Annual Performance Plan briefing of Department of Mineral Resources and Energy

Meeting report

The meeting was not listed on the z-list and PMG was not present. The below is compiled based on the Committee’s official minutes

The Chairperson opened the session at 09h30, noting apologies and proceeded to outline the agenda for the day, which was attending to presentations on the Annual Performance Plan (APP) and budget of the Department of Mineral Resources and Energy (DMRE). The Chairperson acknowledged the apologies of the Minister and Deputy Minister and requested the Department to proceed with the presentation.

Briefing by the Department of Mineral Resources and Energy (DMRE) on their APP and Budget Vote No 34

Members of the Committee raised concerns about the lack of political leadership at the meeting, citing that they would be unable to engage with the Executive on a political level. A compromise was reached by all parties present with the understanding that questions of a political nature or questions to be posed to the executive would be done at a later time when the secretariat re-scheduled another meeting with the Department.

After the presentation, Members raised questions pertaining to the rationalisation of State-Owned Entities as well as the re-evaluation of their mandates, progress on the establishment of the Strategic Fuel Fund, the position of the Mining Charter towards BEE in the exploration field, how SME’s are involved/included in the Minerals and Energy policy development, backlogs in the processing of mining licenses, and the rehabilitation of mines, especially asbestos Mines. The Department was also questioned on the outcomes of the investigation into four corruption cases reported to the Committee the year before, the merger of the two departments (Minerals and Energy) and its effect on staff morale, updates on the proposed nuclear procurement plan, DMRE mine inspections and monitoring of social and labour plans. The Department in its presentation stated that it is targeting 100% elimination of fruitless, wasteful and irregular expenditure by 2024. The Committee wanted to know why this target is not an annual requirement rather than a medium-term target. On slide 12, the Department states that it is going to implement a framework for a just transition to a low carbon economy by 2022. Why has the Committee not been briefed on this framework to date? The Department was requested to provide the Committee with details on the framework, especially how the Department plans to balance a transition to a low carbon economy with a continued focus on opportunities in coal, oil and gas exploitation. On slide 23, the Department listed the target of 120 Social and Labour plan development projects that have been completed. The Department was asked to highlight what the impact of these projects was and what the lasting benefits have been ensured through these projects.

Slide 28 of the presentation lists the follow target for programme three as “Report on economic viability of shale gas exploration in South Africa produced”. The Department was requested to provide a timeline for the completion of the report, and when the report will be released to legislatures and to the public for scrutiny. Slide 38 of the presentation listed targets of programme five which were linked to the Department targeting the rehabilitation of only three derelict & ownerless mines. The Committee found this to be problematic, considering that there are over 2 000 such mines that still have to be rehabilitated. The question raised was, is the Department doing enough to address not only derelict & ownerless mines but also the associated risk of Acid Mine drainage? The Committee questioned whether or not the DMRE will reach country targets on a just transition if coal and oil use is further increased. The Department’s targets for proposed renewable energy proposals is 4200MW over two years, but the target for coal and oil is 4500MW. The Department does not appear to be reducing its dependence on fossil fuels in this programme.

The Department in their response, stated that the rationalisation process of SOEs currently lies within the Presidency with the Department assisting in certain areas. With regards to the backlog of mining licenses, the DMRE stated that last year the number stood at over 5 000 with the current number being just below 4 000. The DMRE informed the Committee that besides the Covid pandemic, other reasons for the slow progress were incorrect, incomplete and lack of documentation as well as illegal activities that would require staff to investigate hence not assisting with clearing the backlog. The Acting DG reiterated that the department aims to finalise the implementation of 120 Social and Labour Plans by the end of 2022. These S&LP plans benefit local communities, as the construction of clinics, sports facilities, water reticulation projects and ablution facilities are typical S&LP developments. In response to questions regarding investigations into the sale of Strategic Fuel Reserves, the Department informed the Committee that all the oil had been recovered and the case was in the final stages of being closed. A fair amount of debate surrounded the country’s nuclear programme with the DMRE assuring the Committee that the procurement of 2500 MW nuclear energy is listed in the 2019 IRP, but that the plan requires the affordability of the project to dictate the pace of procurement. The Department also stated that they were evaluating the use of small modular reactors, which offer affordable, modular development of nuclear capacity. The Department did however admit that the 120 mine health and safety inspectors currently employed by the Department are not enough to cover all the mines in all nine provinces and that the Department does not have the budget allocation to increase the number of inspectors or annual inspections. In response to questions on the rehabilitation of derelict and ownerless mines, the Department stated that 3 billion is required to successfully rehabilitate the 6 000 sites (mines and open shafts) that need remedial action. Currently, the Department’s budget for rehabilitation stands at R122 million per year, which allows the Department to rehabilitate only three mines per annum. Presently, asbestos mines are being given priority. The Committee was informed that the just transition to low carbon policy framework was published for public comment and consultation, with the Presidency conducting its own consultations as well. The DMRE assured the Committee that the Department was working towards a zero percentage of wasteful expenditure with various training programmes to deal with improved adherence to government financial administration legislation.  

Consideration and Adoption of minutes

21 April 2022

The minutes were considered and adopted. 

Consideration and Adoption of Budget Vote Report     

The DFFE Budget Vote 32 report was considered and adopted. 

Resolutions

The Committee resolved that:

1. the Department to provide the Committee with details on the framework, especially how the Department plans to balance a transition to a low carbon economy with a continued focus on opportunities in coal, oil and gas exploitation.;
2. the Committee be provided with a report on all corruption cases, resolved and ongoing;
3. the Department to submit in writing all questions not answered during the meeting.

The Chairperson also thanked everyone for their attendance, adjourning the meeting at 11h56.