The Portfolio Committee on Mineral Resources has noted challenges faced by small mining companies in North West, and has offered to facilitate efforts to find solutions.
The Committee visited three new small mines during an oversight visit to the province last week: Assen Iron Ore Mine, Bakubung Minerals and Maseye Mine.
“The issues facing small mines are complex and varied compared to long-established mines. Small miners are key for the growth of mining in the future and for the transformation of the industry,” said Mr Sahlulele Luzipo, the Chairperson of the Committee.
The Committee has welcomed the social labour plan projects implemented by the mines in the communities where they operate, even before they generate positive revenue.
The mines articulated their challenges as follows:
- Small mining companies are often not in real control of the operation of their mines for as long as five years. Banks and development finance institutions refuse to fund mines without collateral and rely on project financing. The financiers require board seats and decide on project issues. This means the black emerging miners are not true owners, despite holding the mining right granted by the Department of Mineral Resources (DMR).
- Farmers extorts high rental fees from emerging miners who hold mining rights, which is the case even for land they do not use for farming.
- Black economic empowerment (BEE) shareholders get diluted in their ownership when they fail to develop the mine. The dilution means smaller returns for the BEE partners.
The Committee has also heard how the DMR office in Rustenburg has assisted the new mines to comply with laws and regulations, thereby playing the role of coach and referee.
Mr Luzipo said the visit empowered the Committee to exercise effective oversight and undertook to follow-up on several specific issues when the Committee resumes its work in August.
Issued by Parliamentary Communication Services on behalf of the Chairperson of Portfolio Committee on Mineral Resources, Mr Sahlulele Luzipu