Date: 15/05/2003
Source: Ministry of Minerals and Energy
Title: Shabangu: Minerals and Energy Dept Budget Vote 2003/2004


BUDGET VOTE SPEECH BY THE DEPUTY MINISTER OF MINERALS AND ENERGY, SUSAN SHABANGU, National Assembly, 15 May 2003

Madame Speaker,
Deputy Speaker,
Chairperson of the NCOP
Deputy Chairperson of NCOP
Honourable members

INTRODUCTION

The financial year 2002/03 was a fruitful one for us in the mining and energy sectors. It is our intention to continue along the same path and ensure that our resources are utilised responsibly, to benefit all. I am going elaborate on some of the issues the Minister touched on, and also report on the performance of our associated institutions. Finally, I will outline some of our future plans.

Let me commence my address with a brief overview of our internal transformation highlights. Since 1994 to date the total personnel composition of the disadvantaged communities on the establishment of the Department has improved from 25% to 62%. During the same period black senior management improved from 0% to 62%. Female representation at both senior and middle management levels improved from 4% to 26%, whilst in total, female representation increased from 39% to 46%. However, disabled persons represent 1% of the total employees, but we have put a plan in place to achieve the target of 2% during 2005.

Implementation of Mining Summit Decisions

In promoting local fabrication of indigenous pieces of jewellery we were able, through a sponsorship by the industry, to import a Malian jewellery expert who trained and shared his skills with our young jewellers during the Mining Week. The fine jewellery pieces produced by these talented young South Africans are on display at the Gold of Africa Museum Workshop in Strand Street.

Small-scale mining

We have increased the annual funding allocation to support development of the small-scale mining sector from R5.1 million to R15 million for the 2003/04-budget year.

During the previous financial year there were 13 projects at different stages of development. These projects employed no less than 740 people. Most of them, 593, are women. A total of R6.8 million was spent in developing these projects. Of note are the strides that have been made at the brick-making project in KwaZulu-Natal. I am therefore very certain that during the month of June, I will be turning sod on a new site. Mine Rehabilitation

With regard to Environmental management, the Phepafatso strategy was launched. It is aimed at strengthening enforcement, supporting site inspections, assessing the state of compliance, identifying pollution hotspot areas, developing strategies to address water ingress into mines, and establishing an inter-departmental working group to determine specific environmental norms and standards for hotspot areas.

In order to improve the economic sustainability of Witwatersrand Gold Mines, my department in conjunction with the Council for Geoscience is developing a comprehensive strategy to address polluted underground water, which has been a problem for over 100 years. This strategy includes cost-effective preventative measures to reduce environmental impacts and also substantially lower gold mines costs in Gauteng. A work plan for the 2003/4 financial year, involving engineering interventions in the central and East-Rand mining basins is being finalized.

My department has spent R20 million during the previous year on the rehabilitation of abandoned mines. We spent R17 million on rehabilitating asbestos mines alone. Rehabilitation work has been done at old Voorspoed Asbestos Mine, Koegas, Ncweng, and Whitebank Complex in the Northern Cape.

With regard to coal mines, in the past year, my Department in co-operation with the Department of Water Affairs and Forestry and other government departments, has implemented urgent short-term rehabilitation measures at the burning Transvaal and Delagoa Bay (T&DB) Colliery near Witbank. These include:

* The construction of safety pathways over the T&DB site and access control; and
* The construction of a storm water diversion system to prevent storm water flowing through the site and becoming acidic.

Investigations regarding the methods of rehabilitating the T&DB Colliery were finalised. These methods included re-mining, blast and collapse, flooding and ashing. A "piece-meal" option, which includes a combination of the above methodologies, has been agreed to as the preferred rehabilitation option. Tenders are currently being approved for blast and collapse test work at the site. The rehabilitation work is focused on achieving a sustainable end land use on the site that includes small-scale community agriculture.

Performance of Mine Health and Safety

The industry's performance for 2002: the fatality rate was 0.74 and reportable injuries were 11.5 per 1000 employees. This was only slightly better than that of 2001 for which the corresponding fatality and injury rates are 0.78 and 12,34.

Against a backdrop of expansion in the gold, platinum and small mining areas, and particularly serious capacity problems in the platinum and small mining sector, these results reflect considerable effort on the part of the Inspectorate and certain industry stakeholders to halt deterioration in safety performance. In May 2002, 50 per cent deterioration in accidents rates was anticipated if poor performance could not be curbed. The inspectorate was compelled to take tough action, stopping work at shafts and in individual workplaces.

Review of the Mine Health and Safety Inspectorate (MHSI) and the mining industry

As the Minister has indicated, an independent review of the MHSI and the industry was commissioned to assess developments in health and safety since the Leon Commission and the promulgation of the Mine Health and Safety Act.

The review team comprised representatives of IMC (International Mining Consulting), an internationally respected UK-based group of mining consultants and Resolve, a South African consulting companying specialising in labour-related work.

The Review recommended that the Inspectorate consider a number of changes in structure and approach. Specifically, these involve establishing a policy unit, increasing the number of inspectors in the field, developing a more effective recruitment and staffing strategy, developing the outlook and expertise of inspectors, adopting a standardised approach to enforcement, and leading the tripartite system more effectively.

The Reviewers observed that the major reason for the overall improvement of the occupational safety results for the mining sector is the contraction of the gold mining sector. Furthermore, the reviewers concluded that gold and platinum mines, particularly the former, should implement more stringent measures to protect the health and safety of employees, given the high level of risk associated with them.

We intend to use the results of the review to take these steps to address the gaps in policy and implementation. This will include the following:

* Formalising training and induction for all staff in the Inspectorate
* Standardising enforcement policy,
* Seeking more stringent commitments from the gold and platinum sector on Heath and Safety Standards,
* Revising our approach to the tripartite system and
* Focusing on the elimination of heath hazards amongst other things.

Thank you to the stakeholders who cooperated with this review.

Occupational Disease Reporting

Reporting of occupational diseases in terms of the SAMODD database will become compulsory in 2003, and the annual occupational health report will be submitted at the end of the calendar year, in line with international norms. Mines currently submit reports at the end of their individual financial years. This will enable analysis of trends in respect of mining sub-sectors and assessment of the relative performance of mines and mining companies.

HIV/AIDS

HIV/AIDS is one of the priorities for this year. An HIV/AIDS Summit was held on 30 April 2003 at the Gallagher Estate. The Summit adopted a Declaration of Intent signed by employers, labour and government. The Declaration aims to ensure that, in the mining sector, HIV/AIDS programmes are co-ordinated and monitored, thus improving the use of resources and taking advantage of synergies wherever possible. It also commits every mine to developing a comprehensive policy and programme, consistent with the strategy of the Department of Health. These commitments include addressing TB and sexually-transmitted infections, encouraging openness, fighting stigmatisation, phasing out of single-sex hostels and introducing family housing.

In the Declaration, the stakeholders also acknowledged that:

* Prevention, treatment, care and support are mutually reinforcing elements and must be integrated in a comprehensive response to HIV/AIDS
* Nutrition is an essential component of HIV/AIDS prevention and management programmes
* Traditional healers have an important role to play in the comprehensive response to HIV/AIDS
* Government and the mining industry are already providing comprehensive programmes to combat Tuberculosis, Sexually Transmitted Infections and HIV/AIDS
* A number of mining companies recently introduced anti-retroviral drugs as part of their comprehensive HIV/AIDS programmes

Finally stakeholders agreed that the Tripartite HIV/AIDS Committee should transform the declaration into a plan of action with specific targets and timelines.

An example of a mining company initiative is a multi-stakeholder project in the North West and Limpopo provinces, where its operations are located. The Circle of Hope Community Project implements sustainable programmes that are focused on faith care and support for the infected and affected at project sites.

From our side, as a government department, we have also taken similar steps. Our interventions include, support and care for infected and affected employees and their families, provision of supplements for employees who have disclosed their status, home visits, hospital visits and referrals.

Nuclear Energy

The National Nuclear Regulator (NNR), working with the Mine Inspectorate, has ensured that workers' exposure to radon is below the legal dose limit through effective regulatory control. 40 mines are licensed by the NNR. The average dose to workers is below 10% of the dose limit. In 7 gold mines however there are concerns about higher levels of exposure to radon, which occurs naturally underground. This year we intend to complete all regulations required in terms of the NNR Act.

Recognising the needs for skills development in the nuclear field, this Department in partnership with the Department of Trade and Industry initiated an agreement between the South African nuclear sector role-players and a French Company AREVA. In terms of this agreement, AREVA will provide high-level training to South Africans in the nuclear sector. The first group of 25 South Africans will be trained in France during this financial year.

Renewable Energy (RE)

During this year, we will approve my Department's Renewable Energy Strategy and Implementation Plan. With the assistance of the World Bank and the Prototype Carbon Fund, we hope that early next year we will begin promoting renewable energy electricity generation.

The target is an additional 10 000 giga watt hours of energy consumed by 2013, which will be achieved through RE power generation and other sources such as bio-diesel, solar water heating, solar photovoltaic, and solar passive design in housing.

The Energy SETA is expected to develop renewable energy technology (including bio-diesel) and Education and Training Unit Standards with the help of my Department.

CEF is expected to install some 250 domestic solar water heaters as part of CEF/GEF solar water heating programme aimed at commercialisation of domestic solar water heating.

I will conclude with an overview of progress made by the DME's associated institutions

ASSOCIATED INSTITUTIONS

The institutions for which the DME is responsible continued to play a major role in their spheres of operations, both in South Africa and globally.

1. The South African Diamond Board

Besides the successful implementation of the Kimberly Process Certification Scheme, which the Minister has alluded to, we have seen the Board realising a positive cash flow. This was mainly due to improved relations with the Industry and adherence to corporate governance and sound financial controls. In order to continue being more efficient, the Board has also opened an office in Kimberly thus enabling it to service its clients in that area.

2. National Electricity Regulator

The NER is the regulatory authority over the electricity industry. Its role is to ensure that the industry is efficient and effective, and well placed to meet the needs of existing and future electricity customers.

During 2002 the NER adopted "Rate-of-Return" methodology as a tool to evaluate applications for annual price increases for 2003. No South African entity (Eskom included) has a right to unilaterally make changes in the electricity prices without first getting approval from NER.

For the year 2002 the NER was involved in 77 300 grid connections and an additional 1740 non-grid systems have been installed in rural areas where it is to expensive to supply customers with grid connection.

The Darling wind farm was licensed as a generator by the NER. This makes it the first Renewable Energy IPP in South Africa.

3. The South African Nuclear Energy Corporation of South Africa (NECSA)

Notable achievements and developments for NECSA during 2002/03 were that:

* The Nuclear Institutional Services and Technology Development of South Africa signed the Additional Protocol agreement with the International Atomic Energy Association in September 2002, as part of the international drive to strengthen controls over nuclear material. Subsequently, we submitted an expanded declaration on our nuclear facilities in March 2003
* In respect of export performance, Nuclear Technology Products, the division responsible for the radioisotope marketing and sales of NECSA, exported 86% of its sales of R131m to 40 countries on five continents
* NTP was the winner of the prestigious Technology Top 100 award in its category for 2002 and also received a special award from MTN for its role in successfully commercialising key domestic nuclear technology
* A chemical plant for the production of a specialised fluoromonometer used for state-of-the-art fluoropolymers was constructed and commissioned during the year
* A chemical plant for the production of an advanced fluorine-based gas for use in the global semi-conductor industry has been established and commissioned on the Pelindaba site.

Closing Remarks

As indicated earlier, the past year has been very fruitful. For this we need to applaud all DME employees at Head Office and the regions. Their commitment and dedication has been steadfast. My gratitude also goes to my family and friends without whom I would not have been able to bear this sometimes difficult and steep road.

To my colleagues in Parliament I say: "Ningadinwa Nangomso". The end of a decade, 10 years of freedom, is closing in. Comrades, let's rally together to show our people that we have delivered on their mandate. We, with our people behind us, can certainly deliver more successes, no matter how steep the road ahead.

Thank you.

Issued by Ministry of Minerals and Energy
15 May 2003