CHAPTER 3

GOVERNMENT REGULATION OF AND INVOLVEMENT/ INTERVENTION IN THE DIAMOND INDUSTRY IN COMPLIANCE WITH THE Minerals Act, 1991 (Act 50 OF 1991), AND RELATED MATTERS.

3.A          WRITTEN AND ORAL EVIDENCE RECEIVED BY THE COMMISSION

3.1          GRANTING OF PROSPECTING AND MINING RIGHTS AND THE ISSUING OF prospecting permitS AND mining authorisa-tionS FOR DIAMONDS

3.1.1       In submission 4, Mr H Jenner-Clark, an independent diamond exploration geologist, argues that the time required to grant prospecting rights and to issue prospecting permits for diamonds over State land seems unduly long and foreign investors find these delays inexplicable.

3.1.2           In oral evidence given before the Commission, Mr J J Daffue, who represented one of the diamond diggers’ committees in the North-West province, has expressed dissatisfaction regarding delays with the granting of mining rights for diamonds and the issuing of mining authorisations over State land – submission 14.

3.1.3           In regard to the administration of State-held mineral rights, De Beers, in submission 20, contends that the paucity of guidance in this regard which is given in the relevant provisions in the Minerals Act is a matter of concern.  The Company expresses the opinion that State governance should promote, not impede, the endeavours of private enterprise in regard to optimal exploitation of South Africa’s diamond resources and thus suggests the retention of the private mineral rights system and of the current system applicable to State-held mineral rights, but suggests, amongst others, that administrative procedures should be improved in regard to State-held mineral rights and in regard to the issuing of permits and authorisations.  In regard to the granting of prospecting and mining rights and the issuing of authorisations, the Company suggests that the procedure be integrated into one process insofar as State-held mineral rights are concerned.

3.1.4           According to De Beers measures to reduce or improve Government regulation by way of the existing system of authorisations to prospect and mine are aimed at promoting optimal exploitation and development of South Africa’s diamond resources in the best interests of the country and to enhance the local industry.  The Company is of the view that section 1 of the Minerals Act should be amended to exclude from the definition of “prospecting”, work connected with surface examination and observation, that section 6 of the Act be amended to provide an exemption from the need to furnish details in regard to rehabilitation where prospecting is done purely by sinking of boreholes or by trenching or pick-work, that section 10 of the Act be amended to authorise the issue of temporary authorisations to prospect or mine, even in the case of commencement with new prospecting or mining operations, and that in respect of State-held mineral rights, a new single-stage system of prospecting and mining grants, encompassing also the relevant authorisations, be implemented.

3.1.5           De Beers maintains that it is in the nature of diamond geology that reconnaissance investigations over large areas are necessary.  These operations have a minimal impact on the environment and the Company is accordingly of the view that the current provisions in the Minerals Act requiring the holding of prospecting permits and of approved environmental management programmes for even these preliminary operations, constitute worthless over-regulation by Government causing prospecting work for the discovery of new deposits to be delayed and, in consequence, resources to be diverted elsewhere.  Amendments to the Act to remove regulation of such operations are suggested in the interest of optimal exploration of potential diamond resources.

3.1.6           In submission 48, Itireleng Minerals and Energy Consultancy, representing certain groups of persons and communities in the North-West province, argues that mining authorisations be issued to members of the affected community, rather than to outsiders who have no or little interest in community development, that the application fees payable for mining permits and mining licences for diamonds should be reduced and made more affordable to the community diggers.  The prescribed fees presently payable are R50 for a mining permit and R100 for a mining licence.  The communities are also of the opinion that the periods for which mining permits are valid are too short and these periods should be made longer.  At the moment mining permits for two years are issued to the small-scale miners and the smaller mines, whilst mining licences are issued for periods longer than two years and even for unlimited periods to the larger mining concerns.  The communities also argue that their members are forced to travel long distances to the licencing authority, namely the office of the Director: Mineral Development in Klerksdorp.

3.1.7           Mr C N G Janse van Vuuren, chairperson of the Diggers Vigilance Committee in the Wolmaransstad area, maintains that procedures to grant prospecting and mining rights over State land must be streamlined, as some diamond diggers wait as long as five months for applications for mining rights and the issuing of mining authorisations to reach finality – submission 49.

3.1.8           In submission 52, Dr F J Kruger, who is a senior research officer at the Hugh Allsopp Laboratory, University of the Witwatersrand, appeals to Government to ensure that prospecting and exploration licences are easily obtainable from a one-stop shop to encourage small-scale operators, that mineral right holders be given the opportunity to derive the benefit of their ownership thereof and that the ownership of mineral rights and the right to prospect and explore for minerals be separated.

3.1.9           In submission 69, Mr M De V le Roux, who is a freelance consultant to small mining enterprises in the Northern Cape province, argues that the small diggers cannot afford to wait for six months while applications for digging rights and mining authorisations affecting State land, are processed.  The said person also suggests that mining authorisations to mine diamonds be issued to small-scale diggers operating as contractors for mineral or mining right holders.  In his opinion the present system discourages investment.

3.1.10       Mr J M van den Heever, a freelance geologist, in submission 76, suggests the reintroduction of the system of pegging of diamond claims to eliminate delays with the issuing of prospecting permits and mining authorisations.

3.1.11       De Beers in submission 23, supports the view that the holding by the State of diamond rights is contrary to optimal exploitation and development of South Africa’s diamond resources in the best interests of the country and in enhancement of the local industry.  The Company believes that the State’s inability to market its mineral rights effectively demonstrates the undesirability of ad hoc negotiations on the part of State officials, and points to the urgent need for standardised terms and conditions which take account of the fundamental needs of the diamond industry.  The Company suggests that the ideal would be for the Government to amend its policy to permit of alienation of the State’s diamond rights, thus converting such rights to being privately held ones, or to improve the administration of State held mineral rights.  The Company also suggests that standard forms of prospecting grants and mining grants for life of mine, as well as standard terms in regard to consideration (or royalties) payable to the State and mineral alienation be appended as forms to the Minerals Act .  A similar approach is suggested by Mr M De V le Roux for proposed prospecting and digging agreements for small-scale diamond diggers.

3.1.12       According to De Beers, in submission 20, the Department of Minerals and Energy, inter alia, in its administration of State-held mineral rights is chronically understaffed and is likely to remain so for the foreseeable future.  The Company, therefore, suggests that the Department should undertake an exercise to identify less important or unnecessary legislative and regulatory provisions which are disproportionately administration – intensive for repeal.

3.1.13       De Beers is of the view that the current position in terms of the Minerals Act, whereby prospecting contracts and mineral leases granted by the State are registered at Deeds Offices in terms of the Deeds Registries Act of 1937, has proved to be unworkable.  The Company supports a change to prospecting and mining grants and a reversion to the concept that rights of this nature be registrable again at the Mining Titles Office and not at Deeds Offices.

3.1.14       In order to remove uncertainties in regard to the validity of mineral leases granted by the State and consequently also of the mining authorisations issued on the strength of such grants, De Beers suggests that the State should comply with the notarial formalities prescribed by section 3 of the General Law Amendment Act of 1956.  Alternatively, the Company suggests that section 3 of the General Law Amendment Act of 1956 should be repealed.  Normally, the written consents to mine embodied in ministerial mining permissions granted over State-held mineral rights, would constitute leases of rights to minerals within the meaning of section 3 of the General Law Amendment Act of 1956 since they confer the right to mine for minerals for a period and for a consideration.  Furthermore, even though section 9(2) of the Minerals Act designates the Minister to act on behalf of the State in granting such mineral leases, the resultant lease, according to the Company, is not granted or acquired under the Minerals Act, but rather by virtue of the common law rights of the State as mineral right holder.  Nevertheless, the State grants ministerial mining permissions in underhand (non-notarial) form.

3.1.15       De Beers argues that prospecting contracts granted over State-held mineral rights should comply with the definition of prospecting contract in section 102 of the Deeds Registries Act of 1937, which contemplates that such contracts will confer not only the right to prospect but also an option either to purchase or lease the relevant mineral rights.  The Company, therefore, recommends that State prospecting contracts and prospecting grants should contain a legally enforceable option either to purchase or lease the mineral rights for life of mine, on pre-determined conditions and for pre-determined consideration, as would a prospecting contract negotiated in respect of privately held mineral rights.

3.1.16       The representations and suggestions in relation to apparent delays in the processing of applications for prospecting and mining rights, the issuing of prospecting permits and mining authorisations, as well as to the alienation of State-owned mineral rights and access to and ownership of mineral rights, were referred to the Department of Minerals and Energy and in submission 28(b) the Department alludes to the reality that total revision of policy and insistence for change from various quarters, make the application of the Minerals Act very difficult under present circumstances.  According to the Department it is quite understandable that people will not be satisfied with the current state of affairs, but the Department is of the view that the situation is expected to improve considerably once the new minerals policy has been formally adopted and new legislation been implemented accordingly.  The Department also mentions that it is doing everything possible to expedite the processing of applications within the current legal framework.

3.2          OWNERSHIP OF TAILINGS AND DEBRIS DUMPS

De Beers, in submission 20, argues that in the interests of exploitation and development of debris dumps, nothing should be done to jeopardise or sterilise ownership of such debris dumps.  The Company recommends that State regulation, involvement and intervention in regard to debris dumps should be reduced as the best means to ensure the exploitation and development of debris dumps in the best interests of the country and as the best measure to preserve and enhance the local industry.  The Company also suggests that the definition of holder in section 1(ix)(b) of the Minerals Act  should be amended to align it with the principles of the law of property applicable to abandonment and occupatio and that a new section be inserted in the Minerals Act , whereby tailings and other mine dumps are exempted and excluded from the ambit of and from all prohibitions in the legislation proposed by virtue of the National Heritage Act of 1999.  Alternatively, the National Heritage Act of 1999 should be amended to exclude and exempt tailings and other mine dumps from its ambit.

3.3          IMPROVED PROVISIONS RELATING TO THE MINING OF DIAMONDS OF NECESSITY MINED WITH OTHER MINERALS

De Beers, in submission 20, submits that the current statutory provisions in relation to mining of mixed minerals have undesirable consequences as far as optimal exploitation and development of diamonds are concerned, and should be amended to obviate this.  The Company submits that section 5(3) of the Minerals Act is highly undesirable in the context of diamonds.  For example, a person mining or allegedly mining for heavy minerals such as zircon or ilmenite on the beach or sea bed, or a person mining or allegedly mining for gold in alluvials on land, might not be able to do so without also mining diamonds found in association with the heavy minerals or gold.  However, once he has mined and disposed of the relevant diamonds, it is impossible for the holder of the rights to diamonds to place a value on the diamonds for purposes of the provisos to section 5(3) of the said Act, for the very reason that they have been disposed of and are no longer available for valuation.  The Company recommends that section 5(3) of the Act be amended to provide that the mining entity will have the election, and where diamonds are the “other mineral”, will be obliged to deliver to the holder of the rights to the other minerals such minerals as against payment of a pro rata share of mining costs as determined in terms of the common law and that the said section should refer to compensation, not for the relevant mineral, but for the relevant mineral right determined prior to mining, and to deal with the time or frequency of payment of such compensation.

3.4          REPEAL OF EXPROPRIATION POWERS OR CONVERSION THERE-OF TO A JUDICIAL FUNCTION

De Beers, in submission 20, has grave reservations in regard to State intervention by way of expropriation because expropriation, according to the Company, embodies the antithesis of security of tenure, certainty and stability, and as such is a disincentive to investment.  Especially in the case of the high-cost activity of prospecting, and the high capital cost of mining, it is a serious deterrent to a favourable investment decision.  Furthermore, when expropriation is an administrative prerogative it introduces, according to the Company, the risk of manipulation by unscrupulous entrepreneurs, subjective exercise of discretion and decision-making, and irregularities, or what, in mining parlance, was known as claim-jumping.  All of this amounts to a burden on the Minister of Minerals and Energy and is likely often to place him or her in invidious situations in having to perform what is in fact a judicial function.  The Company therefore, recommends repeal of the expropriation facility in section 24 of the Minerals Act, alternatively that if expropriation is to be retained, the decision to expropriate be taken by a mining and minerals court which is able more justly to achieve the aim of optimal exploitation and development.

3.5          INFORMATION IN REGARD TO PROSPECTING AND MINING

3.5.1           De Beers, in submission 20, is of the view that confidentiality of information in regard to diamond prospecting is in the best interests of optimal prospecting.  In order not to increase Government intervention in making public information the confidentiality of which is in the interest of the optimal exploitation and development of the country’s diamond resources in the best interests of the country and in furtherance of the enhancement of the South African industry, the Company recommends that section 19 of the Minerals Act be retained in accordance with its current wording.

3.5.2           In submission 38, Mr J R F Handley, representing Exploration Targets (Pty) Ltd, propounds the necessity for all mineral right holders to submit data and results on exploration work completed, resources identified, current status and viability of their mineral right holdings for inclusion into a national data base.  He also urges that a combined central register of land/mineral rights and exploration/mining data be developed or that the existing data bases of the various Deeds Offices, the offices of the Surveyor General, the Department of Minerals and Energy and the Council for Geoscience be upgraded.  Mr G Levin, a consulting geologist, in oral evidence before the Commission also requested that information on mineral rights which are to be found at the deeds offices in various parts of the country, be centralised and that information on passed prospecting results be made available to the general public – submission 54.

3.5.3           Exploration Targets (Pty) Ltd also proposes that cadastral plans indicating mineral right holdings be prepared and compiled by the offices of the Surveyor General.

3.5.4           Itireleng Minerals and Energy Consultancy, in submission 48, proposes that geological investigations should be conducted into the possible occurrence of diamondiferous alluvial gravels and diamond deposits which may still be exposed on the old alluvial diggings where communities are presently residing.

3.6          ENVIRONMENTAL MANAGEMENT IN THE MINING AND MINE-RALS INDUSTRY

3.6.1.         De Beers, in submission 20, supports the principle of sound environmental management during and after prospecting and mining.  However, the Company submits that efficiency in the issuing of prospecting permits and mining authorisations should not be impeded where no real threat to the environment exists.  The Company suggests that section 39 of the Minerals Act should be amended to provide an exemption from the need to furnish an environmental management programme where investigatory activities are carried out purely by surface observations, sinking of boreholes or trenching or pick-work.  In oral evidence before the Commission, Mr G Levin also urged that the requirements for environmental management control during prospecting operations be relaxed – submission 54.

3.6.2.         De Beers suggests that a policy in regard to environmental management should be developed for small-scale mining operations, which policy should not impose standards which differ from those applicable for large scale mining operations, since any such differentiation would result in the undesirable effects experienced in many older small-scale alluvial mining operations around the country.  Nor should it rely on the subsidising from funds derived from larger scale operations, of environmental management of small-scale operations.

3.6.3.         De Beers submits that because minerals are area-bound so that questions of alternative sites and no-go options do not arise, the matter of environmental management of prospecting and mining operations should remain to be treated as sector-specific and as a special case.  Furthermore, according to the Company, the only right which a mineral right holder has is to prospect and mine and it therefore believes that environmental management of prospecting and mining operations should remain governed by the Minerals Act and not by the Environment Conservation Act of 1989, that the lead agency for administration thereof should remain the Department of Minerals and Energy and should not become the Department of Environment Affairs, and that mining should in the interests of the economy of the country remain a preferent and predominant use.  The Company submits that where the State is of the view that mining should not occur at a particular place at all, this should not be regulated by refusal to grant a mining authorisation or by refusal of approval of environmental management programmes, but rather by the State acquiring the relevant mineral rights with the consequent payment of compensation to the expropriatee.  Any other procedure would result in sterilisation of the minerals concerned, which would offend against the object of optimal exploitation of the mineral resources of the country as reflected in the Minerals Act and a negation of the right of the holder of mineral rights to mine, the non-payment of compensation in regard to which would, the Company submits, contravene section 25 of the Constitution of the Republic of South Africa, 1996, as being tantamount to an expropriation without compensation.  For the above reasons also, the Company is opposed to the identification in terms of section 21 of the Environment Conservation Act of 1989 of prospecting, mining and related activities as activities which may have a substantial detrimental effect on the environment, the intention to do which was notified in Government Notice 846 of 1997 dated 30 May 1997.

3.6.4.         In oral evidence given before the Commission by Mr J J Daffue, it is intimated that the quantum of financial provision for the rehabilitation of the surface of land disturbed as a result of diamond digging operations, by virtue of bank guarantees, varies from relatively small amounts to much larger amounts, which is totally unacceptable to the diggers – submission 14.  He suggests that the quantum of financial provision be fixed at the smaller amount, as rehabilitation is normally done simultaneously with and as an integral part of the digging operations.  He also contends that the requirements for pecuniary provision laid down by the Director: Mineral Development in the North West region differ from those laid down by his counterpart in the Northern Cape region.  In submission 49, Mr C N G Janse van Vuuren also addresses similar difficulties regarding pecuniary provision for surface disturbances as a result of digging operations.

3.6.5.         In submission 36, Earthlife Africa, which is a volunteer community based organisation, articulate that the mining industry has the duty to minimise environmental damage and that diamond exploration must be based as an approach that plans around and conserves a finite resource base paying attention to rehabilitation, including groundwater supplies.  The organisation is also of the opinion that the diamond mines have a duty to integrate social and economic sustainability into their economic planning so that mine staff are adequately catered for should mines be faced with closure.  The organisation also believes that existing diamond mines should be stringently controlled so that they are, amongst others, based on an environmental ethic and not economic imperatives alone and totally transparent with respect to potential and real impacts and open to public scrutiny and review.

3.6.6.         In submission 48, Itireleng Minerals and Energy Consultancy insists that the Department of Minerals and Energy should take full responsibility for the restoration and rehabilitation of the surface of land disturbed as a result of past diamond digging operations, because communities using or occupying these areas are finding it difficult to utilise these areas productively.

3.7          RIGHT TO CERTAIN DIAMONDS AND USE OF CERTAIN LAND DEEMED TO VEST IN THE STATE

De Beers, in submission 20, submits that section 46 of the Minerals Act which deals only with previously proclaimed alluvial diamond diggings, deems not only the right to diamonds in alluvial, but indeed the rights to all diamonds to vest in the State.  The Company recommends that as a measure to achieve optimal exploitation and development of the country’s diamond resources deemed to vest in the State on these former alluvial diggings in the best interests of the country and in enhancement of the local industry, Government regulation of non-alluvial diamonds, should be removed and the said section 46 of the Act should be amended to provide that it is only rights to diamonds in alluvial which are deemed to vest in the State.  This will have the result that the rights of the common law holders of rights to non-alluvial diamonds will automatically revive.

3.8          APPEAL PROCEDURES TO BE IMPROVED AND TO BECOME A JUDICIAL FUNCTION

De Beers, in submission 20, maintains that efficient dispute resolution is an internationally recognised requirement in achievement of optimal exploitation and development of mineral resources.  The Company, therefore, makes suggestions on improvement of the appeal provisions as they currently exist in the Minerals Act, inter alia, in regard to elimination of locus standi of third parties, procedures in regard to pleadings and time limits, and a suggestion that consideration be given to the establishment of a mining and minerals court.  In order to avoid the conferring of locus standi as appellants on persons who may have no right or interest in regard to the decision in question, the Company suggests that this provision, which is drafted in a rather general manner, must be amended to specify that it applies not in regard to any aggrieved person but only to a person who is the applicant in respect of the relevant decision.  This would avoid the situation with which the Company was faced where another company which was clearly not a party to an application for a mining authorisation and had no right itself to apply for a mining authorisation, lodged an appeal with the Director-General: Minerals and Energy in terms of section 57(1) of the Minerals Act, notwithstanding that in a Court application which preceded the appeal, the Court had already indicated that the other company was not a competent applicant for a mining authorisation.  The Company recommends that section 57 of the Act be amended to be more specific in regard to the identity of a competent appellant, appeal procedures and time limits and also that consideration be given to the establishment of a mining and minerals court.

3.9          REPEAL OF POWER TO MAKE REGULATIONS DEALING WITH BENEFICIATION AND MARKETING OF DIAMONDS

De Beers, in submission 20, submits that State coercion in the regulation of mineral beneficiation and marketing is an outmoded concept and potentially harmful to optimal exploitation and development and contrary to enhancement of the South African mining industry, and advocates repeal of any coercive power of the Minister of Minerals and Energy in the Minerals Act to make regulations dealing with these topics.  Unlimited scope for State intervention in the sale by a miner of the product of his labours, according to the Company, is not a normal feature of mining legislation in other countries.  The Company, therefore, recommends that section 63 of the Act be amended to make it clear that although the Minister is empowered to make regulations in regard to possession of and dealing in diamonds as currently regulated in the Diamonds Act, the regulations do not empower him to regulate beneficiation and marketing in an ad hoc or coercive fashion.

3.10        SECURITY OF TENURE IN THE DEVELOPMENT OF MINES

Exploration Targets (Pty) Ltd, in submission 38, contends that security of tenure of mineral rights is a key issue in mining.  The Company alleges that the exploitation process requires capital investment, the value of which is dependent on security of tenure and that continued exploitation depends on the ability of the owner to maintain, expand or to sell his rights provided other controls are met.  Thus, according to the Company, the continuity of mining and all the benefits its bestows to the people, depends largely on security of tenure of mineral rights.

3.11        ACCESS TO MINERAL RIGHTS AND MINERAL DEPOSITS

3.11.1       Various persons who appeared before the Commission devoted their evidence to the current arrangements in respect of mineral rights and those who expressed views against the existing system argue that it suppresses exploration activities, that the complex and fragmented mineral right holdings militate against new investment because investors encounter difficulty and cost in identifying mineral right holders and obtaining mineral rights, that it is inaccessible to small-scale miners and also limits equal and equitable access to mineral rights and resources.  The following submissions were received in relation to this matter.

3.11.2       De Beers, in submission 20, advocates the retention of the private mineral right system, since mineral rights constitute real rights in property and are hence based in the law of property, they provide the best form of security of tenure to enable the diamond right holder to prospect and to mine and to alienate diamond rights.  This, according to the Company, makes for good access to diamond rights, and also due to the option customarily contained in prospecting contracts, provides the best form of continuity of tenure from the prospecting to the mining phase.  Such security and continuity of tenure are internationally recognised investment criteria for prospecting and mining operations, and hence the private mineral right system constitutes the best system to achieve optimal exploitation and development of the country’s diamond resources in the best interest of the country.  The Company is of the view that the private diamond right system provides ample access to all such rights and it supports the existing South African hybrid system of privately held rights, together with the licencing mechanism applied in the Minerals Act.

3.11.3       In the opinion of Exploration Targets (Pty) Ltd, in submission 38, one of the defects of the South African mineral rights system is that mineral rights have become fractionated through inheritance and that this situation creates extreme problems for the smaller companies and individuals who cannot afford the cost of trying to trace and enter into agreements with the various co-holders of mineral rights.  In the opinion of the Company the mining houses with their large legal and estate departments find it irksome to acquire mineral rights but if the desire to obtain the right is sufficiently motivated, they normally succeed.  However, success is attained only after frustrating delays and great cost.

3.11.4       Mr T Mfazwe, who represents the Congress of South African Diamond Mines, requests that land and mineral rights should be made available to small-scale miners by the Government to enable them to prospect for and to mine diamonds – submission 13.  A similar request for land containing diamondiferous gravels to be made accessible to small-scale miners was made by Mr G Myburgh of Kimberley - submission 59.  Mr T Da S Pikwane, President of the African United Small Mining Association, in submission 6, strongly petitions for additional land to be made available to the small-scale diamond diggers.

3.11.5       Mr J J Daffue, in oral evidence before the Commission, appealed for easier access to be rendered to the diggers of land and mineral rights for the purposes of diamond digging on the formerly proclaimed alluvial diggings – submission 14.  Mr J M van den Heever, in submission 76, also maintains that access to diamond claims should be facilitated.

3.11.6       Mr M S Mpyane and his group of companies, in submission 50, require information on mineral rights and mineral deposits in the districts of Warmbaths and Cullinan that may be made available for diamond exploitation by small-scale mining concerns.

3.11.7       Dr F J Kruger, in submission 52, advocates for legislation to be introduced which will open access to mineral rights, as well as for the establishment of a South African minerals corporation which may function as a one-stop shop for providing information on mineral rights.

3.11.8       Mr G Levin, in oral evidence before the Commission, called for a change in the mineral rights system as the present system is a barrier to entry against potential investors – submission 54.

3.11.9       Mr R S Meyer of Devon suggests that the previous legal system according to which land containing alluvial diamondiferous gravels, was proclaimed as public diggings and the pegging of claims allowed, should be re-introduced in order for persons to gain access to diamond rights – submission 57.

3.11.10         Mr M K Narib, in submission 60, contends that small-scale miners experience great difficulty in gaining access to mineral rights and deposits and this issue should be addressed as a matter of urgency.  Mr I Plaatjies, in submission 64, touches upon the same subject and requests that information on the availability of mineral rights and diamond deposits should be disclosed to small-scale miners.

3.11.11         According to Mr M De V le Roux, the right to diamonds in respect of large tracts of land in the Northern Cape province vests in the State and the small-scale diggers should be afforded the opportunity to exploit the diamondiferous gravels and deposits thereon.  The diggers experience difficulties in gaining access to these State-owned diamond rights and maintain that the present procedures to gain access to State-owned diamond rights are inappropriate – submission 69.

3.11.12         Mr G Wessels, a diamond digger operating in the districts of Bloemhof and Wolmaransstad, in submission 79, submits that the owner of a certain property, who is also the holder of an undivided share in the mineral rights, is demanding unreasonable terms and conditions in terms of compensation, which cannot be met by the other co-holder of the mineral rights who intends to conduct diamond digging operations.  The Director: Mineral Development for the relevant region also insists that the consent of the other owner/co-holder of the mineral rights be obtained.

3.11.13         In submission 34, the Diamond Workers’ Union claims that ownership of mineral rights in most countries vests in the State and that the international trend is towards public ownership of mineral rights.  The Union believes that the country’s bountiful mineral endowments need to be exploited to the benefit of the entire community which, according to the Union, is not being done at present, and that legislation be introduced vesting mineral rights in the State.

3.12        HOARDING OF MINERAL RIGHTS AND PROSPECTING AND MINING RIGHTS

3.12.1       Critics of the existing system of private ownership of mineral rights maintain that the system allows hoarding of mineral rights and is a barrier to entry against potential investors.  The under-mentioned representations and suggestions with reference to the hoarding of mineral rights were submitted to the Commission.

3.12.2       Mr M S Mpyane believes that mining companies are holding on to their mineral rights, which suppresses opportunities for small-scale miners to mine diamond deposits – submission 50.

3.12.3       Mr G Craythorne of Marine Alluvial CC, in submission 55, alleges that diamond concessions were granted on the West Coast to parties who have no direct involvement in the diamond industry and who, in fact, make no material contribution to the development of this national asset, have primary interests which are completely remote from the diamond industry and who are domiciled in other provinces.

3.12.4       Mr I M K Reich of Welkom, in submission 67, expresses the opinion that all existing diamond mining areas and residue dumps which are not being worked, should be revoked.

3.12.5       Ms L J Konrad, Vice President of Werner Offshore Inc., Vero Beach, United States of America, affirms that in order for the South African Government to reap the benefits from offshore diamond mining, concession holders who have held concessions for two years or longer, but have not conducted any prospecting work should be investigated.  Companies with substantial budgets and better technology should be allowed to develop unused concessions – submission 77.

3.13        USE OF THE SURFACE OF LAND FOR PROSPECTING AND MINING PURPOSES

3.13.1       De Beers, in submission 20, supports the retention of the right of the diamond right holder, prospector or miner to use the surface of land for prospecting or mining purposes or purposes ancillary thereto, in accordance with the statutory re-statement in the Minerals Act of the common law.  The Company recommends that in the interests of optimal exploitation and development of the country’s diamond resources, the predominance of surface use for prospecting and mining should be retained.

3.13.2       In submission 78, Mr F H Wessels, a diamond digger operating in the districts of Bloemhof and Wolmaransstad, discloses that certain freehold owners of land which previously constituted proclaimed alluvial diamond diggings, in respect of which the provisions of section 46 of the Minerals Act apply, insist that written agreements be concluded covering a very limited period, payment for the right to use borehole water, rehabilitation, etc.  The diggers are of the opinion that they are not obliged to enter into agreements with such freehold owners.

3.13.3       Earthlife Africa, in submission 36, alleges that communities, most prominently in rural areas, have expressed their belief that the present system whereby mineral rights take precedence over land rights is inequitable and unjust.  Similarly, rural communities have been calling for land rights to be established in concert with mineral rights and that their rights are legally established before prospecting activities are even considered.  The organisation believes that the voices of the marginalised needs should be heard on these issues.

3.13.4       Dr F J Kruger, in submission 52, makes a plea for the development of a mineral rights system which allows for addressing the diverse claims of tribes and those individuals deprived of their rights in the past.

3.14        COMPETING APPLICATIONS FOR PROSPECTING CONTRACTS AND MINERAL LEASES

3.14.1       De Beers, in submission 20, contends that situations are beginning to emerge whereby a later applicant for prospecting or mining rights attempts to outbid an earlier applicant, giving rise to scope for subjective decision-making and irregularities.  This would be eliminated if grants were made to the first qualifying applicant.

3.14.2       Mr I Plaatjies of Barkly West, in submission 64, voiced the opinion that in respect of competing applications for mining rights for diamonds covering the same area, especially in the district of Barkly West, the local small-scale miners in the area should also be given the opportunity to acquire such mining rights.

3.15        ACCESS TO OWNERSHIP AND MANAGEMENT OF THE MINING INDUSTRY

3.15.1       Mr M S Mpyane, in submission 50, advocates that opportunities should be given to Black persons and investors to be introduced into the diamond industry.

3.15.2       Mr R S Meyer, in submission 57, points out that Government’s reconstruction and development programme will be met if the process of empowerment is permitted at grassroots level, that is persons previously excluded from participating in the mining industry as a result of past racial inequities and that they should be given the opportunity to gain access to diamond resources or should benefit from the exploitation thereof.

3.15.3       Mr I M K Reich, in submission 67, suggests that small diamond mining areas, particularly alluvial and shallow deposits, should be re-allocated to certificated metalliferous mine managers, especially retrenched persons, with the proviso that the mining areas should be personally managed by such persons.

3.16        HUMAN RESOURCE DEVELOPMENT IN THE MINING AND MINERALS INDUSTRY

3.16.1       Mr T Mfazwe, in submission 13, requests that Government should pay subsidies to diamond producers and that the cost in connection with the training of small-scale miners should be incurred by the State.

3.16.2       According to Itireleng Minerals and Energy Consultancy there is a need for capacity building and education for community members engaged in diamond mining and on other issues affecting the diamond industry, such as sales and marketing – submission 48.  It is also argued that there is a need for governmental support and assistance with the acquisition of funds, machinery and equipment to make their mining projects economically viable.

3.16.3       Mr M S Mpyane, in submission 50, requests that education and training facilities should be provided for persons involved in the diamond industry and that Government should sponsor those who lack funds.  Mr M K Narib of Kimberley, in submission 60, also makes a plea for education and training for those involved in the diamond industry.

3.17        VALUE-ADDED TAX AND REGISTRATION AS A VENDOR

                De Beers, in submission 20, argues that the Department of Minerals and Energy should register as a vendor for purposes of value-added tax to facilitate the grant of prospecting and mining rights over State-held mineral rights.  Unnecessary work, according to the Company, is necessitated in regard to calculation of transfer duty in terms of the Transfer Duty Act of 1949 where in any event the lessee is entitled to recover the duty by way of an input credit for value-added tax purposes, due to the definition of input tax in section 1(xxix)(b) of the Value-added Tax Act of 1991.  The Company is of the opinion that all this work can be avoided if the Department were registered as a vendor resulting in value-added tax being payable with a corresponding exemption from transfer duty in terms of section 9(15) of the Transfer Duty Act of 1949, and with the corresponding right to an input credit for value-added tax purposes by virtue of the above-mentioned definition of input tax.

3.18        GENERAL

3.18.1       Itireleng Minerals and Energy Consultancy – in submission 48 – proposes that foreign investors should be encouraged to invest in diamond mining in areas where communities are residing in order to assist with job creation and local economic development and that taxes and levies to be collected should be used for the development of those specific communities where mining is going to take place.

3.18.2       According to Mr C N G Janse van Vuuren, thousands of rands have been paid by the Diggers Vigilance Committee in the Wolmaransstad area on legal expenses to protect the former proclaimed alluvial diamond diggings against the occupation by illegal diamond diggers and an appeal is made for the State to pay for these costs – submission 49.

3.18.3       Mr V H Mdleleni, representing Gakah Marketing CC, in submission 42, refutes allegations which were made that his mining concern is dominating diamond mining in the Delportshoop area in the district of Barkly-West and an assertion regarding the relationship between members of his concern and the mayor of Delportshoop.

3.18.4       Mr M K Narib, in submission 60, has drawn the Commission’s attention to the internal strife within the African United Small Mining Association.

3.18.5       Mr I Plaatjies, in submission 64, alleges that the diamond diggers conducting mining operations at Canteen Kopje east of Barkly West, which is a cultural and historical site, are violating the provisions of the National Monuments Act of 1969.

3.18.6       Mr J M van den Heever, in submission 76, advocates that discoverers of diamondiferous gravels and diamonds should be rewarded by granting them a certain number of claims.

3.18.7       Mr J M van den Heever contends that large sums of money are needed to commence diamond mining on an economic scale and in view of the complexity of the present regulations of the Johannesburg Stock Exchange, it is impossible for new small-scale mining ventures to raise funds.

3.18.8       Mr J M van den Heever, emphasizes that no mining concern can mine without water and that mines should be able to have access to the nearest water available, alternatively, be allowed to drill for water.

3.B          ISSUES ALREADY ATTENDED TO

3.19        GRANTING OF PROSPECTING AND MINING RIGHTS AND THE ISSUING OF PROSPECTING PERMITS AND MINING AUTHORISA-TIONS FOR DIAMONDS

3.19.1     In connection with the criticism relating to delays in granting of prospecting and mining rights over State land and the issuing of prospecting permits and mining authorisations, regional directorates are continuously encouraged to ensure that the legal and administrative procedures to be conducted and followed are facilitated and appropriate directives and guidelines to speed up procedures for the granting of rights and the issuing of authorisations were recently introduced and implemented.  The turnaround-time which has been approved by the Minister for the approval of applications for prospecting and mining rights is four months.

3.19.2     With reference to suggestions that administrative procedures be improved in regard to the granting of prospecting and mining rights over State-held mineral rights, it is to be pointed out that in terms of the proposed legislative proposals for the introduction of a new system of access to all mineral rights, provision will be made for predetermined standard terms and conditions for all prospecting and mining licences and the reduction, as far as possible, of discretionary powers by applying standard requirements or objective criteria – vide section 1.3.6.2 of Chapter 1 of the White Paper.  Also, as stated in section 6.1.4 of Chapter 1 of the White Paper, it is Government’s policy in terms of governance that the structure of the Department of Minerals and Energy will, amongst others, provide for separate intradepartmental components and mechanisms to handle mineral resource management and the promotion of the industry, mineral resources administration, a separate structure within the regulatory component to control environmental management in the mining industry, the improvement of administrative procedures in respect of the granting of prospecting and mining rights and the provision of a cost-effective “one-stop shop” information and advice service to the minerals industry.

3.19.3     According to section 1.4.4.3 of Chapter 1 of the White Paper dealing with the regulation and administration of small-scale mining projects, the Department of Minerals and Energy, in conjunction with other relevant Government departments, is to streamline the regulatory and administrative procedures in respect of mineral exploration and exploitation.  Reversion to the previous system of proclamation of alluvial diamond diggings and the pegging of precious stones claims is not envisaged.

3.19.4     Although De Beers has clearly expressed its preference for the retention of the concept of private ownership of mineral rights, Government recognises the State as custodian of the nation’s mineral resources for the benefit of all and will take reasonable legislative and other measures to foster conditions conducive to mining which will enable entrepreneurs to gain access to mineral resources on an equitable basis and will bring about changes in the current system of mineral rights ownership with as little disruption to the mining industry as possible – vide section 1.3.2 of Chapter 1 of the White Paper.  Government does not accept the country’s current system of dual State and private ownership of mineral rights.  On the contrary, Government’s long-term objective is for all mineral rights to vest in the State and a new system for granting access to mineral rights will apply in terms of which the right to prospect and to mine for all minerals will vest in the State.  Detailed legislative proposals for the introduction of this new system will be introduced – vide section 1.3.6 of Chapter 1 of the White Paper.

3.19.5     No amendments to the Minerals Act are currently contemplated as it is envisaged that the said Act in its entirety will be repealed in accordance with the Government’s policy objectives set forth in the White Paper.  The proposals by De Beers with regard to the possible amendments of sections 1(xxix) (definition of prospecting), 6 (the need to furnish details in regard to rehabilitation where prospecting is done purely by sinking of boreholes, etc) and 10 (to authorise the issuing of temporary authorisations to prospect or mine, even in the case of commencement with new prospecting or mining operations) of the said Act, and in respect of State-held mineral rights that a new single-stage system of prospecting and mining grants, encompassing also the relevant authorisations, be implemented, were forwarded to the Drafting Committee on the New Mineral Legislation, for consideration.

3.19.6     As explained above, no amendments to the Minerals Act are contemplated at this point in time.  In response to a suggestion by De Beers that amendments be made to the Minerals Act to remove regulation of reconnaissance investigations, it must be pointed out that Government’s policy is that a non-exclusive permission for broad-based, non-destructive exploration, such as reconnaissance work, will be implemented.  Such permissions will be for a limited period in respect of the area required.  A reconnaissance permission will not entitle the holder thereof to a prospecting or mining licence – vide section 1.3.6.2 of Chapter 1 of the White Paper.

3.19.7     In an attempt to expedite applications for prospecting and mining rights respecting State-owned land, the Minister of Minerals and Energy has recently delegated the authority in relation to the granting of such rights in terms of sections 6(3), 8(2) and 9(2) of the Minerals Act to the Director General: Minerals and Energy and standard types of agreements were drawn up to be used by Directors: Mineral Development, specifically in cases where agreements are to be concluded with small-scale mining entrepreneurs, as well as in cases where medium to large scale exploration and mining operations are envisaged.  The terms and conditions of these agreements are more or less in line with the suggestions made by De Beers and Mr M De V le Roux.  The turnaround-time for the legal formalities and procedures to be concluded, is confined to 4 months.  It is fully realised that time is often of the essence in exploration and the development of new mining ventures and it is for this reason that the Department has created these mechanisms to expedite the granting of prospecting and mining rights on equitable terms.

3.19.8     In order to eliminate possible disputes with mineral right holders refusing to negotiate the granting of prospecting or mining rights, the new mining legislation to be implemented, will make provision for the granting of prospecting and mining licences to applicants without the consent of those holders of prospecting, mining or mineral rights who have not already been licenced in terms of the new legislation – vide section 1.3.6.2 of Chapter 1 of the White Paper.  Prospecting fees or royalties on the removal of minerals will be determined by the State after consultation with any registered mineral right holder.  Issuing of prospecting and mining licences to contractors is not envisaged.

3.19.9     De Beers places emphasis on the State’s apparent failure to effectively market its own mineral rights and appeals to Government to allow the alienation of State-owned diamond rights.  As previously explained, Government does not accept South Africa’s current system of dual State and private ownership of mineral rights and its long-term object is indeed for all mineral right to vest in the State.  State-owned mineral rights will not be alienated and in terms of the new legal system to be implemented for granting access to mineral rights, the right to prospect and mine for minerals will vest in the State, which concept is to be embodied in legislative proposals to be drafted – vide section 1.3.6 of Chapter 1 of the White Paper.

3.19.10      The need to compile new guidelines and directives dealing with the granting of prospecting and mining rights in respect of State-held mineral rights and State land was identified some time ago and as mentioned above, standard types of permissions for prospecting and mining, and a notarial prospecting contract, with an option to acquire a mineral lease, were drafted for implementation in regional offices, after completion of a consultative process involving the various role players.  It may be accepted that the last-mentioned type of notarial prospecting contract will comply with the definition of prospecting contract in section 102 of the Deeds Registries Act of 1937, as suggested by De Beers.

3.19.11      With reference to the arguments adduced by Itireleng Minerals and Energy Consulting, in submission 48, in support of the viewpoint that mining authorisations be issued to members of a particular community only, it is to be mentioned that Government recognises the State as custodian of the nation’s mineral resources for the benefit of all and its intention is to take reasonable legislative and other measures to foster conditions conducive to mining which will enable entrepreneurs to gain access to mineral resources on an equitable basis –vide section 1.3.2 of Chapter 1 of the White Paper.

3.20        OWNERSHIP OF TAILINGS AND DEBRIS DUMPS

With reference to the recommendations made by De Beers regarding the ownership of debris dumps and suggestions that section 1(ix)(b) of the Minerals Act be amended to align it with the principles of the law of property applicable to abandonment and occupatio, it must be reiterated that no amendments to the aforementioned Act are contemplated.  The proposal has been referred to the Drafting Committee on the New Mineral Legislation, for consideration.  The National Heritage Act of 1999, which was assented to by the President on 28 April 1999, must still come into operation.  In terms of section 28(1)(c) of the said Act the South African Heritage Resources Agency may, with the consent of the owner of an area, by notice in the Government Gazette designate as a protected area such area of land covered by a mine dump, and in terms of section 28(4) of the aforementioned Act the Agency must, with regard to an area of land covered by a mine dump, make regulations providing for the protection of such areas as are deemed to be of national importance, in consultation with the owner, the Minister of Minerals and Energy and interested and affected parties within the mining community.  It is thus obvious that before an area on which a tailings or debris dump is situated, may be designated as a protected area, some magnitude of consultation will have to take place.

3.21        IMPROVED PROVISIONS RELATING TO THE MINING OF DIAMONDS OF NECESSITY MINED WITH OTHER MINERALS

It has been suggested and argued by De Beers that section 5(3) of the Minerals Act , which deals with the mining of mixed minerals, is highly undesirable in the context of diamonds.  No amendments to the Minerals Act are contemplated and the Company’s recommendation that section 5(3) of the Act be amended, was referred to the Drafting Committee on the New Mineral Legislation, for consideration.

3.22        REPEAL OF EXPROPRIATION POWERS OR CONVERSION THERE-OF TO A JUDICIAL FUNCTION

With regard to the suggestion by De Beers that the expropriation facility in section 24 of the Minerals Act be repealed or that a mining and minerals court be established to decide on issues relating to expropriation, the Company’s proposal has been referred to the Drafting Committee on the New Mineral Legislation to examine the merits thereof for consideration

3.23        INFORMATION IN REGARD TO PROSPECTING AND MINING

3.23.1     In relation to the disclosure of prospecting information, De Beers favours the concept of private ownership of prospecting data and advocates the retention of section 19 of the Minerals Act in accordance with its current wording.  Government on the other hand, has declared its intention – as stated in section 1.3.6.5 of Chapter 1 of the White Paper – that it will be a condition of any prospecting licence or reconnaissance permission to be issued in terms of the new intended mineral legislation, that all information and data from prospecting shall be submitted to the State after completion or abandonment of any particular prospecting activity.  The State will release such information to the public at any time from the date of submission of such information, unless the prospector retains a prospecting retention or mining licence in respect of the land concerned or an application therefor is pending.  Such information submitted to the State will be used to create a national exploration data base.

3.23.2     Through the Departments of Land Affairs and Minerals and Energy, Government is currently pursuing options to obtain the additional resources which will be necessary in order to compile a readily accessible data base of mineral rights holdings.  In addition, prospecting information and data submitted to the State will also be used to create a national exploration data base – vide sections 1.3.6.4 and 1.3.6.5 of Chapter 1 of the White Paper.  This is a formidable task and a team of specialists would have to be trained to do the work systematically.  The structure of the Department of Minerals and Energy will, as referred to earlier on, amongst others, provide for the provision of a cost-effective “one-stop shop” information and advice service to the minerals industry.  In particular, the Council for Geoscience will have to focus on serving as a national resource for South Africa that can make data available at nominal cost.  This may require a review of the Council’s mission and Government’s funding policy towards this institution – vide section 6.1.4 of Chapter 6 of the White Paper.  The Minister of Minerals and Energy has recently, for example, in terms of section 18 of the Minerals Act, instructed the Council to conduct investigations into the occurrence of minerals and geological formations which may be considered to be in the national interest in various parts of the country, in accordance with the Council’s annual technical programme – vide Notice No 1316 of 1999 which appeared in Government Gazette No 20175 of 18 June 1999.

3.23.3     It is indeed true that small-scale miners require information on the availability of mineral rights and diamond deposits.  Government’s intention is to encourage and facilitate the sustainable development of small-scale mining in order to ensure the optimal exploitation of small mineral deposits and to enable this sector to make a positive contribution to the national, provincial and local economy.  Information on mineral rights and mineral deposits available for development will be made accessible, particularly for the benefit of small-scale miners -–vide section 1.4.2 of Chapter 1 of the White Paper.  Although the Regional Small-scale Mining Committees which were established through the various regional offices (Mineral Development) have as their main purpose the streamlining of the necessary regulatory and administrative procedures in conjunction with other relevant Government Departments, they have to provide up front guidance and advice to small-scale miners.  Assistance is also provided with the identification of sites available for mineral exploitation.  Information on all aspects relating to mineral development and exploitation will also be made available by the Department of Minerals and Energy by means of a “one-stop shop” approach – vide section 1.4.4.2 of Chapter 1 of the White Paper and the National Small-scale Mining Development Framework document released in December 1998.

3.23.4     The computerised Aktex system, in terms of which particulars of land ownership and tenure, as well as some historical information on previous land ownership are disclosed, was recently upgraded. The implementation of the computerised data base to support the Mineral Law Administration System (Minact) now enables regional offices to produce valuable information and statistics relating to applications for prospecting permits and mining authorisations, permits and authorisations issued, the negotiation of prospecting contracts and mineral leases in respect of State-owned minerals, and also some information in respect of surface usage.  The system makes it possible to easily cross-reference details of prospecting and mining projects through to environmental management and other surface developments, such as townships, and may be extended to include other relevant data.

3.24        ENVIRONMENTAL MANAGEMENT IN THE MINING AND MINE-RALS INDUSTRY

3.24.1     Insofar as environmental management control is concerned, De Beers submits that efficiency in the issuing of prospecting permits and mining authorisations should not be impeded where no real threat to the environment exists and the Company, therefore, suggests that section 39 of the Minerals Act be amended to provide for an exemption from the need to furnish an environmental management programme where investigatory activities are carried out purely by surface observations, sinking of boreholes or trenching or pick-work.  Such prospecting activities were already identified by the Department of Minerals and Energy some four years ago as one of the activities for which environmental impacts can specifically be addressed by means of a standard environmental management programme.  Such a standard document was designed and is currently being implemented in all the regional offices.  The realistic expectations of all the relevant Government Departments are provided for in the document and an extensive evaluation process is not required.  The use of this document by the majority of exploration and mining companies and all the regional offices, has certainly streamlined the administrative procedures for issuing of prospecting permits and the approval and implementation of these standard programmes.  By using this document, delays in obtaining permits and obstacles with the approval of programmes are, to a large extent, eliminated.

3.24.2     As far as environmental management for the small-scale mining sector is concerned, Government’s policy is that small-scale mining, like the rest of the mining industry, will be required to adopt measures that will promote environmental sustainability by means of the application of consistent standards and acceptance of the “polluter pays” concept, as well as financial guarantees for rehabilitation which will be flexible and site specific – vide section 1.4.4.4 of Chapter 1 of the White Paper.  In addition, it is also Government’s policy to ensure that a consistent standard of environmental impact management will be applied and maintained irrespective of the scale of the mining operation.  Special attention will be afforded to the education and the provision of guidelines for mining entrepreneurs concerning environmental management, especially for small-scale miners.  The National Small-scale Mining Development Framework which was recently formulated by the Department of Minerals and Energy, includes objectives and strategies to assist small-scale miners in dealing with environmental issues.  Furthermore, intensified attention and guidance will be provided in areas where a high concentration of small mining activities occur – vide section 4.4 of Chapter 4 of the White Paper.

3.24.3     Norms and standards relating to the mining industry and environmental management have changed in the past few years and in contrast to the suggestion by De Beers that minerals are area-bound so that questions of alternative sites and no-go options do not arise, it must be pointed out that in terms of Chapter 4 of the White Paper – section 4.2 - which deals with environmental management in the mining industry, Government in recognition of the responsibility of the State as custodian of the nation’s natural resources, will ensure that the essential development of the country’s mineral resources will take place within a framework of sustainable development and in accordance with national environmental policy norms and standards.  Integrated and holistic environmental management throughout the country, requires compliance with a single national environmental policy and governance within a framework of co-operative governance.  During decision-making, for example, a risk-averse and cautious approach that recognises the limits of current environmental management expertise will be adopted.  Where there is uncertainty, action is required to be taken to limit the risk.  This will include consideration of the “no go” option – vide section 4.4 of Chapter 4 of the White Paper.  It must also be mentioned that while Government has appointed the Department of Environmental Affairs and Tourism as lead agent to control compliance with the national environmental policies and governance, the Department of Minerals and Energy, in support of the lead agent and in accordance with national principles, norms and standards, will develop and apply the necessary policies and measures to ensure the mining industry’s compliance with the national policy on environmental management and other relevant policies, such as the national water policy.  It is also important to note that the principles of Integrated Environmental Management (IEM) will be applied to environmental management in the mining industry.  These must be amplified to include cradle-to-grave management of environmental impacts in all phases of a mine’s life, effective monitoring and auditing procedures, financial guarantees for total environmental rehabilitation responsibilities, controlled decommissioning and closure procedures, procedures for the determination of possible latent environmental risks after mine closure and the retention of responsibility by a mine until an exonerating certificate is granted – vide section 4.4 of Chapter 4 of the White Paper.  Incidentally, prospecting and mining have thus far not been identified in terms of section 21 of the Environment Conservation Act of 1989 as activities which may have a substantial detrimental effect on the environment.

3.24.4     Standard environmental management programme guidelines for prospecting, i.e. by means of drilling, digging of trenches and pits, etc., as well as for the mining of land-based precious stones, were compiled by the Department of Minerals and Energy with the further objective of streamlining the administrative processes for the evaluation, approval and implementation of these programmes in all the regional offices.  In order to ensure that standards relating to environmental issues in general and in particular standards relating to financial provision for the rehabilitation of the surface of land disturbed by mining activities, are equally applied by all the regional offices of the Department, a policy document explaining the basic requirements in this respect were circulated to all the Directors: Mineral Development.  The quantum of financial provision to be provided is calculated on a site specific basis in accordance with the relevant environmental management programme.  Diversity exists regarding the impact that may result to different areas of varying environmental sensitivity and as a result of different mining methods that may be employed.  Suitably qualified personnel were employed in the Department of Minerals and Energy in recent years to assist with the evaluation and approval of environmental management programmes and the monitoring of environmental management in all the regions.

3.24.5     As stated in sections 3.6.2 and 3.6.4 of Chapter 3 of the White Paper, Government’s intent is to endeavour to ameliorate the social consequences of sizeable downscaling and mine closure and has an obligation to assist employers, employees, industry suppliers and mine-linked communities in anticipating and managing the consequences of large-scale job losses.  Every effort will be made by Government to preserve employment in mining for as long as is economically viable and socially desirable and Government also endorses the proposal that social plans capable of cushioning the impact of structural job losses, as a result of retrenchments and restructuring, be drawn up.

3.24.6     It also needs to be mentioned that mining companies will be required to comply with the local development objectives, spatial development framework and integrated development planning of the municipalities within which they operate and will be encouraged to promote social participation by conducting their operations in such a manner that the needs of local communities are taken into consideration.  On closure of a mine, every opportunity must be taken to ensure the continued availability of useful infrastructure – vide section 4.4 of Chapter 4 of the White Paper.

3.24.7     Government’s policy is that in the process of establishing a mine, the relevant mining company shall consult the affected community, taking due cognisance of the local economic development needs and local integrated development plans – vide section 6.1.4 of Chapter 6 of the White Paper.

3.24.8     As previously mentioned, Itireleng Minerals and Energy Consultancy submits that the Department of Minerals and Energy should take full responsibility for the restoration and rehabilitation of the surface of land disturbed as a result of past diamond digging operations.  Where the particular circumstances do warrant action, the State will normally accept responsibility for the rehabilitation of disturbed land and the Minister of Minerals and Energy, with the concurrence of the Minister of Finance, may order that the costs involved be paid by the State out of funds appropriated by Parliament for this purpose and by anyone, such as a landowner or a regional authority, who will benefit from such rehabilitation, in such proportion as may be determined taking into account the practicality and equity in requiring such person or authority to contribute.  Obviously, a sincere need for rehabilitation must exist before any action will be taken by the Department of Minerals and Energy, due to budgetary constraints.

3.25        RIGHT TO CERTAIN DIAMONDS AND USE OF CERTAIN LAND DEEMED TO VEST IN THE STATE

Opportunities for small-scale mining projects are often confronted by problems, such as access to mineral rights, and the underlying reason why section 46 of the Minerals Act provides for the rights to diamonds in respect of the former alluvial diamond diggings, as well as the right to use the surface of such land, to vest in the State, is to enable small-scale miners and entrepreneurs to gain more readily access to the diamond resources, without them having to negotiate agreements with privately held diamond right holders.  The recommendation by De Beers that section 46(1) of the said Act be amended, has been referred to the Drafting Committee on the New Mineral Legislation for consideration.

3.26        APPEAL PROCEDURES TO BE IMPROVED AND TO BECOME A JUDICIAL FUNCTION

In order to promote better dispute resolution mechanisms, De Beers recommends that section 57 of the Minerals Act  be amended or that consideration be given to the establishment of a mining and minerals court.  The proposal has been referred to the Drafting Committee on the New Mineral Legislation for consideration.

3.27        REPEAL OF POWER TO MAKE REGULATIONS DEALING WITH BENEFICIATION AND MARKETING OF DIAMONDS

De Beers recommends that section 63 of the Minerals Act be amended to make it clear that although the Minister of Minerals and Energy is empowered to make regulations in regard to the possession of and dealing in diamonds, the regulations do not empower him to regulate beneficiation and marketing in an ad hoc or coercive fashion.  As far as mineral beneficiation is concerned, it is clearly stated in the White Paper – section 1.5 of Chapter 1 – that it is Government’s policy to ensure that the country’s mineral wealth is developed to its full potential and to the maximum benefit of the entire population.  Government will also promote the establishment of secondary and tertiary mineral–based industries aimed at adding maximum value to raw materials – section 1.5.2 of Chapter 1 of the White Paper.  Decisions regarding beneficiation projects will be based on sound economic and market principles, monitored by the Department of Minerals and Energy, prices for minerals and processed mineral products will be determined by the market and policies and regulations that constrain the downstream development, for example in the local jewellery manufacturing industry, will be reviewed by the Department and other Departments and institutions involved – vide section 1.5.4 of Chapter 1 of the White Paper.  In relation to minerals marketing, Government’s policy will be based on market principles and its role will be supportive and intervention will generally be limited to addressing market failures – vide section 1.6.2 of Chapter 1 of the White Paper.  Barriers, economic and otherwise, to mineral exports will be identified and appropriate strategies for their removal will be devised.  All measures which restrict the sale of the country’s minerals on foreign markets will be opposed.  Transfer pricing will be dealt with by the application and enforcement of laws and to this end co-operation and co-ordination will be established between the Department of Finance and the Department of Minerals and Energy.  Government will also encourage and support market development by producers – vide section 1.6.4 of Chapter 1 of the White Paper.

3.28        SECURITY OF TENURE IN THE DEVELOPMENT OF MINES

Government has concluded that the status quo regarding the ownership of mineral rights must be changed in order to achieve policy objectives such as, amongst others, the promotion of exploration and investment opportunities which will lead to increased mining output and employment, ensuring security of tenure in respect of prospecting and mining operations and recognising the State as custodian of the country’s mineral resources for the benefit of all.  The right to prospect and to mine for all minerals will vest in the State and legislation will be drafted which will make provision for security of tenure by granting prospecting and mining licences for specific periods, which are capable of cancellation or revocation only for material breach of the terms and conditions of the licence and registerable prospecting and mining licences which will be transferable with the consent of the State – vide section 1.3.2 of Chapter 1 of the White Paper.

3.29        ACCESS TO MINERAL RIGHTS AND MINERAL DEPOSITS

3.29.1     Arising from remarks by De Beers that the Department of Minerals and Energy in its administration of State-held mineral rights is chronically understaffed, it is to be mentioned that Government has committed itself to a continuing process of economic liberalisation which will, amongst others, include bureaucratic deregulation.  It is Government’s policy, as stated in section 1.1.4 of Chapter 1 of the White Paper, to seek to create a macro regulatory environment conducive to economic growth and development, in which mining can make effective use of its human and capital resources, and will aim to lower barriers to entry to prospective new investors in the industry.  In order to regulate the mineral industry to meet national objectives and bring optimum benefit to the nation, the intention is to regulate and promote activities of Government in a transparent and efficient manner – vide section 6.1.2 of Chapter 6 of the White Paper.  As lead agent for the governance of the minerals industry, the structure of the Department of Minerals and Energy will, for example, provide for the improvement of administrative procedures in respect of the granting of prospecting and mining rights – vide section 6.1.4 of Chapter 6 of the White Paper.

3.29.2     Government, as mentioned above, does not accept South Africa’s current system of dual State and private ownership of mineral rights and its long-term objective is for all mineral rights to vest in the State for the benefit of and on behalf of all the people of South Africa – vide section 1.3.6 of Chapter 1 of the White Paper.  It is Government’s intention to take reasonable legislative and other measures to foster conditions conducive to mining which will enable entrepreneurs to gain access to mineral resources on an equitable basis – vide section 1.3.2 of Chapter 1 of the White Paper.

3.29.3     Although the current system of mineral rights allows for the division of mineral rights into divided sub-divisions or into undivided shares or into different minerals, Government recognises the State as custodian of the nation’s mineral resources for the benefit of all.  It is also Government’s intention to take transfer of mineral rights in cases where holders thereof cannot be traced or where mineral rights have not been taken cession of and are still registered in the names of deceased persons – vide sections 1.3.2 and 1.3.6 of the White Paper.  The applications for ministerial approval in terms of section 17 of the Minerals Act to prospect for or to mine diamonds, which were lodged by Mr J J Daffue on behalf of his clients were, according to the office of the Director: Mineral Development for the North-West region, subsequently dealt with and disposed of.

3.29.4     As previously pointed out, opportunities for small-scale mining concerns are often confronted by problems such as access to mineral rights and known mineral deposits.  It is Government’s intention to encourage and facilitate the sustainable development of small-scale mining in order to ensure the optimal exploitation of small mineral deposits and to enable this sector to make a positive contribution to the national, provincial and local economy.  Moreover, information on mineral rights and mineral deposits available for development will be made accessible particularly for the benefit of small-scale miners – vide sections 1.4.2 and 1.4.4.1 of Chapter 1 of the White Paper.  In order to enable citizens to gain access to mineral rights, a new system for granting access is to apply in terms of which the right to prospect and to mine for all minerals will vest in the State.  Legislation to give effect to this policy is presently being prepared – vide section 1.3.6.2 of Chapter 1 of the White Paper.

3.29.5     Concerning a proposal by Earthlife South Africa that some form of tax should be paid on unused mineral rights, Government will investigate the feasibility of imposing disincentives which would be intended to discourage the non-utilisation of privately-owned mineral rights – vide section 1.3.6.6 of Chapter 1 of the White Paper.

3.29.6     Although mining activities may in certain circumstances be allowed in terms of the Minerals Act without the consent of a co-holder of the mineral rights, a new system of access to mineral rights is to be introduced through legislation proposals which will be put forward for consideration by Government shortly.  The right to prospect and to mine for all minerals will vest in the State and royalties and surface rental will be determined by the State after consultation with the mineral right holder and the landowner, respectively – vide section 1.3.6.2 of Chapter 1 of the White Paper.  The proposed new legislation will also make provision for the granting of prospecting and mining licences to applicants without the consent of the holders of prospecting, mining or mineral rights who have not been licenced in terms of such new legislation.

3.29.7     It has been ascertained from the Directorate Mineral Development: North-West region that the issue regarding the acquisition of diamond digging rights referred to in submission 79 by Mr G Wessels, has since been resolved to the satisfaction of all the relevant parties.

3.30        HOARDING OF MINERAL RIGHTS AND PROSPECTING AND MINING RIGHTS

3.30.1     Proponents of the system of State ownership of mineral rights concede that the existing system allows hoarding of privately-held mineral rights by mining companies which is a barrier to entry against potential investors.  Government does not accept South Africa’s current system of dual State and private ownership of mineral rights and its long-term objective is for all mineral rights to vest in the State for the benefit of and on behalf of all the people of South Africa.  Legislation is presently being drafted in terms of which the right to prospect and to mine for all minerals will vest in the State and which will provide for guaranteeing the continuation of current prospecting and mining operations in accordance with the “use-it and keep-it” principle, thus allowing for the licencing of bona fide intended prospecting and mining operations, also for the granting of prospecting and mining licences to applicants without the consent of the holders of prospecting, mining or mineral rights, in certain circumstances – vide section 1.3.6.2 of Chapter 1 of the White Paper.

3.30.2     In order to prevent the hoarding of mineral rights and the sterilisation of mineral resources, legislation is being developed guaranteeing the continuation of current prospecting and mining operations in accordance with the “use-it and keep-it” principle, which will allow for a transitional period giving the holders of prospecting, mining and mineral rights the opportunity to licence bona fide intended prospecting and mining operations and which will make provision for annual minimum work and investment requirements to discourage the unproductive holding of prospecting and mining licences – vide section 1.3.6.2 of the White Paper.  As mentioned earlier, Government will also investigate the feasibility of imposing disincentives which would be intended to discourage the non-utilisation of privately-owned mineral rights – vide section 1.3.6.6 of Chapter 1 of the White Paper.

3.31        USE OF THE SURFACE OF LAND FOR PROSPECTING AND MINING PURPOSES

3.31.1     The predominance afforded to the mining industry in relation to the use of the surface of land for prospecting and mining purposes and purposes ancillary thereto, no longer prevails and as stated in section 4.2 of Chapter 4 of the White Paper, Government in recognition of the responsibility of the State as custodian of the nation’s natural resources, will ensure that the essential development of the country’s mineral resources will take place within a framework of sustainable development and in accordance with national environmental policy, norms and standards.  In addition, equitable and effective consultation with interested and affected parties will be undertaken pro-actively to ensure public participation in the decision-making process and the audi alteram partem (hear the other side) rule shall apply to all decision making in connection with mining and environmental control.  The principle of multiple land use will be adhered to in planning decisions, and contending options will be assessed and prioritised on economic, social and environmental grounds – vide section 4.4 of Chapter 4 of the White Paper.

3.31.2     Section 46 of the Minerals Act states that the right to diamonds in respect of the previously proclaimed alluvial diamond diggings, including the right to use the surface thereof necessary for the purposes of the mining and processing of diamonds, is deemed to vest in the State.  The compensation which is determined in terms of section 9(2) of the said Act, is payable to the land owners.  It is not, at this point in time, necessary for the diggers to conclude written agreements with freehold owners of land on these former alluvial diamond diggings.  The proposed new legislation to regulate the acquisition of prospecting and mining rights will not only vest the right to prospect and to mine for all minerals in the State, but royalties and surface rental will be determined by the State in consultation with mineral rights holders and landowners –vide section 1.3.6.2 of Chapter 1 of the White Paper.

3.31.3     The holder of mining rights, such as claims for precious stones, has the same rights in respect of the use of the surface of land to which such rights relates as that which the holder of a right to a mineral has in terms of the common law in respect of such use – vide section 47(2) of the Minerals Act.  It is apparent from the aforegoing that the claim holder who is also the holder of a mining authorisation has the right to enter upon the claim area together with such persons, plant or equipment as may be required for the purposes of mining diamonds and to dispose thereof and nobody may deny him access to his claims.  The holder of a mining authorisation must, however, give the occupier of the land notice in writing of his intention to commence mining operations, at least 14 days prior to commencement thereof – vide section 54(2) of the Minerals Act.

3.31.4     It has been suggested that the Department of Minerals and Energy should look after the interests not only of the minerals industry, but also of the communities in the areas where mineral exploitation is taking place.  As mentioned earlier on, Government’s policy is that in the process of establishing mining operations, the relevant mining company should consult the affected community, taking due cognisance of the local economic development needs and local integrated development plans.  Intermediate statutory regulatory institutions, such as mineral trusts, will be phased out – vide section 6.1.4 of Chapter 6 of the White Paper.

3.32        COMPETING APPLICATIONS FOR PROSPECTING CONTRACTS AND MINERAL LEASES

It often happens that while applications for prospecting and mining rights in respect of State-held mineral rights and State land are being processed, competing applications in respect of the same land and for the same mineral(s) are received.  Where the State is the holder of the right to any mineral, a discretion to consent to prospect or mine for such mineral has been granted to the Minister of Minerals and Energy.  The Minerals Act does not provide for a procedure to be followed in order to obtain the Minister’s consent and does not prescribe any of the issues which the Minister must take into account in order to reach a decision.  The Chief State Law Adviser is of the opinion that the matter of obtaining the consent of the Minister is unsatisfactorily dealt with in the Act and could be clarified to a large extent by legislative amendments, with due consideration to administrative justice.  The Department of Minerals and Energy has, after examining ways and means to deal with the matter, compiled procedures and minimum requirements for applications in terms of sections 6(3), 8(2) and 9(2) of the Minerals Act.  The Minister approved it for implementation on 27 July 1999.  It is foreseen that the prescribed procedures and requirements would to a great extent eliminate the problems related to competing applications.

3.33        ACCESS TO OWNERSHIP AND MANAGEMENT OF THE MINING INDUSTRY

Government has the responsibility to put in place a policy framework for ensuring that minerals are utilised in general wealth that will benefit the nation as a whole, for meaningful black participation in the ownership and management of the mining industry to be accelerated and for entry of new participants in the mining industry, especially in the small-scale sector, to be facilitated.  As stated in the White Paper – section 2.2 of Chapter 2 – Government will encourage changes leading to equity of opportunity in respect of access to ownership and management of the mining industry.  A wider spread of ownership in the industry is to be promoted and specific initiatives may be introduced to deracialise business ownership and control by means of focused policies of black economic empowerment and in the mining sector State intervention through parastatal development finance institutions to finance investment in new and existing mining ventures in partnership with black companies, will be encouraged – vide section 2.4 of Chapter 2 of the White Paper.  Black entrepreneurs and investors are increasingly showing an interest in the mining industry and are actively familiarising themselves with mining and are regularly gaining information on development projects.  As a result, they are entering into mining through the acquisition of mining undertakings and by joining top management teams.

3.34        HUMAN RESOURCE DEVELOPMENT IN THE MINING AND MINERALS INDUSTRY

3.34.1     The Finance and Training Sub-committees of the National Steering Committee of Service Providers to the Small-scale Mining Sector will determine ways and means to address training for small-scale miners – vide the National Small-scale Mining Development Framework report.  It is Government’s policy that Science Councils and Government Departments should also endeavour to establish joint venture research and training programs with universities and the private sector in order to produce the necessary skilled and productive manpower required for mineral benefication developments – vide section 1.5.4 of Chapter 1 of the White Paper.  The Harry Oppenheimer Diamond Training School, for example, has been established and is central to the development and support of the diamond industry in the country and its mission is to make the diamond industry accessible to the disadvantaged majority and thereby changing the perception of the diamond industry.

3.34.2     It is accepted that a large number of small-scale miners have little or no money to pay for training, technical assistance, machinery, etc.  The National Steering Committee of Service Providers to the Small-scale Mining Sector is not in favour of rendering free services, but will provide the following services in a “credit base” manner –

(a)                 training for specific pilot projects to develop a specific ore body;

(b)                 assistance in exploration;

(c)                 assistance in the design of a business plan;

(d)                 if required, soft skills training in business administration and management; and

(e)                 assistance in obtaining financing.

Applications for assistance must be lodged through the Directorates: Mineral Development in the various regions to the National Steering Committee of Services Providers to the Small-scale Mining Sector.  Costs for services will be recovered if and when the business has commenced with its activities, as part of capital expenditure.

3.34.2     As stated in the White Paper – section 1.4.4.2 under Chapter 1 – it is Government’s policy to encourage and facilitate access to funding for small-scale mining through appropriate and targeted institutions.  This matter is also being investigated by the National Steering Committee of Service Providers to the Small-scale Mining Sector.

3.34.3     In recent years the demands from the small-scale mining sector, in particular disadvantaged citizens, for entrepreneurial opportunity and employment, have turned attention to the potential of small mineral deposits in alleviating poverty and other social problems.  In terms of Government’s policy to facilitate the development of small-scale mining, the National Small-scale Mining Development Framework has been formulated to create an environment conducive to such development.  Some of the objectives of this framework are to identify training needs, to establish existing and potential training and capacity building options suited to small-scale miners, on-the-job or on-site training and to identify suitable training/capacity building options – vide the National Small-scale Mining Development Framework document.  Respecting environmental management, Government will support the provision of training and skills development for small-scale miners – vide section 1.4.4.4 of Chapter 1 of the White Paper.

3.35        VALUE-ADDED TAX

The appeal by De Beers that the Department of Minerals and Energy should register as a vendor for purposes of value-added tax in order to facilitate the granting of prospecting and mining rights over State-held mineral rights, raises an issue which was debated between officers of the Department of Minerals and Energy and the Commissioner for the South African Revenue Service and the conclusion was reached that there will be no advantages for the State should the Department register as a vendor.  It was agreed that only in cases where the State competes with the private sector, should this option be considered – vide a letter, dated 22 January 1998, addressed to the said Commissioner by the Department of Minerals and Energy, under reference No GME 15/1/1/2 (93).

3.36        GENERAL

3.36.1     As stated in the White Paper, section 1.1.2 of Chapter 1, it is Government’s intention to create a stable macro-environment that supports economic development at national, provincial and local level and in which business, subject to appropriate regulation, can operate profitably, be internationally competitive and satisfy their shareholders’ and employees’ expectations.  Government’s intention is also to encourage investment in mining as in other industries.  It must also be realised that the taxation of mining activities follows the normal rules and objectives of taxation and that this important source of income should be used to meet national objectives and to bring optimum benefit to the nation as a whole and that taxes derived from a particular mine cannot be used to satisfy the needs of only those communities in the areas where mineral exploitation activities are taking place.

3.36.2     Government will not be prepared to bear the costs for legal and other expenses incurred by the Diggers Vigilance Committee in the Wolmaransstad area, as suggested by Mr C N G Janse van Vuuren to protect the former proclaimed alluvial diamond diggings (since deproclaimed) from the use and occupation thereof by illegal small-scale miners.  Government realises that the interests of communities demand that all forms of mining, whether large, small or artisanal, should be subject to the same requirements in respect of licensing, safety, health and environment.  Through the recently established National Steering Committee of Service Providers to the Small-scale Mining Sector an assistance approach to provide legal and technical advice has been developed.  Regional Small-scale Mining Committees were set up in the various regions to bring illegal mining operations under the law and Government’s valuable contribution towards establishing a better environment for small mining groups is creating opportunities for them to commence with mining by using innovative practices, the benefits of which are also observed by the illegal miners.

3.36.3     The application submitted by African United Small Mining Association for a mining authorisation for diamonds affecting land in the Delportshoop area, District of Barkly West, was refused by the Director: Mineral Development, Northern Cape region, because of a prior application which had been received and a mining authorisation issued to Gakah Marketing CC, after the legal procedures and prerequisites had been complied with.

3.36.4     The internal conflict between members of African United Small Mining Association is a private matter that must be resolved between the relevant parties.

3.36.5     It has been ascertained from the office of the Director: Mineral Development for the Northern Cape region that the mining permit for diamonds, relating to an area adjacent to the Canteen Kopje cultural and historical site, has since expired and that more stringent environmental conditions are presently being negotiated with the relevant mining concern to protect the area, before the issuing of a further mining authorisation will be considered.

3.36.6     The National Small-scale Mining Development Framework has been developed with the objective to establish a practical mechanism whereby, inter alia, potential financiers of small-scale mining ventures can communicate and co-operate effectively.  The high risk involved in mineral exploitation and the large sums of capital required for the development of mining projects often inhibits recognised banking and financial institutions to provide loans towards financing small and medium scale entrepreneurs.

3.36.7     The national Government, through the Department of Water Affairs and Forestry, is the custodian of all the country’s water resources and authorisations to use water for mining purposes must henceforth be obtained in terms of the National Water Act of 1998.  It needs to be emphasised that new regulations on the use of water for mining and related activities which are aimed at the protection of water resources, were published in Government Gazette No 20119 of 4 June 1999, in terms of the aforementioned Act.

3.36.8     A reversion to the previous system of proclamation of alluvial diamond diggings and the granting of a certain number of discoverers claims to persons making a discovery of diamondiferous gravels and deposits, as suggested by Mr J M van den Heever, is not envisaged.  Under the repealed diamond laws, the person who made a discovery of diamonds in payable quantities, was entitled to a given number of claims in respect of alluvial deposits and at any time after such a discovery of diamonds, the proclamation of an alluvial digging would follow.  This procedure, however, has long since become antiquated.

3.C          OUTSTANDING ISSUES

3.37        GRANTING OF PROSPECTING AND MINING RIGHTS AND THE ISSUING OF PROSPECTING PERMITS AND mining authorisa-tionS

3.37.1     It has been ascertained from the Directorate Mineral Development of the Western Cape region that an application for prospecting rights by Asam Minerals CC over privately-owned land, in respect of which the mineral rights vest in the State, is being delayed because the aforementioned concern has thus far failed to come to an amicable agreement with the owner regarding the use of the surface of the land in connection with the intended prospecting operations.  The Department of Minerals and Energy recently issued a directive covering the hearing of interested and affected parties which could be implemented in this case to solve that problem.

3.37.2     In terms of the proposed new system for granting access to mineral rights, which policy will necessitate the development of detailed legislative proposals to substitute the existing Minerals Act in its entirety, provision will be made for the issuing of prospecting and mining licences to applicants, which licences will be registerable rights.  The White Paper does not expressly provide for the granting of prospecting contracts and mineral leases in respect of State-held mineral rights or State land and it may therefore be accepted that the granting and registration of such rights in present form, will ultimately be discontinued when the intended new mining legislation comes into operation.  The proposal by De Beers with regard to the registration of existing agreements with the State respecting State land, at the Mining Titles Office and not at the relevant Deeds Offices, has been referred to the Drafting Committee on the New Mineral Legislation for consideration.

3.37.3     De Beers is of the view that mineral lease agreements concluded with the State respecting State-held mineral rights in terms of section 9(2) of the Minerals Act, should be notarially executed as contemplated in section 3 of the General Law Amendment Act of 1956.  This issue was previously raised, and numerous examples can be quoted where the State has concluded mineral leases with medium to large mining companies, which leases were notarially executed and registered in the Deeds Offices.  The matter falls within the mandate of the Drafting Committee on the New Mineral Legislation and will be considered at that forum.

3.37.4     The argument by Itireleng Minerals and Energy Consultancy, on behalf of certain groups of persons and communities, that the application fees payable for mining permits and licences for diamonds be reduced and made more affordable to the small-scale community diggers and that mining permits be issued for periods exceeding two years, will be considered by the Drafting Committee on the New Mineral Legislation.

3.38        INFORMATION IN REGARD TO PROSPECTING AND MINING

Exploration Targets (Pty) Ltd proposed that cadastral plans, to scale, indicating mineral rights holdings be prepared and compiled by the offices of the Surveyor General and that copies of these plans be made available to the general public, on payment of a prescribed fee.  A strong recommendation is made that the proposed data base of mineral rights holdings be extended to include these plans and it is essential for the data base to be kept up-to-date.  The need that information on mineral rights should be more readily available, led to the “one-stop shop” approach in the White Paper.  The Department of Minerals and Energy is consequently given attention to this issue and is currently considering the development of a Geographical Information System (GIS) which is linked to the MinAct System.

3.39        ACCESS TO MINERAL RIGHTS AND MINERAL DEPOSITS

Diamond production on the patches of diamondiferous gravels along the banks of the Vaal and Orange Rivers and the small kimberlites and fissurers in the Bellsbank-Barkly West area which are still being mined by the small-scale diggers and different mining companies, is declining rapidly.  If any productive gravels, kimberlites and fissures are to be found in the Vaalbos National Park and the so-called Schmidtsdrift-area which is presently the subject of land restitution claims by the local Tswana community, an attempt should be made to make at least some of the land available for small-scale mining.  At the moment, of course, prospecting or mining in any of the national parks is prohibited – vide section 20 of the National Parks Act of 1976.  It has been ascertained from the office of the Director: Mineral Development for the Northern Cape region that the provincial authorities are currently looking into the possibility of requesting for the Vaalbos National Park to be deproclaimed, which may pave the way for making additional land along the Vaal River available for diamond digging.  It may, however, take a long time before a final decision in this matter will be reached.

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