SPECIAL PRESIDENTIAL PACKAGE FOR DISTRESSED MINING COMMUNITIES IMC INTERVENTIONS IN MINING TOWNS PROGRESS REPORT TO THE HUMAN SETTLEMENTS PORTFOLIO COMMITTEE ACTING DIRECTOR- GENERAL: M. TSHANGANA 08 SEPTEMBER 2015 Confidential

Presentation Outline  Implementation Framework for a Sustainable Mining Industry – “The President’s Meeting with the Mining Sector”  Human Settlements Component and Operational Model  Current Human Settlement Project Challenges and Mitigation Measures  Progress: Planning for Informal Settlements Upgrading  Spending and Financial Contributions in Mining Towns  Partnerships with Mining Companies  Human Settlements Mining Towns Analysis and Proposed Strategy Interventions  Marikana Ext 2 Project  Human Settlements Communications Strategy for Mining Towns  Operation Mining Phakisa  Mining Towns Benchmarking Study Tour to Australia  Recommendations Confidential

Implementation of the Framework Agreement for a Sustainable Mining Industry – “The President’s Meeting with the Mining Sector”  On 8 September 2015, the President will meet with the Mining Sector to discuss progress with regard to the implementation of the Framework Agreement for a Sustainable Mining Industry  Human Settlements commitments and actions in the Framework Agreement – “to accelerate efforts to upgrade human settlements in mining towns and improve the living and working conditions of mineworkers” Key challenge for human settlements: housing remains a challenge in the 15 prioritized mining towns – focus will have to be on infrastructural bulk services Key recommendation for human settlements: a Government Human Settlements Mining Towns Strategy is being developed - linked with the housing subsidies and grants offered to mineworkers by the mining companies.  Focus will have to be on partnerships between government (sector departments, e.g. human settlements, water and sanitation, trade and industry, economic development, small business development), mining companies and private sector 3

Operational Model For The Human Settlement Intervention Transformation of mining towns: Integrated sustainable human settlements Fast-track Existing planned projects Enhance existing capacity and work underway Align & support other gov department initiatives Identify gaps & further work/proje cts required Municipal/ province/n ational planning alignment Integration / alignment of various initiatives required to ensure overall transformation in the mining towns Linked to NDP & Master Spatial Plan of H/settlements These two components will be specific & key to transformation of the mining towns This work is currently underway…

From the National Department of human Settlements to all Provinces & Municipalities Reporting back to IMC 1. Programme management Per province and at the level of each identified mining town/municipality Supporting current projects 2. Provincial & Project level technical & capacity support Operational Model For The Human Settlement Intervention The National Department of Human Settlements will be putting in place Two key components to ensure proper implementation & oversight of the mining towns intervention: Operational model based on lessons from existing mega- project interventions (e.g. N2 Gateway/Zanemvula)

Challenges / Issues In Mining Town Projects Human settlement project challenges/issuesMitigation measures Lack of planning and pipelining of projects – both provincial and municipal level – projects & infrastructure funding and implementation not aligned Total 5 year project pipelines being developed / collected in all mining town areas Incorporated into transformation planning work and ISU/NUSP work ISU not prioritised in planning of provinces / municipalities All ISU assessed, except Steve Tshwete and project prep work underway NDHS requires that provinces prioritise and include these projects in plans and monitors Capacity at municipal level for planning & implementation given complexities Additional technical capacity being put in place from HDA, PRTs, DBSA to address this Dedicated oversight structures for mining towns intervention – in place in Fstate, NCape and LP. Gauteng being formed HDA working with provinces and municipalities to get these set-up Have engages with DMR and DPME to assist with this NRRT to assist with this Negotiations with mining companies – land donations, hostel donations – engaging different spheres Different spheres brought together to talk to mining companies together DMR advised / updated / alerted/involved in engagements Proposals considered in context of transformation plans Technical / transaction advisory assessment of proposal

Challenges / Issues In Mining Town Projects Human settlement project challenges/issues Mitigation measures Consultation and communication with “communities” – involvement of all role players (community/unions/employees/employers/g overnment) and community unsettlement Communication strategy being finalised and implemented for mining towns NRRT Social facilitation support strategy for all mining towns Access to traditional authority land and servicing and title on traditional authority land IGR units planning and engagements with traditional authority Specific land challenges raised with RDLR for assistance To be included in Communication strategy / stakeholder engagement Application of policy to address complexities of integrated projects LoA position paper Human settlements strategy for mining towns Rental housing policy exemptions being considered

Human Settlement Project Update Project name & location Dept.BudgetTimeframeProgressKey Challenges Unblocking measures TotalSpentPlanned startPlanned end Refer To Excel Spreadsheet

Based on the rapid assessment informal settlements are categorised as follows: A: Full Upgrading = Rapid Formalisation, full services. B 1: Interim basic services = Provision of interim services leading to eventual formalisation B 2: Emergency basic services = Provision of emergency basic services BUT leading to eventual relocation C: Rapid relocation to a site which is already available or imminently available Progress: Planning for Informal Settlement Upgrading Province & Municipality Total Number of Informal Settlements within Municipality NUSP Priority informal settlements Categorisation of the settlements after rapid assessments (July 2015) AB1B2Ctbc North West Rustenburg Madibeng Moses Kotane Matlosana4412 Free State Matjhabeng Moqhaka55 14 Limpopo Greater Tubatse Elias Motsoaledi Lephalale221 1 Fetakgomo11 1 Thabazimbi Mpumalanga Emalahleni12 39 Steve Tshwete88 8 Thaba Chweu77 61 Gauteng Westonaria Randfontein Merafong10 Mogale City Totals

Capital Subsidy Funding & Expenditure 2015/16 Mining Towns 2015/16 ProvinceMunicipality Annual Targets Delivery Performance as at 30 June 2015 SitesUnits Funds Allocated (Gazetted) Funds Allocated (As per BP SitesUnits Expenditure R'000 % Free State Matjhabeng Total Gauteng Merafong City Randfontein Westonaria Total Limpopo Thabazimbi Greater Tubatse Elias Motsoaledi Lephalale Fetakgomo Total Mpumalanga Emalahleni Steve Tshwete Thaba- Chweu Total Northern Cape Tsantsabane Ga-Segonyana Gamagara Kgatelopele Total North West Kgetleng Rivier Madibeng Moses Kotane Rustenburg Matlosana Total Grand Total

Loan Funding Provided In Mining Town Areas - RHLF Rural housing loan fund (RHLF) loans provided in SPP mining areas (as at end March 2015) SPP Province & Municipality No. of loans provided per municipality Total value of loans per municipality (Rands) No. of loans per province Total value of loans per province (Rands) North West Rustenburg Moses Kotane Kgetlengrivier Free State Moqhaka Limpopo Greater Tubatse Elias Motsoaledi Fetakgomo Thabazimbi Mpumalanga Emalahleni Northern Cape Kgatelopele Gauteng Westonaria Randfontein Labour sending areas OR Tambo DM Zululand DM Alfred Nzo Total All RHLF loans are used for incremental housing purposes Most incremental housing loans are in labour sending areas

Loan Funding Provided In Mining Town Areas - NHFC National Housing Finance Corporation (NHFC) loans provided in SPP mining areas (as at end July 2015) SPP Province & MunicipalityType of project / loan No. of units delivered Value of loans per municipality (Rands) Value of loans per province (Rands) Free State MatjhabengMortgage loan Gauteng Merafong CityMortgage loan RandfonteinOwnership “Space” Mortgage loan WestonariaMortgage loan Mpumalanga EmalahleniMortgage loan Social Housing Steve TshweteMortgage loan North West Madibeng Moses Kotane RustenburgFLISP Mortgage loan Total No loans provided in Limpopo as yet.

Loan Funding Provided In Mining Town Areas - NURCHA NURCHA provides bridging finance to small, medium and established contractors, building low and moderate income housing and related community facilities and infrastructure NURCHA’s Affordable Housing lending programme is targeted at residential developers while Subsidy Housing lending programme is meant for contractors awarded contracts by National, Provincial, and Local spheres of government. NURCHA Bridging loan funding provided in SPP areas as at end July 2015 AFFORDABLE HOUSING PROGRAMME SPP Province & MunicipalityNo. of loansValue of loansWhat loans are used forProject Status North West Rustenburg1R23m405 sectional Title Units Application on hold due to possible retrenchments in the mining industry. Mpumalanga Emalahleni6R66,3 million593 houses & 128 Sectional title units in DuvhaProjects complete Steve Tshwete1R6,3 million51 houses Project commenced during May 2015 – 40% of the servicing complete. Total for this programme8R95.6 million1 177 Units SUBSIDY PROGRAMME ProvinceNo. of loansValue of loansWhat loans are used forProject Status North West Rustenburg1R of subsidy housing unitsIn progress Matlosana1R subsidy housing units.Completed Free State Matjhabeng1R subsidy housing units.In progress Mpumalanga Emalahleni1R subsidy housing units.Completed Labour sending areas OR Tambo DM1R subsidy housing units.In progress Alfred Nzo3R subsidy housing unitsIn progress Total for this programme8R subsidy housing units

Social Housing Planning & Implementation SOCIAL HOUSING REGULATORY AUTHORITY - MINING TOWNS SOCIAL HOUSING PROJECT PIPELINE (as at end July 2015) NAME OF PROJECTDELIVERY AGENTACCREDITATION STATUS NO OF SOCIAL HOUSING UNITS RESTRUCTURING ZONE Mpumalanga Klarinet Phase 2Emalahleni SHIConditionally accredited Part of mega-project Palm Island Steve Tshwete Housing Association Conditionally accredited44Steve Tshwete Vila Avante Steve Tshwete Housing Association Conditionally accredited45Steve Tshwete Njala nad Crown Court and Ferreira Steve Tshwete Housing Association Conditionally accredited44Steve Tshwete MashisingMbombela Housing AssConditionally accredited208Not yet Ismael Gandi Steve Tshwete Housing Association Conditionally accredited Steve Tshwete North West EllatonMmanapendlo SHIConditionally accredited576Klerksdorp West Flamwood Imbani/Innovative Strategy Inv Private delivery agent1168Klerksdorp West Marikana housing projectLockeport Projects (Pty) LtdPrivate delivery agent392Marikana cluster Marikana Housing ProjectYamonate TrustPrivate delivery agent500Marikana cluster Westonaria BorwaGolden West SHIConditionally accredited205Not yet Limpopo LephalaleISI PropertiesPrivate delivery agent608Not yet Total 4131

Social Rental Housing Implementation Issues: Resolve Restructuring zones in mining town areas Project packaging and preparation work required on project pipeline so that implementation can commence CRU and affordable rental projects not captured Rental housing market dynamics in mining towns – job loses in the sector Social Housing Planning & Implementation

Partnerships with Mining companies Partnerships being concluded with: – Anglo Platinum – Thabazimbi – 400ha land donation for ISU/FLISP project – Lonmin – Marikana – BHP Billiton – Hotazhel, Steve Tshwete Partnership project proposals received via catalytic projects:  Assessments have been concluded  Recommended projects submitted to the Minister of Human Settlements for consideration and consultation with MECs, HODs, sector departments and private sector role players

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13 May 2015 Distressed Mining Towns - Human Settlements - DRAFT STRATEGY Slide 18 Mining Town Analysis and Strategy Five Human Settlements Strategic Clusters SC#Strategic Cluster Description Local Municipality Main Urban Centre District MunicipalityProvince 1 Poor homeownership investment conditions and worsening Human Settlements crisis. Traditional land administration significant Greater TubatseBurgersfortGreater Sekhukhune (DC47)Limpopo 2 Reasonable homeownership investment conditions and significant Human Settlements crisis challenges. Traditional land administration significant MadibengBritsBojanala (DC37)North West Rustenburg Bojanala (DC37)North West 3 Reasonable homeownership investment conditions and significant informal housing conditions and basic service connection backlogs. No traditional land administration. MerafongCarletonvilleWest Rand (DC48)Gauteng MatlosanaKlerksdorpDr Kenneth Kaunda (DC40)North West Mogale CityKrugersdorpWest Rand (DC48)Gauteng MatjhabengWelkomLejweleputswa (DC18)Free State Westonaria West Rand (DC48)Gauteng EmalahleniWitbankNkangala (DC3)Mpumalanga 4 Reasonable homeownership investment conditions and limited Human Settlements crisis challenges. No traditional land administration Steve TshweteMiddelburgNkangala (DC3)Mpumalanga Randfontein West Rand (DC48)Gauteng 5 Poor homeownership investment conditions and significant basic service connection backlogs. Traditional land administration significant FetakgomoApelGreater Sekhukhune (DC47)Limpopo LephalaleEllisrasWaterberg (DC36)Limpopo Elias MotsoalediGroblersdalGreater Sekhukhune (DC47)Limpopo Moses KotaneMogwaseBojanala (DC37)North West

Mining Towns Strategy – Understanding the Property Markets 22 Mining Towns, 6 Provinces: Matjhabeng, Mogale City, Randfontein, Westonaria, Merafong City, Ephraim Mogale, Lephalale, Elias Motsoaledi, Greater Tubatse, eMalahleni, Steve Tshwete, Rustenburg, City of Matlosana, Moqhaka, Thaba Chweu, Tsantsabane, Thabazimbi, Gamagara, Ga- Segonyana, Moses Kotane, Kgetlengrivier and Madibeng Intent: Understand housing markets: measure growth, see trends, consider opportunities, measure vulnerabilities Identify opportunity: prioritize sites and new programs, leverage growth, promote rental Identify policy implications: connect policy focus and local housing market conditions Entice appropriate private sector investment: mines, lenders, new partners

Mining Towns Strategy – Understanding the Property Markets One Town, Three Markets 20 Most common settlement pattern Result of intentional planning, not organic growth Privately traded: High sales prices High bonded rates High transactions, incomes Centrally located Government sponsored: Few sales, low sales prices Low bonded rates Low incomes Widely disbursed Informal settlements: Few/no registered properties Most often near mines or Govt-sponsored housing High density, low incomes

Mining Towns Strategy - Transformation Planning Human settlement transformation plans drafted and being consulted for: – Ncape – Lephalale/Thabazimbi – Sekhukhune – Matlosana Human settlement transformation plans = basis to focus, target, plan, implement and quantify impact of human settlements component of mining towns intervention Basis for Restructuring Zone (social rental housing) and “PHDA” - assist to fast-track human settlement development

Marikana Ext 2 Project - Background  Lonmin donated a 50ha portion of land with 860 serviced sites known as Marikana Ext 2 to Rustenburg LM for development of houses in October 2013  Extensive planning processes were under taken that resulted in the decision of densification of the area is to yield 2600 units. The units will be spread amongst the four housing programmes namely Breaking New Ground (BNGs), Community Residential Units (CRUs), Social Housing and FLISP in order to develop an integrated and sustainable settlement whilst addressing the huge housing backlog in the greater Marikana area  Town planning processes to encompass the densification have been completed and approved  The Department of Local Government and Human Settlements has in turn provided subsidies and appointed developers for the first phase of the development that will see the construction of 292 BNGs and 252 CRUs. Construction is underway and the expected completion is December 2015  However the project has had numerous challenges ranging from work stoppages by subcontractors, community and pending threats of illegal occupation by mineworkers  The Portfolio Committee for Public Administration and Monitoring and Evaluation and the Select Committee for Social Services visited the Marikana Ext 2 project in August 2015, as part of the oversight of the mining town projects reported by DPME.

Marikana Ext 2 Project – Layout of Land BNG CRU BNG

Marikana Ext 2 Projects - Policy Allocation and Qualification Criteria Case-In-Point – Marikana Ext 2 BNG / CRU Projects: agreement between the mine, province and Rustenburg municipality = the project will benefit the entire community, including mine workers BUT In terms of policy prescripts, mine workers do not qualify for the BNG units, and are earning way above the policy income-band threshold for CRU UNINTEDED CONSEQUENCES? Tension between the community and the mine workers as well as planned invasions of CRU’s by the mine workers CRU in August BNG in August

Marikana Ext 2 Projects – Options for Housing Policy Allocation And Qualification Criteria How do we fix this? Option 1: Policy exemption for the CRU project – but this will create a policy precedent and all projects will start requesting the exemption; Option 2: Declaration of the area as a “Priority Housing Development Area” (PHDA) in terms of HDA Act - policy exemption based on this declared area status. This will limit the potential policy abuse of option 1; Option 3: Development of the further project phases to accommodate mine employees Option 4: Conversion of the CRU project to rental housing - exemption in terms of the rental housing policy parameters – would be most viable option to address current mine-worker housing needs and mitigate invasion risk;

Marikana Ext 2 Project – Pilot Project for a New Rental Housing Delivery Model in Mining Towns A recommendation has been made to the Minister of Human Settlements to provide an In-Principle Approval to use the Marikana Ext 2 Development as a pilot project to test the implementation of a new Rental Housing Delivery Model in Mining Towns. This will entail:  Conversion (through special Ministerial exemption) of the CRUs into rental units that can accommodate mine workers;  Negotiations with Lonmin to ensure that rental payments are linked to Living Out Allowances and salaries to be deducted directly from the mining company’s payroll;  Engagements between Rustenburg Local Municipality and Lonmin to determine rental amounts to be paid by mine workers (ratios of rental payments for mineworkers versus CRU beneficiaries);  Institutional arrangements for rental collections – payroll deductions directly from Lonmin to Rustenburg Local Municipality;  Institutional arrangements for the management of the rental stock – to be managed by a state institution, e.g. the Rustenburg Local Municipality - currently managing other state-owned rental stock in Rustenburg.

Key Implementation Enablers for the Marikana Ext 2 Project Strong presence of the national department in the province - to provide advisory, technical and oversight support Dedicated program management support to provinces/municipalities - strengthening capacity of the HDA as program management support agent Strong provincial project level technical assistance and support - deployment of multi- skilled Professional Resource Teams Policy review on qualification criteria and allocation in to provide better housing options for mine workers Communication Strategy and Social Facilitation Plan Continuous stakeholder engagements with all stakeholders and the urgent need for security on-site in order to avoid invasions The establishment of a Project Steering Committee and utilization of existing community structures to communicate project-specific issues Stakeholder alignment to ensure good packaging of projects Clear demonstration of the role of other government departments in restoring dignity in Marikana (e.g. DWA, EDD,DEA, DRDLR, COGTA, DOT, etc)

Infrastructure Partners in Mining Towns Including Marikana NDHS, DBSA and Agencies partnering to facilitate and support and – fast-track infrastructure provision in mining towns – access technical capacity in these areas – Utilise networks and partnerships of DBSA for the benefit of housing provision DBSA will be part of the Marikana project given existing work that they are doing in the area – Master planning

Stakeholder Engagement & Communication for Mining Towns Draft Communication Strategy developed. The communication strategy focuses on Human Settlements intervention as a way of fast-tracking existing projects pipeline in mining towns. The focus is also to support the development & implementation of specific Human Settlement transformation plans in each mining town Deputy Minister to visit projects in September 2015 Visits and consumer education programmes provided by Housing Entities Build up activities in August 2015 linked to Marikana

Communication Objectives To communicate the purpose and expected outcome of the Special Presidential Package (including the Framework Agreement for Sustainable Mining Communities; and the Revitalisation of Distressed Mining Communities), including milestones To profile progress made in implementing the Special Presidential Package:  To report on progress made per milestones  Demonstrate visible achievements: improved socio-economic conditions of mine communities ; integrated and sustainable human settlements; improved working conditions of mine workers  To highlight challenges and communicate measures in place to address challenges To involve all stakeholders, including affected communities so that implementation and communication becomes an integrated effort

Key Messages of the Communication Strategy Together we move South Africa forward Growing the South African Economy through a sustainable mining industry (Nine-Point Plan). To advance the country we need sustainable mining sector. We are implementing plans that will improve the lives of communities. Responsible partnerships and strong leadership by all is the key to sustainable mining.

Target Audiences of the Communication Strategy South African public All platforms guided by the preferences: - On-line communication including social media. - Mainstream media - Radio - a preferred platform to access information. Affected Mining sector and communities All platforms will be used – especially those that are specific and targeted to the communities: - Community Media (Radio and Print). - Izimbizo - African language stations - Flyers MineworkersCooperation with employer to sought with employers to ensure use of existing channels of communication in the work place. Labour Sending Areas All relevant platforms will be used - Community Media (Radio and Print) - Community meetings – leverage on Municipal Councilor/Traditional Leadership meetings. MediaMedia is a critical partner in the multi-step flow of information to the rest of stakeholders and the public and in this regard various platforms will be utilized including: - media releases, media tours, special briefings, fact sheets & information sharing

Operation Mining Phakisa - Background  Mining Phakisa has been formally announced by President Zuma and the objective of the Phakisa is about building partnerships between government and key stakeholders in the mining sector so as to unlock investment and transformation  Cabinet has endorsed the hosting of the actual Mining Phakisa Lab in October Six key themes or work streams have emerged for the Mining Phakisa Lab and will require further consultation. This includes:  Up-Stream linkages and Capital Equipment sector that supports the mining sector  Beneficiation of both bulk resources and precious metals  Social and community development – with a particular emphasis on housing  Increasing exploration activities, including enabling initiatives by the state such as more detailed geo-scientific information  Enhancing the Research, Development and Innovation cluster  Holistic modernisation planning and implementation

Specific Human Settlements Aspects for the Mining Phakisa Lab 34 Integrated approach/progra mme for human settlements in mining town Focussed human settlements implementation plan in each mining town and related issues to be dealt with Viable property markets Project specific implementation solutions Specific projects Funding, tenure, migrancy, planning-land, policy matters, restructuring zones, SHis Local government Capacity, governance, will Financing Sustainability Dysfunctionalities…

Key “Wish List” From The Mining Phakisa Lab Project specific - funding (dedicated/ring-fenced, multi-year) Political will is required and key Parallel, multiple approvals across spheres of government to enable fast-tracking/implementation (using the model of the 2010 World Cup projects) Escalation mechanisms when planning and implementation approvals are delayed by a sphere of government 35

Benchmarking Study Tour to Australia  The Study Tour (24-28 Aug) was part of a broader activity, supported by the Australian Government and led by DPME titled ‘Rapid Appraisal of the Policy and Regulatory System Governing the Mining Sector: Benchmarking Performance in Australia, Chile, South Africa and Zambia’  A key output of this activity is a Benchmarking Study examining the policy and regulatory systems governing the mining sector in the four countries, focused on the following key technical areas: housing; commuting; health and safety; workplace culture; mineworker remuneration and, socio-economic development in mine-impacted communities 36

Benchmarking Study Tour to Australia  Participation:  Ministers: Presidency and Labour  Deputy Minister (Labour)  Members of Parliament: Chair and one member of Portfolio Committee for Public Service and Administration / Planning, Monitoring and Evaluation)  Senior government officials (DPME, NDHS, HDA, DMR, DOL, DOH)  A Symposium will be held on the 16 September 2015 where findings of the Benchmarking Study and Study Tour and Key Recommendations will be presented to South African Government stakehold ers 37

Recommendations It is recommended that the Human Settlements Portfolio Committee : Notes the overall progress report on human settlements interventions regarding the revitalization of distressed mining communities Specifically notes the recommendation made to the Minister of Human Settlements to consider the Marikana Ext 2 Housing Development as a pilot project to test a New Rental Housing Model in Mining Towns

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