Chairperson, honourable members, ladies and gentlemen, allow me to introduce my department's response to issues emanating from the public hearings on the Precious Metals Bill. Judging by the amount of submissions you have dealt with I can tell that this sitting was a bit quieter than the previous one where you dealt with the Diamonds Amendment Bill but just as intense. Taking a glance over the submissions you received, one could see that the Gold mining sector was only represented by the Chamber of Mines as no company in that sector made a formal submission nor came for the hearings. My understanding is that it is not because they do not care about the outcomes, but because the gold sector has been regulated for years through other legislative measures. However, the Platinum Group Minerals (Pam's) sector was not regulated. This also resulted in a situation where the gold sector had comparatively moved further in the beneficiation route than their counterparts. I must also emphasise that this is however not enough, hence the reason why we come up with the legislation that you will have to support.

South Africa is well endowed with both these minerals with the reserve base of approximately 87% PGM's and 40,7% in gold and we are number one producers for both these commodities at

approximately 59% and 14% respectively on the supply side. However, although we have these resources we are not the leading beneficiators which these amendments are going a long way in trying to address. Honourable members, we dare not fail our country and its people who elected us to pass legislation that will better their lives.

Chairperson and honourable members, this Bill will be regulated by the Diamond and Precious Metals Regulator established in term of the Diamond Amendment Bill and I will not allude to it much as I think we exhausted deliberations on it, though it suffice to say that the team will have to do cross referencing issues from the Diamond Amendment Bill to the Precious Metals Bill in this regard.

The other issues of concern were:

• Clarity on definitions

· Criteria for issuing and renewal of permits

· Transitional arrangements

· Broad Based Socio-Economic Empowerment

I would therefore like to briefly state our position on these matters as the drafting team will explain them in detail clause by clause after this.

The

There were suggestions that there should not be any amendments to the definition of unwrought precious metals as contained in the Mining Rights Act of 1967. However, the previous definition was not without its own shortcomings. Thus the need to redefine unwrought precious metals become evident. As such there is a clear distinction between unwrought precious metals and semi fabricated precious metals. This allows for legislation that is less stringent on semi fabricated precious metals as well as less stringent control measures. We believe this will lead to increased beneficiation.

The reason for determining the percentages of purity in the definition is to refine precious metals to a higher level of purity before it is worked into semi fabricated products. Also the percentages provides an additional distinction between unwrought and semi fabricated precious stones.

3. CRITERIA FOR ISSUING AND RENEWAL OF PERMITS

Every applicant will be required to comply with the objectives of this Bill such as the Broad Based Socio-economic Empowerment. Local beneficiation is not to be comprised by international demands so as to ensure broad participation through out the value chain.

4. AN EXPANDED SCOPE FOR A BENEFIC~ON LICENSE

The introduction of the beneficiation license is recognition of other industries that use unwrought as well as semi fabricated precious metals other that the jewellery manufacturing industry. Industries that will derive benefit from this license would be the IT, Avionics and electronics industry who do not hold a refining license but may work with both unwrought as well as semi fabricated precious metals.

5. TRANSITIONAL ARAANGEMENTS

We understand that this industry has been operating under shrouded rules of secrecy virtually designed by itself. Acknowledging the above, we believe that this piece of legislation extends security of tenure in that the period of transition is two years in which all companies shall have the opportunity to comply and operate within the environment created by legislative framework. This indeed creates an certainty in that every operation's life span will be linked to the refinery license.

6. BROAD BASED SOCIO-ECONOMIC MPOWERMENT

Honourable members, it pains me to learn that in this era there are still companies operating in South Africa who believe their business is so technical to an extend that black people cannot comprehend what is happening therefore they should be exempted from compliance from the law in regards to the pillars of the charter.

This is criminal to say the least. This exemplifies the type of mentality they have as their sector was not regulated at all. With your intervention this must just stop. We must remember that this initiative is not done in isolation, but is part of this government's continued programme to transform the economy, something that the previous government and industry captains fail to do. We left this to them for a long time and we are still where we were decades ago.

Honourable members, the above are the critical issues that we had to address from the submissions and the hearings and I believe that we now have a balanced piece of legislation that will be embraced by all.

Chairperson, allow me to thank you once again for this opportunity and the manner in which your members have dealt with the Diamond Amendment Bill under your competent leadership. I know that in your capable hands and those of your honourable members we can be assured of the same.

I thank you.