Analysis of the 2014/15 Annual Report of the Department of Mineral Resources (DMR) Template from: http://faranani.parliament.gov.za/main/unsecure/attachments/documents/APP%20PRESENTATION.PPT Information sourced from: Nicol, M. (2015) Department of Mineral Resources Annual Report 2014/15 Analysis. Research Unit, Parliament. 07 October. http://docs.parliament.gov.za/share/s/hUvBuf2LSiWvPRM5RorJPA Draft for the Portfolio Committee on Mineral Resources (PCMR) Martin Nicol Parliamentary Research Unit 14 October 2015

Points of Reference DMR Annual Report 2014/15 Budget (Vote 32) passed in 2014 DMR Strategic Plan 2014/19

Achievements in year April 2014 to March 2015 Unqualified audit opinion. DMR achieved 90% of performance targets. Fatalities on mines at lowest level ever. One Environmental System for mining in place. Shale gas regulations gazetted, includes measures to manage environmental risks. Tripartite summit to promote “Zero Harm”. Co-ordination plan to revitalize mining R&D.

Challenges Performance achievements and improvements in the Annual Report are overshadowed by a serious lack of progress on matters of legislation and policy MPRDA Mine Health and Safety Act amendments DMR has not successfully tackled two particular concerns raised by the PCMR: High level of vacancies Retention of skilled staff, particularly inspectors.

Progress impression - legislation and policy for mineral resources One Env System Ex mine workers MPRDA Bill Amend MHSA WIM strategy SOMCO Bill Mining Charter Amend Diamond Act ODIMWA / COIDA Geo-science regs Illegal mining (law) Progress impression - legislation and policy for mineral resources Source: 0226 and D:\MNWDx\Mar15x\MN2015\[0132 BRRR input information 2015 current.xlsx]Progress_15 Nicol, M. (2015) Vote 32: Department of Mineral Resources—Research Inputs for the 2015 Budgetary Review and Recommendation Report (BRRR): Assessment of progress with Legislative amendments and policy development for mineral resources – October 2015. Research Unit, Parliament. 12 October [0226] Progress indicator Issue / law 1 One Environmental system for mining 1.5 Ex-mineworkers 5 Amendments to the MPRDA 6 Women in mining strategy 6 Amendments to the Mine Health and Safety Act 7 Mining Charter 7 SOMCO legislative framework 8 Amendments to the Diamond Act 9 Illegal mining (law) 9 Regulations for the Geoscience Amendment Act 9 Inferior compensation for mineworkers with lung disease 10 Liquidation of mines 10 Amendments to the Mintek Act 10 Amendments to the Precious Metals Act 11 Consequences for mining of SPLUMA 11 Beneficiation Mine liqui- dation Amend Mintek Act Amend Precious Metals Act No progress evident Work in progress Good progress SPLUMA . Bene-ficiation

Challenges Performance achievements and improvements in the Annual Report are overshadowed by a serious lack of progress on matters of legislation and policy MPRDA Mine Health and Safety Act amendments DMR has not successfully tackled two particular concerns raised by the PCMR: High level of vacancies Retention of skilled staff, particularly inspectors.

Performance Indicators Improvement in consistency and clarity of performance indicators 90% of indicators achieved in 2014/15 This compares with 77% in 2013/14 and 79% in 2012/13. Number of indicators reduced from over 160 to 109. Content of some has also changed

Summary of 2014/15 Performance Measures for DMR Source: D:\MNWDx\Mar15x\MN2014\[0072 BRRR input information 2014.xlsx]AR analysis $B$37 Excellent performance across all branches 99.57% of all invoices paid within 30 days

Summary of 2014/15 Performance Measures for DMR Source: D:\MNWDx\Mar15x\MN2014\[0072 BRRR input information 2014.xlsx]AR analysis $B$37 Improvement across all branches Number of indicators reduced from over 160 to 109. Content of some has also changed

Two areas of repeated non-achievement Vacancies DMR vacancies are at 14% vs target of <10% Vacancy rates in all national departments is 9% Department of Public Service and Administration has set a national target for all departments and entities of a vacancy rate less than 10%.

No Director: Supply chain management for 3 years 7 months The width of the red bars illustrates the time each post has been vacant – most are either above or below 9 months (which is the median – middle – value) Source: H:\RESEARCH\Research Unit\Mnicol\DigitalDocs\0219 Graphic to picture DMR vacancies.pptx Also see Nicol, M. (2015) Analysis on vacancies and filling of posts in the Department of Mineral Resources (DMR). Research Unit, Parliament. 23 September. No Deputy Chief Inspector of Mines for 4 ¾ years

MHSI vacancies: A long term problem with no improvement for five years New source file: D:\MNWDx\Mar15x\MN2015\[0061 Mine Health and Safety tables 2015.xlsx]MHSI Programme 2 hidden for the presentation – see 0223 And this graphic source file D:\MNWDx\Mar15x\MN2013\0057 VACANCY TRENDS IN MINE HEALTH AND SAFETY.pptx MHSI vacancies: A long term problem with no improvement for five years

DMR and entities: comparative achievement of planned targets 2014/15 2014/15 Performance Measures   Number of measures Number achieved % achieved % not achieved DMR* 107 96 90% 10% Geoscience 29 17 59% 41% Mintek 88 82% 18% SDT 21 16 76% 24% SADPMR 23 19 83% 17% MHSC 9 7 78% 22% MHSI* 22 86% 14% I:\MN2015\[0132 BRRR input information 2015.xlsx]compare_15 The Auditor General has stated [0129] that a level of non-achievement of planned targets above 20 per cent is not acceptable and suggests weaknesses in the strategic planning process. CGS (2012c). ** Same as Programme 2 of DMR report The Auditor General has stated that a level of non-achievement of planned targets above 20 per cent is not acceptable and suggests weaknesses in the strategic planning process.

Comparative achievement of planned targets 2013/14 performance compared with 2014/15 2013/14 Performance Measures   2014/15 Performance Measures Number of measures Number achieved % achieved % not achieved DMR* 166 127 77% 23% 107 96 90% 10% Geoscience 28 17 61% 39% 29 59% 41% Mintek 91 77 85% 15% 88 82% 18% SDT 21 81% 19% 16 76% 24% SADPMR 100% 0% 23 19 83% 17% MHSC 11 8 73% 27% 9 7 78% 22% MHSI* 36 22 86% 14% I:\MN2015\[0132 BRRR input information 2015.xlsx]compare_15 The Auditor General has stated [0129] that a level of non-achievement of planned targets above 20 per cent is not acceptable and suggests weaknesses in the strategic planning process. CGS (2012c). * Not strictly comparable between the 2 periods due to changes in indicators ** Same as Programme 2 of DMR report

3 entities had unplanned deficits/losses Names of Entities: Mintek SA Diamond & Precious Metals Regulator (SADPMR) Mine Health and Safety Council (MHSC) Council for Geoscience (GCS) The State Diamond Trader (SDT) Source: D:\MNWDx\Mar15x\MN2015\[0132 BRRR input information 2015 current.xlsx]compare_15 $C$42 # Auditor General (2015:4) * "2014/15 Budget" figures are those tabled in Budget 2014 - National Treasury (2014a*) # Auditor General (2015:4) * "2014/15 Budget" figures are those tabled in Budget 2014

General Concerns Need for details on the number of section 54 and 55 orders (MHSA) in the Annual Reports, as in the past. Policy clarity on how the mining legislation will be used to promote mineral beneficiation. Need for performance measures on the granting of rights to minerals and SAMRAD. Need for an annual report from the Environmental Mineral Resources Inspectorate. This could follow the excellent model of the Mine Health and Safety Inspectorate.

Custodianship of mineral resources – overall assessment Support needed Corrective action needed Ranked from best to “least best” I:\MN2015\[0132 BRRR input information 2015 current.xlsx]chart-15

Thank you Dr Martin Nicol Researcher: Portfolio Committee on Mineral Resources Research Unit, Parliament of South Africa 021 403 8331 (Tel) 021 403 8118 (Fax) 082 554 9880 (Cell) Office location: 1/068

References Nicol, M. (2015) Department of Mineral Resources Annual Report 2014/15 Analysis. Research Unit, Parliament. 07 October. [0223] Nicol, M. (2015) Analysis on vacancies and filling of posts in the Department of Mineral Resources (DMR). Research Unit, Parliament. 23 September. [0219] Nicol, M. (2015) Vote 32: Department of Mineral Resources—Research Inputs for the 2015 Budgetary Review and Recommendation Report (BRRR): Assessment of progress with legislative amendments and policy development for mineral resources – October 2015. Research Unit, Parliament. 12 October [0226]