Presentation on Vote 29: 2016 and the 2016/17 Annual Performance Plan of the Department of Mineral Resources (DMR) Template from: http://faranani.parliament.gov.za/main/unsecure/attachments/documents/APP%20PRESENTATION.PPT Draft prepared for the Portfolio Committee on Mineral Resources (PCMR), 15 March 2016 Martin Nicol - Parliamentary Research Unit 16 March 2016

The budget and APP of the Department of Mineral Resources Vote 29: Department of Mineral Resources The budget and APP of the Department of Mineral Resources Presentation prepared for the Portfolio Committee on Mineral Resources Martin Nicol – Parliamentary Research Unit 16 March 2016 Prepared by Martin Nicol, Researcher, Portfolio Committee on Mineral Resources from Research Unit, Parliament. (2016) Budget Analysis: Vote 29 - Mineral Resources. 09 March. and Nicol, M. (2016) Possible questions on the Department of Mineral Resources DMR Annual Performance Plan 2016/17. Research Unit, Parliament. 15 March. <draft>

Reference Points DMR APP 2016/17 Vote 29 2016 Mineral Resources DMR Strategic Plan 2014/19 Reference Points

Outline Reminder of the issues in the Mineral Resources: 2015 Budgetary Review and Recommendation Report (BRRR) Legislative issues in the DMR Strategic Plan 2014-19 Parliament’s analysis of Vote 29 is provided to members in writing. It is not ‘presented’ here as this would duplicate inputs from the DMR. Comment on 2016/17 APP Performance Measures Key issues for consideration by Parliament

Mineral Resources: 2015 BRRR PCMR raised one particular area where budget allocation of the DMR fell short of its needs in terms of the mandates it has been given by legislation. The future growth of the mining sector is dependent upon continued mineral exploration. A substantial national investment in geological mapping, of the order of R1-billion, is needed by the CGS to provide the knowledge base to attract exploration companies (and to assist the State Owned Mining Company in its exploration endeavours) This issue was raised also in the BRRR in 2014. There has been no response on this issue from Treasury.

Legislative and policy issues in 2016/17 Review the MPRDA (including its regulations) – this will follow the conclusion of the MPRDA Bill. Legislative establishment of the African Exploration Mining and Finance Corporation (AEFMC) - (the draft State Owned Mining Company Bill has now been published for public comment). Review of the MHSA (including its regulations) – the Bill is with NEDLAC Conduct socio-economic impact assessment of identified legislation. Review and implementation of updated Mining Charter, with a detailed explanatory memorandum. Develop the PASA Bill (PASA is the Petroleum Agency of SA – the regulator for the petroleum sector) Review Diamonds Act and Precious Metals Act. APP pages 20 and 84 Parliament’s role: Legislative Oversight

Slide from presentation by the Research Unit in October 2015 Progress impression - legislation and policy for mineral resources One Env System Ex mine workers Slide from presentation by the Research Unit in October 2015 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

Legislation and policy for 2016/17 from the new APP Progress impression - legislation and policy for mineral resources One Env System Ex mine workers Legislation and policy for 2016/17 from the new APP 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 Mining Phakisa

Performance Measures for Department of Mineral Resources Source: D:\MNWDx\Mar15x\MN2014\[0072 BRRR input information 2014.xlsx]AR analysis $B$72 Department of Mineral Resources (2016a) Annual Performance Plan 2016 – 2017. RP21/2016 Page 20 2016/17 changes follow a technical evaluation of the strategic objectives and measures of each branch and alignment with national imperatives.

Areas of concern Significant downward shift in targets for environmental verification inspections Annual target reduced by a quarter, from 1,700 to 1,275 There is an increase in the number of staff in the Environmental Mineral Resource Inspectorate but the budget for Management Mineral Regulation has been cut by a third in real terms. (R38m to R27m) No reporting framework as recommended in 2015 BRRR No performance measures for SAMRAD or the Women in mining strategy These were recommendations of the 2015 BRRR.

Two key issues for consideration by Parliament 2016/17 Urgency of dealing with the MPRDA amendments identified as a constraint by the National Planning commission in 2011. Need to promote transformation in the mining sector A key objective of the MPRDA Hard to judge the performance of the DMR in achieving this goal. Names of mines that were not compliant according to the 2015 Audit have not been revealed to PCMR

References Department of Mineral Resources (2014a) Department of Mineral Resources Strategic Plan 2014-2019 DMR (2016a) Annual Performance Plan 2016 – 2017. RP21/2016. DMR (2016s) Draft African Exploration Mining and Finance Corporation Bill, 2015: Publication of and invitation to comment on the draft. G.N.56. Government Gazette No.39615. 22 January. National Planning Commission (2012) National Development Plan 2030: Our Future – make it work. National Treasury (2016a) Budget 2015: Estimates of National Expenditure - Vote 29: Mineral Resources. RP:15/2016. [unabridged]. Available at: www.treasury.gov.za. [Accessed 25-Feb-16]. Nicol, M. (2016a) Analysis of the 2015/16 Third Quarter Performance and Expenditure report: Vote 29: Department of Mineral Resources. Research Unit, Parliament. 29 February. Nicol, M. (2016b) Possible questions on the Department of Mineral Resources DMR Annual Performance Plan 2016/17. Research Unit, Parliament. 15 March. <draft> Parliament (2015) Budgetary Review and Recommendation Report of the Portfolio Committee on Mineral Resources dated 20 October 2015. Announcements, Tablings and Committee Reports No 133─2015. 20 October. Pages 3911 to 3937. Research Unit, Parliament. (2016) Budget Analysis: Vote 29 - Mineral Resources. 09 March.