JOHANNESBURG (miningweekly.com) – The excessive red tape around minerals exploration must be removed to prevent the demise of South Africa’s vital mining industry, consulting exploration geologist Allan Saad said on Thursday.
Saad, who spent 18 years in geological roles with mining major Rio Tinto and who formerly represented the now defunct 23-member Foreign Investors’ Mining Association, warned that mineral and metal ore being extracted by mining companies was not being replaced owing to the process of applying for prospecting rights being extremely onerous and expensive. (Also watch attached Creamer Media video).
He pleaded for a simplification of exploration entry levels to allow investors to make new discoveries that eventuate in new mines.
“A simple prospecting application can cost you a half-a-million rand,” Saad pointed out to Mining Weekly Online.
“The poor small black entrepreneur who wants to develop something just can’t afford it,” added Saad, who identified the complexity of the application system as the cause of the absence of greenfield exploration projects.
He proposed a simplified, phased approach to replace the current time-consuming and costly requirement of being forced to implement an elaborate, across-the-board environmental programme just to drill one hole.
He expressed a complete lack of faith in the South African Mineral Resource Administration System (Samrad) of the Department of Mineral Resources (DMR) and spoke glowingly about the mineral rights management system in use in neighbouring Mozambique, which can be accessed from one’s desktop computer.
Saad: You just pull up the cadastral map of Mozambique. It tells you whose got the rights, where, when they applied for them, when they lapse, and who owns them, within split seconds.
Mining Weekly Online: And if you try that in South Africa?
Saad: You’ve got no chance, no it’s hopeless.
Ironically, a South African company supplied the cadastre system to Mozambique while the DMR persists with the use of its own highly criticised Samrad cadastre, which the nonprofit organisation Corruption Watch has identified as one of the vulnerabilities in the mining rights application process that opens the way for potential corruption between mining companies, government authorities and community leaders.
Saad agreed with a growing number of people, including De Beers Consolidated Mines CEO Phillip Barton, that even after a century of mining, South Africa remains highly prospective, but, as has been reported by Mining Weekly Online, DBCM has not been able to secure a prospecting licence from the DMR despite submitting 54 applications in the last two years.
According to Barton, South Africa has hardly scratched the surface when it comes to diamond exploration, yet the iconic company’s usual R30-million to R40-million exploration budget is poised to be reduced to zero owing to the difficulties it is experiencing in securing rights from the DMR.
Besides the country’s prospectivity, many also point to South Africa’s infrastructure as being another significant plus for exploration, which can range from low environmental impact activities like collecting soil samples, flying aeromagnetic surveys and drilling a borehole to the handing over of a full development of an economically viable orebody to engineers for mine building.
But new mine development is at a low ebb currently and calls are being made for far more inward focus by the State-owned Council for Geosciences, which does work outside of South Africa, as well as a far greater contribution from the State-owned mineral research organisation Mintek.
A new report ‘Mining for Sustainable Development’, compiled as part of a research initiative driven by Transparency International and supported by Corruption Watch, raises important issues that have the potential to emerge at the beginning of the decision-making chain, when governments award mining rights, contracts, permits and licences.
As reported by Mining Weekly Online, the report identifies the gaps that allow for the current levels of corruption and maladministration.
By focusing on the four types of applications, namely mining permits, mining rights, prospecting rights and environmental authorisations, Corruption Watch aims to raise public awareness and encourage good practice in the mining industry, a spokesperson pointed out.
The report recommends that action needs to be taken to overcome the internal capacity constraints to cut down on delays in processing applications and reduce existing backlogs.
It also says there is a need to implement and streamline Samrad as an online cadastre system, which will ensure transparency of information and reduce the possibility of corruption.
Saad recommended concomitant remedial action involving both the public and private sectors and the taking into account of the steps that have been taken in the field of exploration in countries like Peru, Chile, Argentina, Canada and Australia.