JOHANNESBURG (miningweekly.com) – The Department of Mineral Resources (DMRE) and Minerals Council South Africa have established a task team to promote exploration, outgoing Minerals Council president Mxolisi Mgojo said on Wednesday.

The exploration task team, Mgojo said during his address to the council’s 131st annual general meeting, is one of six task teams established between the DMRE and Minerals Council to focus on exploration, policy and regulatory framework, infrastructure constraints, local procurement and beneficiation, improving the operational environment including dealing with crime, a one-stop shop to unblock outstanding mining licences and rights, and a communications task team. (Also watch attached Creamer Media video.)

“We want to encourage much greater exploration with a target of 5% of global total exploration expenditure,” said Mgojo.

A survey of Minerals Council member companies conducted in December 2020 indicated that they have 170 outstanding mining right, prospecting right, Section 11 change of ownership, renewals and environmental authorisations, which are holding back projects worth about R30-billion.

“The one stop shop team has been looking at these outstanding rights and authorisations, and progress is being made by the DMRE in resolving the backlogs,” Mgojo, the CEO of Exxaro Resources, reported.

“We’re in deep engagement with the DMRE Minister and his director-general over ways to resolve these challenges, and to re-energise and revive the mining industry,” he added.

What is being sought includes:

• the discarding of the unsatisfactory Samrad application system and development of a new, electronic, transparent and reliable online mining cadastral system;
• a crackdown on corruption;
• clarity in confusing statutory provisions;
• a speed-up of licensing time periods; and
• regular DMRE reporting on licence applications.

A new exploration plan is expected to be released soon along with a request for proposals for a new DMRE cadastral system.

“The licence backlog is being tackled and progress is being made. We are seeing progress in resolving infrastructure constraints – and there is a concentration on enabling investment by mining in self-generation.

“In this regard we need the licence cap to be raised to 50 MW and the various regulatory time periods to be shortened. Discussions on this are progressing well. We see progress, but we need more, and soon,” Mgojo urged.

NEED TO BE COMPETITIVE

Minerals Council South Africa CEO Roger Baxter emphasised the need for South Africa’s mining industry to be globally competitive.

He said the country could not hope to realise the true economic, transformational and developmental potential of its resource endowment, and contribute more to the gross domestic product (GDP) if it was not competitive.

“Mining can grow back to greater than 10% of GDP and we can attract 5% of global exploration expenditure. This is something on which we, as an industry and government, agree,” said Baxter, who described exploration as the genesis and lifeblood of a thriving mining industry, and a key priority.

He had little doubt that the new draft exploration plan expected soon would materially help to unlock greater investment in exploration.

Having a digitised and more automated online mining cadastral system was, he said, crucial, as was the fast-tracking of a backlog of outstanding licensing applications currently holding back R30-billion of committed investment.

Baxter revealed that the Minerals Council had submitted more than 170 outstanding authorisations, and in various feedback meetings progress was being made by the DMRE in sorting out the backlogs.

Progress was also being made on the unblocking of road, port, and rail constraints. “We certainly need faster progress on the rail and ports side, as these are constraining exports at a time when the commodity cycle is very favourable,” he added.

On energy, he said: “The landmark approval of the Gold Fields 40 MW plant, and the cooperation of the Eskom leadership team in trying to expedite grid tie arrangements and the DMRE to shorten licensing times and consider ‘regulation lite’ for smaller plants and raising the licence caps all point in the right direction. Until all citizens realise that Eskom is short of generating capacity and peak demand capacity, which is a major constraint to higher growth, and that the private sector can unlock significant new generation capacity, we will remain strait-jacketed from an economic growth point of view,” Baxter said.

The Mineral Council reported that in 2020, the South African mining industry exported R414.4-billion in sales, mining employees earned R152.6-billion, these employees paid R26.2-billion in pay-as-you-earn taxes, and mining companies paid R27.2-billion in taxes and R11.8-billion in royalties.