Issued by Ministry of Minerals and Energy
25 June 2002
INTRODUCTION
In my speech today, I don't intend to be triumphant, but instead to extend an olive branch. I do not want to feed into the polarisation, the country is being pushed into, not by government, not by labour nor by mine owners, but by people who have nothing to lose, who are using their domination of mass communication to distort all of us and the lousy opposition who pretend to speak for the industry without their mandate. I am here to extend an olive branch, because the building of this country and particularly turning this industry into a sunrise industry has always been a shared vision by all stakeholders especially the tripartite. This is a joint project in our quest to make the mining industry a sunrise industry.
1. In 1955 June 26, the people of South Africa led by the ANC declared, "the people shall share in the country's wealth". Today, once more we bring that clause of the Freedom Charter to life. We bring sharing in the country's mineral wealth with small company's, established companies, artesian miners, small miners and all investors, foreign and local.
2. The Freedom Charter also instructs, "The land shall be shared amongst those who work at it ". The diamond diggers in the Northern Cape who know nothing about technology but just tilling the land in the hope of finding precious stones will be assisted to realise much better value from their sweat.
3. "The doors of culture of learning shall be opened". In this Bill, we are determination to adhere to the Skills Development Act and to provide multi-skilling to workers and to assist them to cope with retrenchments. This becomes a must and not a choice for the industry.
This should become a norm rather than an exception. Honourable Members, this cannot be too much to ask for and to strive for together.
4. The wisdom of our leadership as demonstrated in Kliptown has once more shown itself to be timeless and still relevant today. It is a pity we did not achieve this earlier, but it is not too late.
"No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged." Adam Smith -The wealth of nations - one of the founding fathers of capitalism.
5. We desire with a passion to help mine workers to help mineworkers who suffer from aching backs, sore limbs and dust in their faces. We also want to benefit the home sick men in the hostel whose life can be glimpsed by all of us in "Emzini Wezinsizwa".
1. THE ROAD TRAVELLED
Those who have eagerly and impatiently waited for decades have argued in their submissions that the Bill does not go far enough. There are those who feel that Government has gone too far and those who feel this is a perfect piece of legislation.
Between all of these contradictions, I feel we have reached sufficient consensus, which is typical of us South Africans. We have travelled a long way. Since December 1994 when the African National Congress released, the Discussion document on a Minerals and Energy Policy, this document set off a series of negotiations and debates around the future of minerals and mining policy for South Africa. The White Paper on Minerals and Energy was adopted in 1998. I thank Dr Maduna for his sterling work.
In November 2000, Cabinet approved that the draft Minerals Development Bill be released for public comment. The rest is history. Those who accuse us of rushing this bill must have been sleeping through it all. Those who have been excluded, in fact, have waited for generations over a century for this day. In the same breath those who have had access and therefore dominated remain valuable contributors in the industry. The bill is not in any way vengeful but inclusive and about accommodation. We remain convinced that notwithstanding the public position from all of us, this bill is what all experienced miners know all around the world. So even though the current dispensation may have been preferred the new is not stranger.
2. LIMITATION OF DISCRETIONARY POWERS
One of industry's main concerns with the Bill is the granting of excessive discretionary powers to the Minister. However a comparative study between the provisions of the bill and the current Minerals Act, 1991, reveals that the proposed provisions of the Bill are largely limiting discretionary powers.
In the current act, the Regional Manager may issue a closure certificate which would exempt a mining company from all provisions of the act when the Regional Manager is satisfied that the mine has rehabilitated to his / her satisfaction. The lack of legislative and statutory muscle in current and past legislation has made it possible for mining houses to exploit the situation by conducting their lucrative mining operations in an irresponsible manner, reckless of the environmental impacts and social consequences asbestos is a case in point.
The Mineral and Petroleum Resources Development Bill has, to the contrary, limited discretion of this kind to the absolute minimum, thereby addressing concerns of other state departments, industry and affected parties and stakeholders.
Firstly, everything done under the Bill, is informed by the objects of the Bill contained in clause 2. The processing of prospecting and mining applications is completely transparent, and the granting of these rights is subject to the fulfilment of objective statutory requirements contained in the various relevant clauses of the Bill. In clause 23 the Minister is now obliged to grant under stipulated circumstances, just as she/he is obliged to refuse to grant applications for rights on stipulated statutory defined circumstances.
The Minister is now obliged to approve an environmental management programme once the statutory criteria and requirements have been met. In terms of clause 38, the Bill now applies the "polluter pays" principle, which will prevent future ownerless, a derelict mines from shifting the rehabilitation onus on the state.
A mine will not obtain closure unless a closure certificate has been issued, which certificate will only be issued once the mining company has met and complied with the requirements of the Bill. These requirements are provided for in the Bill.
The discretion of the Minister and Regional Managers is therefore significantly less than what is currently the situation. They still have to think to govern and that needs discretion, which we cannot apologise for or else we want the managers to be robots. Many companies may need this discretion in times of difficulties in the market.
3. THE SHIFT IN DEBATES SINCE THE RELEASE OF THE FIRST DRAFT
During the policy development and the drafting process of the proposed legislation, we witnessed, the shift in debates from all stakeholders including government. We have applied our minds at all times and to all concerns. This is an indication of the robustness of our debates. Initially big companies identified lack of ownership in particular as a threat to security of tenure and what they understood as idling between the criteria and the Ministerial discretion. We redrafted the Bill to make the link but still not defeat the key objectives of the Bill by giving rights in perpetuity. We gave additional licences for up to 30 year and renewable for an additional 30 years, which is above international average.
Then they came back to argue that security of tenure was threatened by lack of clear definition of BEE and social plan. Both of these are detailed, subject of attachments, which we still want to consult them about.
The Bill provides for consultation to be completed within six months and we have added the definition in the Bill as requested, and will quantify empowerment as was demanded by all the presenters both Black and White, as well as big and small. We thank them for having suggested this so strongly, as it cannot be said that government imposed the quota approach. It was the demand of the industry.
I must add that people will pay for the equity; it will not be a matter of asset grabbing as was implied by some commentators based on polarisation..
4. CONTENTS OF BILL
The Bill is based on the following fundamental principles -
The "use it or lose it" principle, is a principle that we have adopted from major mining countries. The purpose of this, principle is to ensure, that jobs are created and no minerals are hoarded, that small and viable resources are accessible to small miners and junior miners, both local and foreign. This is what has made our competitors to grow and to have diverse ownership in the industry.
5. SUSTAINABLE DEVELOPMENT
It is also important for mining to ensure that economic benefits accrue to society as a whole and, more specifically to communities affected by mining. Whilst the mining industry regulations address the issue of mitigating environmental degradation associated with mining, the social environment has not in my opinion been adequately addressed up to now. This is evidenced by the cruel impact of migrant labour and plight of communities who are a sea of poverty in islands of mine wealth.
We have watched many cities turning into 'Ghost towns" when the mine owners decide that it is no longer profitable to continue mining. We have seen many families being devastated as a result of breadwinners losing their jobs due to declining mining activities. Stories related to declining mining activities and closures of mines are endless. The solution lies in implementing sustainable ways of exploiting mineral resources that will ensure that both environmental and social consequences of mining are properly addressed. In this area we have always understood that all stakeholders agree on a need to act decisively.
6. BENEFICIATION
I must emphasise that in almost all African mining economies we stop at mining, with very little effort at beneficiating our mineral resources, so we simply export jobs and make mining a sunset industry. If we are really serious about job recreation, about a sunrise industry we have to add value to our minerals. In this Bill we commit to the promotion of beneficiation, market conditions permitting of course.
Preference should be given to those investors who want to beneficiate and mine our minerals especially where there are competing applications. This is one of the ways of ensuring that the mineral resources of our country are used for sustainable economic development. Definition of beneficiation will be in the regulations when Mintek has finished a mineral-by-mineral definition.
We have been asked why legislate redress of past discrimination? The fact is oppression in South Africa was legislated for. Not so long ago, not more than 10 years to be exact, Blacks were prohibited by law from participating in the mining industry as entrepreneurs. In addition, laws were passed which made it virtually impossible for Blacks to gains access to natural resources, in general and mineral resources in particular; hence our constitution enshrines this equitable access to these resources. The issue of redress is not a political one; it is a constitutional obligation of the State. It will only become a political and economic issue if the State does not comply with its Constitutional obligations and our people will express their unhappiness.
7. BENEFITS OF THE BILL TO: NEW ENTRANTS, WORKERS, INDUSTRY, COMMUNITIES AND OVERALL ECONOMY
7.1 New entrants
7.2 SMME Development
The department will facilitate access to technology, which will be provided by Mintek, Miningtek and other sister organisations. IDC, DBSA will be in a position to render assistance to SMMEs. The national empowerment fund will assist in providing with exploration finance in order to produce a bankable document. There will be access to broader variety of small industrial minerals i.e. clay gravel etc.
7.3 Established players
7.4 Benefits to workers
7.5 Benefit to communities
For the first time in the history of this country, the Government will make sure that communities benefit from the exploitation of our mineral resources like other countries. The Bill provides for:
7.6 Benefits to the entire economy
Jobs
8 DEFINING EMPOWERMENT FROM GOVERNMENT PERSPECTIVE HAS TO BE BROAD BASED SOCIO ECONOMIC EMPOWERMENT
It will be broadly covering:
(a) Ownership
(b) Procurement
(c) Equity employment and Operational Presence
(d) Human Resource and Skills Development
9 SOCIAL AND LABOUR PLAN
Key elements:
Members this is not a Bill for racial polarisation it is a Bill for all South Africans to find other place in the sun. All these things are possible it is not a wish list, I look forward to see Koekemoer and Bakgatla sons and daughters mining corporations. That is the South Africa we want or Torronto and Kwa-Maritane joint venture.
I want to recognise the Kings, Kgoshi's and their entourage and thank them for their support and express commitment to this Bill.
PULA!!!
10. WAY FORWARD
This has been a robust and highly emotive process, which was unfortunately polarised especially with the way in which the media reported and misled the public without reading the Bill in many cases, both in South Africa and abroad. We cannot allow the standard of journalism in South Africa to reach such shameful levels. We can only hope that we have learnt from this process as stakeholders how to work better with one another and more directly.
The economic and social security of our country is the biggest concern for us all and restraint should be exercised where we have serious differences. Let us not project the worst to the world when we cannot get what we want. We should question and interrogate advice before we accept it as the truth. I have no doubt the mining companies in South Africa want the best for this country. They may struggle initially with transformation but I know they will come around. Their future is bright and this government further extends our olive branch to them.
The important role of Chamber of Mines as an employer cannot be underestimated especially their duty to transform the industry after this experience. They have in the Mining Summit showed that co-operation between the new entrants and the chamber is in the country's interest and its future. I therefore call upon all South Africans in the industry who will in future be partners in any case, to join hands in transforming this valuable and precious industry and in that way move the country into a new era.
Further more I have instructed my Director-General to immediately hold discussions with Anglo Platinum with a view to finding an amicable solution to the problems regarding the processing of their applications as a matter of urgency. To this end I am informed that the meeting will take place in Pretoria on Monday the 2nd of July. I would like to take this opportunity to commend Angloplats for their willingness in the steps they have taken to find an amicable solution to this problem.
I, call upon all small scale miners, junior miners, foreign mining companies, local companies, women, whites to take advantage of new opportunities which will be opening up as a result of the implementation of this Bill - as the saying goes "you snooze you lose", "Walala wasala"
11. VOTE OF THANKS