PROGRESS REPORT TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON MINERAL RESOURCES: CIVIL AND GENERAL AND IKHWEZI QUARIES : 10 SEPTEMBER

PRESENTATION OUTLINE 1.Background 2.Civil and General (Pty) Ltd 3.Bert Bricks 4.Progress to date 5.Ikhwezi Quarries : Mdlankomo 6.Progress to date 7.Conclusion 2

BACKGROUND  Civil and General Contractors CC and Ikhwezi Quarries are holders of mining rights for Stone in the Eastern Cape Province  The PPC on Mineral Resources conducted a site visit to the Eastern Cape in January 2013 and the two companies were found to be non compliant with the Mining Charter.  The PPC made recommendations to the DMR which are reported hereunder 3

CIVIL AND GENERAL CONTRACTORS CC  Civil & General was a holder of an unconverted mining license which expired in April 2009 and the applicant failed to convert the license as contemplated in terms of Item 7 of Schedule II of the Mineral & Petroleum Resources Development Act (MPRDA) 2002, Act 28 of  Civil & General applied for a new mining right in August 2010  The mining right application was withdrawn in March 2011 and immediately thereafter the applicant re-lodged the application.  The old order mining right included the mining area, processing area, offices and all associated infrastructure.  The new mining right application excluded all the other areas and only focused on the mine: for the company to circumvent compliance with the mining charter ( Bert Brics case)  The new mining right application did not comply with the following areas of the SLP:  There were no learnership, bursary, portable skills and internship plans  Procurement progression was not addressed  No LED projects were identified  Employment Equity was not addressed  The mining right was refused in October

CIVIL AND GENERAL CONTRACTORS CC  In February 2012, the company appealed the decision and subsequently took the DMR to court for the refusal of the mining right  The DMR sought a legal opinion which advised the Department to issue the right as applied for in view of the Bert Bricks court judgment  The mining right was issued in April 2012 only complying with a commitment to :  Implement a Local Economic Development project to the value of R for the current Social and Labour Plan spread over 5 years (at R10 000,00 per annum)  The company’s SLP proposal remains unacceptable to the DMR and Lukhanji Local Municipality.  As at August 2014: the company employs 31 employees : 9 permanent and 22 contract workers (renewable every 6 months) 5

BERT BRICS COURT JUDGEMENT  The holder of the mining right had applied for a mining right and separated the brick making activities from mining operation and the right was granted as such  The Principal Inspector of Mines inspected the area and issued a statutory notice for the holder of the right to incorporate the brick making activities into mining operation  The court held that the Mine Health and Safety Act do not apply in the case of Bert Bricks (Pty) Ltd.  Implication: If a company has applied for a right separating mining activities from brick making activities or processing plant and the right has been granted as such, the DMR cannot impose the implementation of the MHS Act and MPRDA on the brick making activities or processing plant 6

PROGRESS TO DATE  The DMR issued a section 93(1)(a)(i) directive to the company in December 2013 for contraventions of the following:  Providing misleading information on the loan agreement of the HDSA partner: reporting that the HDSA partner has been empowered through a free carried interest whilst there is a loan agreement in place. Failure to submit the agreement to the DMR  Procurement: HDSA suppliers are not provided an opportunity to enter into the database of the company  Failure to implement the Social and Labour Plan : Company was instructed to lodge a revised SLP 7

PROGRESS TO DATE CONT:  The company responded to the section 93(1)(a)(i) directive in April 2014 and disputed the content of the directive  The DMR has been inviting the company to make representations on the dispute and the company has not been committal.  The company has complied with section 28 of the MPRDA: submission of annual report and the mining charter report. The company remains non compliant on:  Social and Labour Plan  Procurement  A compliance inspection was scheduled for 19 June 2014 and the company was not available for inspection ; 8

PROGRESS TO DATE CONT:  The DMR has been rescheduling the inspection since June and the company is not cooperating: the new date is 29 th September 2014  After 29 th September 2014: the DMR will implement a section 93(1)(a)(ii) of the MPRDA order for the company to suspend operations, followed by section 47 notice to cancel the Right. 9

IKHWEZI QUARRIES IN MDLANKOMO VILLAGE IN NYANDENI LOCAL MUNICIPALITY (OR TAMBO DISTRICT MUNICIPALITY)  The mining right was issued on 22 March  The mine started to operate in August  The company is 100% Black Owned  The mining right was issued with a Social and Labour Plan that did not address the needs of the community which lapsed in December 2013  A revised SLP was submitted on the 14/07/2014 for the five year term and its still under assessment in the department 10

IKHWEZI QUARRIES : COMPLIANCE WITH THE MINING CHARTER  The company has implemented a poultry farming project in the Nyandeni local municipality in OR Tambo district municipality costing R : this was a collaborative project with the Department of Social Development.  On 03/07/2014 the company complied with section 28 of the MPRDA (submission Mining Charter report and annual report) although the company remains non compliant on SLP  The community has raised the following issues:  Company ceased to pay surface rental to the Mdlankomo Community Trust Fund  Company failed to provide bursaries to engineering students in the community 11

PROGRESS TO DATE  Following the interventions by Portfolio Committee the following steps were taken:  A workshop was held on the 9 th May 2014 between DMR, Local Government and Traditional Affairs, Nyandeni Local Municipality, Mhlanga Traditional Council, Ikhwezi Quaries and Community members  The following transpired at the workshop:  The DMR presented on the legislative framework, the Mining Charter and the content of the mining right issued to Ikhwezi Quarries  The community raised their challenges with the company  The workshop resolved as follows:  The company must review its SLP commitments and consult the municipality and the community, and lodge (a new SLP) with the DMR : the SLP was lodged on the 14 th July 2014  The company must apologise to the community for failure to implement its SLP commitments 12

PROGRESS TO DATE  A follow up workshop was held on the 8 th September 2014 between the DMR, Local Government and Traditional Affairs, Nyandeni Local Municipality, Mhlanga Traditional Council, Ikhwezi Quaries and Community members, and the following was resolved:  The community has requested further training (through a workshop) and reviewing of the Mdlankomo Community Trust Fund  The Department of Land Reform and Rural Development (as custodian of The Trust Property Control Act) will be brought on board to conduct the workshop on 30 th September 2014 and the DMR will facilitate the workshop  The SLP submitted to the DMR on the 14 th July 2014 must still be consulted with the community and Municipality to develop sustainable community project on 30 th September

ACTION PLAN: 14 ACTIVITYRESPONSIBLE DEPARTMENTDUE DATE Training for community on the brick making activities from mining operation DMR: Coordinate workshop Department of Land Reform and Rural Development : to conduct training 30 th September 2014 Consultation and assessment of the submitted Social and Labour Plan Ikhwezi : To consult the community and Nyandeni Local Municipality on a sustainable community project DMR : To assess and approve the consulted SLP 30 th September TH October 2014 Monitoring of implementation of the approved SLP DMR6 months from date of approval of the SLP

CONCLUSION  Civil and General Contractors CC:  The company has not shown willingness to transform, implement the Mining Charter and become a stakeholder to the DMR;  The process of section 93(1)(a)(ii) and 47 of the MPRDA is being implemented.  Ikhwezi Quarries :  Once the Community Trust workshop has taken place and the reviewed SLP has been approved, progress will be monitored for the implementation of the SLP 15

THANK YOU Legislative amendments have been effected to both the NEMA and the MPRDA. Work in the different Task Teams of the IPIC is continuing. The three Departments are putting together systems for effective implementation of the integrated permitting system NEMA, NWA and the MPRDA amendment processes are being finalised for implementation of Option 2 of the Matrix. 16