapping, reconnaissance and documentation of the geology of the earth’s surface both onshore and off shore and undertake basic geosciences research on the nature and origin of rocks and the earth. The mandate allows CGS to render commercial geoscience services and products to national and international clients.
The mandate is being reviewed in terms of the Geoscience Amendment Bill, which will include:
Council for Geosciences took the following measures to reduce cost:
-Suspended recruitment in most areas
-CGS bursars were not employed in 2010
- Reduced training and capacity development significantly
- Cut the budget for the library from R3m to R0.9m
NB: It was reported that Mine Health and Safety Council has funded the CGS for R16 million on the pilot study on seismicity for 12 months. The agreement was not signed yet as CGS was given limited time.
The Executive Manager, Dr Zawada, briefed the Committee on the importance of Geological Mapping. The availability of detailed geological mapping has a direct impact on exploration investment, mineral discoveries, job and wealth creation. Many countries are investing heavily into upgrading their geological databases, especially in Africa, Canada, US and Australia. Canada invested $100m (ZAR 711m) for 5 years (2008-2013) to map its northern territories. Many World Bank and European Union (EU)-funded Mineral Sector Support Programs in Africa. It was mentioned that if a country wants to be competitive in attracting exploration investment, it must offer detailed geological data sets and maps.
Geological Mapping is not only about minerals but also the society interacts mainly at the most shallow levels of the earth’s crust – top 50 m at most to build houses and infrastructure, dispose waste, extract water, extract some resources (i.e. construction materials, sand and clay), and grow food. Rocks are highly variable in terms of mineralization trends, ability to carry water and other fluids. The relationship between geology and society becomes more involved as the communities and associated infrastructure become more complex.
Geological Mapping was undertaken from the 6 regional offices which are Bellville, Port Elizabeth, Upington, Pietermaritzburg, Polokwane and Pretoria. Geological maps in RSA are compiled at 1:1000 000, 1:250 000 and 1:50 000. The entire country has been mapped at 1:250 000 scale. The geological maps are the basis for engineering geology, geophysical interpretations and mineral exploration. Thematic regional compilation maps are also produced for example SADC geological map and Tectonic map of Africa. CGS has an excellent international reputation for its geological mapping.
South African offshore territories encompasses an area of some 1,54 million km² to the current 200 nautical mile Exclusive Economic Zone. The extend shelf claim may extend area to ̃1,9 million km². Currently, publically- available marine geological charts are available for <1 percent of the territorial water. The mainland has a coastline of some 3000 km extending from the Orange River in the west, on the border with Namibia to Ponta do Ouro in the east, adjacent to Mozambique. It was mentioned that 40% of South Africa’s population lives within 100 km of the coast. Many communities in and around the coastal settlements derived their only form of income from the marine environment including fishermen, recreational and commercial divers, dock workers and crew on ships and offshore mining industry.
It was concluded that geological mapping is a key data set for attracting exploration inflows into the country. The current map database for the country is inadequate for mineral sector and the increasing environmental land use and infrastructural requirements of the country. The CGS’s mapping programme is underfunded and is not able to provide enough relevant geological data for the country
8. Committee members were taken through the following sections:
Mr Odirile Dingoko briefed the committee on the high-resolution airborne magnetic and radiometric data acquisition of selected parts of South Africa that is critical for promotion of investment in mining. The aim of this programme is to identify mineral deposits that are available around the country. Phase 1 involves the identification of potential areas and Phase II involves ground based surveying. It was mentioned that it is quite dangerous when conducting these surveys and walking in the field is prohibited. Magnetic field is measured by aeroplane. One of the challenges of airborne surveys is that farmers tend to shoot the aeroplanes in their area.
Ms Mayshree Singh briefed the Committee that Seismology Unit is a key player in South African Seismology with core competencies in seismic monitoring and seismic hazard assessment. The earthquake occurred in the Western Cape (Ceres) in 1969 where 12 people were killed. She mentioned that a lot of work has been done for Eskom to build a new plant.
8.2.1. Mine Safety
It was reported that the reason for integration of the South African National Seismograph Network (SANSN) with Mining Networks was to improve location of earthquakes in the mining areas and dense network of monitoring stations.
8.2.2. Mine Flooding Induced Seismicity in the Central and East rand
It was reported that the largest two events associated with water ingress occurred during the months of June and July. Apart from mine acid drainage, problem is with water pollution.
8.2.3. Other Projects in Seismology Unit
The following challenges are facing the Seismology Unit:
9. Water Geosciences
It was reported that between two and three years water will reach the surface. If Grotvlei stops pumping, Nigel CBD will be flooded. 50 million litres are need for Nigel.
10. Mineral Resources Development
The mandate of Mineral resources Development unit is to promote Mineral Resources in South Africa. To date 20000 records/ entries were found. The information is used to promote small scale miners. Currently the unit is working with the Department of Mineral Resources to identify sites for rural development.
Potential Engineering Geoscience Unit contributions towards optimal rural development:
11. Environment Geoscience
It was reported that The Department of Mineral Resources contracted CGS to assist in the development of a strategic framework for sustainable development in the mineral sector in South Africa. The specific focus areas for the CGS were two fold i.e. the development of the concept of regional mining and closure strategies and the development of South Africa’s strategy for the Management of Derelict and Ownerless mines.
12. Development of a database on derelict and abandoned mines
The National Data base is based on CGS SAMINDABA (South African Mineral Deposits Database) database. Currently the database has approximately 6000 records. As part of the database management update and field verification of the data is required on a continuous basis. The aim of the ranking exercise is to identify priority sites for rehabilitation.
13. Development of a strategy for derelict and ownerless mines
To address the problems relating to derelict and ownerless mines, the Department of Mineral Resources has in cooperation with the Council for Geoscience, undertaken the development and implementation of a national strategy for the management of derelict and ownerless mines in South Africa.
13.1. The key components of this strategy are:
13.2. Schedule for rehabilitation
The key issues on determination of a schedule for rehabilitation are:
13.3. Acid Mine Drainage
It was indicated that Acid Mine Drainage is one of the most serious and potentially enduring environmental problems for the mining industry. If it is left unchecked it can result in such long term water quality impacts that could be the mining industry’s most harmful legacy. South Africa is facing a serious threat from Acid mine drainage associated with gold mines (Gauteng, Mpumalanga, Limpopo and Northwest), coal mines (Mpumalanga, Limpopo and KZN), base metal mines (Northern Cape, Mpumalanga, Northwest and Eastern Cape).
14. Geochemistry Laboratory Unit
This unit has 42 staff of which 20 are scientists. They identify minerals, determine composition of water, determine composition of a rock and analyse it. Once it has been determined they use it for mapping. 90 percent minerals are common in all places in the country.