Mining licences put heat on state
July 21, 2005
By Nicky Smith
Johannesburg - The department of minerals and energy was "re-engineering" its processes in a bid to operate more efficiently, Jacinto Rocha, a deputy director-general in the department, said yesterday.
Rocha said that once the department had received the funding it needed from the national treasury, it would be creating two new divisions within each of its provincial departments to better handle the demands of the industry's new legislation.
In terms of the Mineral and Petroleum Resources Development Act, which was promulgated on May 1 last year, mining companies need to apply to the state to have existing licences converted to new order mining rights.
The act is the government's tool to drive racial and economic transformation within the mining industry. It places obligations on mining companies to reach certain targets on employment equity, rural development programmes, training and black ownership.
Mining companies have until 2009 to convert licences or lose them.
Rocha said while changes in the department were not directly brought about by the 5 000 applications that had poured in since the promulgation of the act, they had influenced the timing.
Rocha said that of the 5 000 applications that had been received, 2 800 had been accepted and about 1 000 had been rejected. On conversions from old order mining rights to new order rights, 11 had been granted.
For prospecting, 87 conversions of the 228 applications had been granted.
But Rocha said the numbers were "misleading" since they did not give a sense of the nuance or activity around the 2 800 applications that had been accepted.
The department had to take responsibility for the "very slow" pace of processing of minerals applications, but it would be "incorrect" and "unfair" to claim that 100 percent of the blame was the department's, Rocha said.
Frans Barker, the Chamber of Mines' senior executive, said the chamber and the department "underestimated the amount of work involved with regard to the conversion of mineral rights".
He said: "This seems to be one of the first tangible steps the department is taking to address some of the industry's concerns around the mineral rights conversion process. We certainly welcome it."
Rocha said companies needed to take responsibility for delays because of the quality of the information they submitted in their applications. The restructuring had already been completed at the national department.
The mineral development division, which had had two subdivisions (one that dealt with policy development, and a second that handled regulatory and licensing issues), had now been split into two stand-alone divisions.
Rocha said a 1998 white paper, which was the precursor to the minerals act, had envisioned that such a split would become necessary.
In April this year, effect had been given to this policy with Abe Mngomezulu being appointed as the deputy director-general responsible for mineral policy and investment promotion, and Rocha being appointed to his new post.
"We're basically the police to ensure that mining companies comply with the requirements of the act," Rocha said. "We have assessed that there is additional capacity needed and we are preparing our budgets for next year with this in mind."
The provinces that would be in line for larger budgets and more people were the mineral-rich provinces of the North West, the Northern Cape, Limpopo and Mpumalanga.
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