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DMRE makes progress on applications backlog, blames Sit...

Business Maverick

Business Maverick

DMRE makes progress on applications backlog, blames Sita for cadastre conundrum

Mineral Resources and Energy Minister Gwede Mantashe. (Photo: Leila Dougan)

The Department of Mineral Resources and Energy says it has made progress on slashing the backlog of applications for mining and prospecting rights and has made a renewed push to get a mining cadastre up and running. Minister Gwede Mantashe and some of his senior officials made the comments during a round-table discussion 12 April with Daily Maverick/DM168 in Pretoria.

The bottleneck and the lack of a cadastre are two sides of the same coin that has jammed up investment into South Africa’s exploration sector. South Africa accounts for less than 1% of the global expenditure in exploration activities, a sign of a sunset industry. If prospective prospectors cannot get their permits, they cannot explore. It’s that simple. 

The backlog of 5,326 applications for mining rights, prospecting rights, mining permits, renewals and cessions or the sale of rights came stumbling into light early in 2021 during a Department of Mineral Resources and Energy (DMRE) presentation to Parliament. Business Maverick and other media outlets have repeatedly asked for an update. 

In October 2021, the DMRE revealed to Business Maverick that it had processed or adjudicated 607 applications, 114 for mining rights and the remainder for prospecting rights. It still remained unclear what the exact size of the backlog was but mining industry sources have said they believed that progress has been made. 

The DMRE fleshed out further details during the round-table discussion.

“We indicated at the time that we had a programme to reduce that backlog and we cannot be irresponsible in reducing that backlog. We have to be fair to all the applicants. And we believe that we’ve done that,” said Tseliso Maqubela, the deputy director-general of minerals and petroleum regulation.  

He went on to say that since that parliamentary presentation early in 2021, the department had adjudicated more than 1,000 prospecting rights and more than 400 mining rights. 

“That is a lot of work and the resources have not increased,” he said, also noting the challenges presented by the Covid-19 pandemic and its impact on workflows. “If we try to do more than that, given the complexity of the work, we will make mistakes.”

Asked afterwards for clarity, Maqubela said the backlog had been reduced by about 1,400 which would bring it to less than 4,000. That still seems like a large number but at least there is movement in the right direction. 

Much of the entanglement also stems from the useless Samrad system for lodging rights applications which Mantashe has long decried and admitted is a failure. 

The solution lies in a functioning mining cadastre, which is the global gold standard. An online portal that is open to the public, it provides comprehensive geological data about a country, information on mining and prospecting permits that have been issued and expired, that sort of thing. Among other things it brings badly needed transparency to the sector, reducing opportunities for corruption. 

Deadlines for bids for the cadastre contract expired in August 2021, but there has apparently been little progress. 

Patricia Gamede, the DMRE’s acting director-general, said the main obstacle lay with the State IT Agency (SITA), which falls under the Department of Communications and Digital Technologies and provides IT service support to all government departments. 

Without going into too much detail, Gamede said: “Currently we are trying to do away with the Samrad system and we have had advertisements based on new service providers… (But) We’ve got a problem now with SITA, it’s not been able to assist us because at one point they didn’t even have a board themselves… The problem we are having right now is with SITA.”

So, she said, she had asked her minister to take up the issue with SITA’s minister, Khumbudzo Ntshavheni. 

Mantashe then interjected, saying: “Because of your pressure (Business Maverick’s reporting), I signed a letter to that minister (Communications) this morning.”

Pressure, it must be said, has also been applied from many other quarters. The main industry body, the Minerals Council South Africa, has had endless engagements with the DMRE about the cadastre issue and even offered to pay for part of it. 

In a related development, the DMRE this past week finally published a long-awaited five-year exploration strategy. Its success will hinge in large part on replacing Samrad with a functional cadastre. 

“Government must immediately invest in an efficient and transparent cadastral system,” the strategy pointedly says. 

It aims for South Africa to account for 5% of global exploration spend – a five-year target that was initially floated four years ago. It calls for public-private partnerships and envisions a role for the Council of Geoscience, though details remain scant. 

“The South African share of the global exploration expenditure has consistently declined since 2003 and remained below 1% over the past decade. This pattern does not resonate with the residual prospects of discovering world-class deposits consistent with the quality of the country’s prolific geologic environment,” the strategy notes, laying out the crux of the problem. 

Underscoring this woeful state of affairs, South Africa has for the first time fallen into the bottom 10 of attractive mining destinations, according to the Fraser Institute’s latest Annual Survey of Mining Companies for 2021. 

“South Africa is slipping sharply down the ranks when measured in the Investment Attractiveness Index, falling to 75 out of the 84 jurisdictions surveyed,” the Minerals Council South Africa said in a statement. 

This “serves as a warning that we are headed in the wrong direction when it comes to attracting investment to the country’s resources sector”.

The stakes are very high – some would say the long-term prospects for South Africa’s mining sector hang in the balance – so hopefully Mantashe has got the ball rolling. DM168

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All Comments 6

  • “South Africa is slipping sharply down the ranks when measured in the Investment Attractiveness Index, falling to 75 out of the 84 jurisdictions surveyed,” This little man should by fired. He is responsible for delaying projects whether in prospecting or exploration. This costs the country billions.

  • Anybody can tell that DMRE is a total mess with no actual plan just like the ANC that Mantashe presided over for years. Maybe a political heavyweight in the ANC but by a country management standard he is seriously useless. Ramaphosa really should appoint people that have the capacity and force of will to deliver not ideological obstructionists t hat cost us all

  • The failed SAMRAD system was built about 15 years ago with proprietary software (ESRI). A classic case of vendor lock-in. Apparently DMRE now want to buy another, off the shelf proprietary system, given the delays in procurement. How will this help? My company, which builds systems with open source GIS software, would have bid for the new mining cadastre system but the RfP from DMRE inexplicably explicitly excluded open source solutions. This exclusion really limited the DMRE’s choices. This flies in the face of national policy in place since 2007 to preferentially procure open source software. I support a transparent, publicly accessible mining cadastre built on open source software (and being open source itself).

  • The progress report says if you fail to expedite at the correct level you don’t get anywhere, and delay in delivery always lies with someone else. This week a “LONG AWAITED exploration strategy” was published. The excuse is already on the table ” THE MAIN OBSTACLE lay with the State IT Agency (SITA) for the new cadastral system. On memory this was going nowhere because no-one had BEE credentials and was holding back the procurement. For this time, no BEE middlemen, and get the contract placed with the technically correct implementer, hopefully under the guidance of Zondo commission recommendations for adjudications. Missing in the article is the “Project Plan for the Cadastral System”. Where is the plan and where are the key dates? Gwede’s comment that because of Business Maverick’s pressure is why he is sending a letter to Communications Minister that morning. This illustrates he has no plan and he has no clue.

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