1. BRIEFING BY THE DME ON LEGISLATIONS AFFECTED PROVINCES SINCE 1999 AND HOW IT AHS IMPACTED ON THE PEOPLE OF SOUTH AFRICA
25 October 2006

2. OUTLINE OF PRESENTATION
INTRODUCTION OF THE DELEGATION
BACKGROUND
ENERGY LEGISLATION
Nuclear
Electricity
Hydrocarbons
MINING SECTOR LEGISLATION
MPRDA
Mine Health and Safety
Q & A

3. Introduction of DME officials
Ms N Magubane – Acting Director General
Mr N Gumede – Acting DDG: Hydrocarbons and Energy Planning
Mr J Erasmus – Acting Chief Inspector of Mines
Ms D Ntombela – Chief Director: Mineral Regulation and Administration
Mr T Maqubela – Chief Director: Nuclear Energy
Ms T Zungu – Chief Compliance Officer
Adv M Mononela – Chief Director: Mineral Policy
MR M Zondi
Mr J Raphela – Office of the Director General
Mr G Mfetoane – DD: Legal Compliance and licencing
Ms P Ntsaluba – Office of the DG

4. Background
Mandate of the DME is the “Provision of services for effectual transformation and governance of minerals and energy sectors for sustainable development, thereby improving the quality of life”
It is important to note that DME legislation is pillared on three White Papers
Energy Policy
Minerals and Mining
Renewable Energy
Besides legislation, there are some major policy interventions and programmes that were introduced since 1999, that had a visible impact on the lives of the people of South Africa.

5. Legislation passed since 1999
National Nuclear Regular Act
National Energy Act
2002
Gas Act
Mineral and Petroleum Resources Development Act

6. DME legislation since 1999 2003 Petroleum Pipelines Act
Petroleum Products Amendment Act
Mining Titles Registration Amendment Act
2004
National Energy Regulator Act

7. DME legislation since 1999 2005 Precious Metals Act
Diamonds Second Amendment Act, 2005
Mineral and Energy Laws Amendment Act
Petroleum Products Amendment Act

8. National Nuclear Regulator Act
Act came into force in February 2000
Act provides for the protection of persons, property and the environment against the risk of nuclear damage
It has helped improve the governance of the safety of the nuclear facilities – (Previously one Act Governed both Safety and the promotion of Research and Development)

9. NNR Act – Impact on provinces
Improved protection of workers, members of the public and the environment.
NNR has a multi stakeholder Board including representatives from business, labour and affected communities.
This piece of legislation has assisted in creating regulatory certainty on matters relating to nuclear energy, from licencing of nuclear installations, transportation of nuclear material, through to nuclear vessels visiting South Africa.

10. Nuclear Energy Act, 1999 (Act 46 of 1999)
This Act was passed in 1999 and came into force in February 2000, laying the basis for the establishment of the NECSA.
It provides the Minister with powers in terms of nuclear non proliferation. Also the power over the Management of Radioactive Waste.

11. Nuclear Energy Act cont.
The involvement of the Minister in decision making has political oversight over the activities of the organisation to ensure that strategic issues can be taken on board, such as energy mix.
Previously the then AEC operated with limited political oversight and the CEO had powers to approve export and Import of Nuclear Material – This power is now with the Minister in consultation with the South African Council for the Non Proliferation of Weapons of Mass Destruction.

12. Nuclear Energy Act’s impact on Socio Economic development
Due to a change in the mandate of NECSA, they now have a focused mandate with a clear separation of the business as well as institutional obligations. For example, provision of radioisotopes for use in nuclear medicine is part of business activities, whereas Radio Active Waste management is part of the institutional obligations.
The isotopes are also helping in our health sector by reducing the amount of invasive medical surgery.

13. Nuclear Energy Act’s impact on Socio Economic development
The stipulation for NECSA to collaborate in nuclear technology matters has led to NECSA undertaking missions to other African countries to improve the management of nuclear materials in those countries.
NECSA’s mandate of promotion of nuclear research has also led to the SAFARI reactor being used for purposes of Research by students from various institutions of higher learning.

14. National Energy Regulator Act
April 2002: Cabinet Approved a Multi-Sector Regulator
Electricity
Gas
Petroleum Pipelines
DME Undertook Study to Ascertain How Best to Give Effect to Cabinet’s Decision
Signed by President into Law in March 2005

15. National Energy Regulator Act
Electricity Act
No 41 of 1987
Gas Act
No 48 of 2001
Petroleum Pipelines Act
No 60 of 2003
Regulator
Establishment
Regulator
Establishment
Authority
Establishment
Matters
Pertaining to
Licenses
etc
Matters
Pertaining To
Licenses
etc
Matters
Pertaining
To Licenses
etc

16. Impact of legislation
The legislation came into effect during 4th quarter of 2005
The legislation reduced the number of additional energy regulators
Through synergies, there has been improved efficiencies
Competing energy carriers need even treatment e.g. gas and electricity
Cost savings
Staff shared
Regulators shared
Shortage of regulatory skills
Transparency – anyone can make representations

17. Gas Act Previously mainly an unregulated monopoly
2 Agreements negotiated with SASOL - appended to Gas Act
To diversify energy supplies
Provides “rules of the game” for investors
First gas from Mozambique arrived Feb 2004

18. Benefits of Gas Act New investment
Lower production costs more efficient economy = more jobs
More competition among energy carriers – downward pressure on prices
New energy source – new activities possible – more jobs
Environment - cleaner burning fuel – healthier living conditions
NEPAD project

19. Petroleum Pipelines Act
Petroleum pipelines are key arteries of economic lifeblood for the interior
Traditionally provided by the state.
Now are “rules of the game” for private sector investors as well as protecting the countries strategic concerns.
Previously operators set own tariffs – will now be regulated
Should lower inland fuel prices

20. Petroleum Products Amendment Act
Liquid Fuels Empowerment Charter 2000 – voluntary
Now part of PPA
A stepping stone in process of managed liberalization – protection of jobs and small business
Provides for the licensing of petroleum activities and related matters.
The PPA operationalised on the 17th March 2006.

21. Petroleum Products Amendment Act Government Imperatives
The process of drafting of the Petroleum Products Amendment Act informed by Government’s imperatives:
Minimising input costs into the economy
Managing Balance of Payment Account
Preserving jobs in the petroleum sector
Optimal use of capital
Promoting SMME’s
Promoting foreign direct investments
Protecting local industries (within limits)

22. Benefits of Petroleum Products Amendment Act
Industry transformation
More formalised regulation and licensing
Better information
Improvements to price regulation
Increased access to modern energy carriers by the low income households
Increased security of supply
Introduction of cleaner fuels
Protection of vulnerable investors

23. Electricity Regulation Act
Aims to improve regulatory framework for electricity generation, transmission, distribution
Why improve regulation?
Monopoly utility providers need to be regulated, so as not to take advantage at expense of end-users
Setting of tariffs
Setting of minimum service standards e.g. power interruptions
Provides for improved quality of supply thorough licensing, and penalties in event of breach
Provides legislative instrument to align utilities with government programme of action (BEE, SMME development, job creation and poverty alleviation)
How does this impact local, provincial government?
Clarifies security of supply mandate and hence accountability
Free basic electricity provision
Universal access to electrification
Process for setting of tariffs

24. Statistics

25. Challenges Province Total Number of Houses
Number of Houses Electrified
Percentage of Houses Electrified
Household Backlog Numbers
Percentage Household Backlog
Western Cape
1,269,986
1,103,791
87%
166,195
13%
Kwazulu-Natal
2,258,206
1,443,673
64%
814,533
36%
Gauteng
3,021,820
2,349,102
78%
672,718
22%
Eastern Cape
1,637,331
907,850
55%
729,481
45%
Free State
793,731
592,419
75%
201,312
25%
Limpopo
1,327,952
945,766
71%
382,186
29%
North West
824,115
646,115
178,000
Northern Cape
263,298
206,670
56,628
Mpumalanga
732,783
517,303
215,480
Totals
12,129,222
8,712,689
72%
3,416,533
28%

26. Challenges Managing and meeting community expectations
need to improve socio-economic impact
Job creation
Capacity building and HRD
Other non-energy benefits
Quality of supply needs to be of an acceptable standard
Lowering the cost of transacting electricity, particularly in remote areas
Maintenance of infrastructure installed more than 10 years ago is critical
Communities have responsibility to use energy efficiently, to minimise upstream impact at generation level

27. Mineral and Petroleum Resources Development Act, 2002
Promulgated and implemented with effect from 2004.
Since implementation two (2) critical implementation timeframes have come and gone, namely 1st year (for unused old order rights); and 2 years for old order prospecting rights.
The MPRDA has opened access to HDSA participation in mining industry
Facilitated BEE participation in the mining stake
Community participation in mining activities in their areas
Facilitated local economic development
Skills training and development of the workers in the mining industry
Encourage local beneficiation of minerals
Procurement
Targets for HR at senior management level

28. Benefits of the MPRDA
Benefits are not quantifiable due recent implementation, but the following indicate that there will benefits
Minerals have been unlocked
Increase in numbers of HDSA applicants and holders of rights
Socio-economic development plans as part of licensing

29. Impacts of the MPDRA Tools in place to measure future impact
Increased number of applications in Provinces indicate possible positive impact
Prospecting Rights (9 Regions)
Mining Rights (9 Regions)
Mining Permits (9 Regions)

30. CHALLENGES
Socio-economic development plans not in line with IDPs, PGDs
Integration with host/sending municipalities needs attention
Participation by local communities often challenged and/or questioned
Fronting – which has become sophisticated
Funding – especially for BEE
Low level of women participation
Monitoring versus Capacity

31. Statistics on mining applications
Received
Withdrawn
Rejected
Accepted
Granted
Refused
Pending EC
312 33 56
254 25 57
172 FS
635 21
170
461
149
130
182 GP
439 31 62
373 91
118
164
KZN
408 18 48
357 41
225 LP
1357 43
236
1100
390
215
495 MP
1923 66
285
1589
510
202
877 NC
1759 71 69
1649
421
335
893 NW
2350
1858
683
600
575 WC
477 17 79
398
102
100
196
PASA 1 27
Total
9708
363
1444
8066
2462
1798
3806
%age
100.0%
3.7%
14.9%
83.1%
30.5%
22.3%
47.2%

32. Mining Titles Registration Amendment Act
The Act effected technical amendments to the registration of mining rights.
It therefore improved investor confidence in that the rights regime in South Africa is now more predicable, and certain.

33. Diamond Amendment Act
The Act creates a legal framework for the establishment of the State Diamond Trader, Diamond Export and Exchange Center, and replaces the SA Diamond Board with the Diamonds and Precious Metals Regulator
This is a new piece of legislation and implementation has not yet started

34. THANK YOU
QUESTIONS AND ANSWERS