Minerals Council South Africa has made recommendations to the Department of Mineral Resources and Energy (DMRE) about critical reforms that are needed to encourage greater investment in exploration and mining.

One of its suggestions is that the dysfunctional South African Mineral Resources Administration System (Samrad) be discarded and a new, transparent and reliable online mining cadastral system be developed, with the Minerals Council also offering to contribute partly to the cost of a new cadastre system, provided the associated costs are reasonable and the Samrad system is completely discontinued.

“We continue to engage constructively with the DMRE to find solutions to issues that hamper the growth of exploration and improve efficiencies around the issuing of licences and permits,” says Minerals Council South Africa CEO Roger Baxter.

Secondly, it calls on the DMRE to ensure the entire licensing system is electronic, with proper receipts for documents uploaded and timeframes within which feedback must be provided and licences issued, and that ambiguities in the law be addressed.

“An open and transparent cadastre system is an essential component of a modern mining economy. Many of the mining jurisdictions in sub-Saharan Africa have them – Botswana and Zambia are examples. It certainly would assist in attracting investment, along with tax incentives for exploration. It is crucial to manage and grow exploration, as well as to reduce red tape when issuing licences and permits,” Baxter adds.

Further, the council says any corruption or malfeasance must be reported, while licensing times should be halved. It also calls on the DMRE to regularly report on licences applied for, granted and refused to ensure full transparency.

Some of the ideas contained in the task team discussions with the DMRE have found expression in the Economic Reconstruction and Recovery Plan announced by President Cyril Ramaphosa in October. These include the critical need to halve licensing times and the development of a new exploration plan.

“A lot of work has been done by stakeholders, including the DMRE, the Council for Geosciences, the Minerals Council and other partners, to develop an exploration plan. Once finalised in the not-too-distant future, we believe this will be a game-changing plan. We await guidance from Minister Gwede Mantashe and director-general Thabo Mokoena,” Baxter adds.

The DMRE recently indicated that the processing of 235 mining rights, 2 485 prospecting rights, 1 644 mining permits, 238 Section 11 change of ownership transfers and 724 licence renewals were currently backlogged.

“Based on a survey of Minerals Council members representing more than 170 mining company right applications conducted in December 2020, mining companies that are members of the council have projects worth about R20-billion that have been prevented from being developed, owing to slow government processes, including delays in the approval of permits and mining right transfers, and the issuing of water-use licences and environmental permits,” says Baxter.

The projects identified include exploration and mining operations, some of which have been delayed for two to three years, and some for even longer. The survey excluded potential projects companies have not progressed yet through their investment committees, and expenditure on self-generation power projects to supplement electricity supply from Eskom, which is the subject of a separate process between the DMRE and the Minerals Council.

“In mid-2020, during the height of the Covid-19 lockdown, [Mantashe] and Minerals Council office bearers agreed on a crucial process to revive mining in the ‘new normal’. A series of task teams were established to resolve various issues, including regulatory constraints and backlogs, policy challenges and infrastructure constraints.

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