SA’s mineral rights processing system is a nightmare but work is under way to improve it, mineral resources and energy minister Gwede Mantashe said on Wednesday.
Speaking at the Minerals Council SA’s 131st AGM, Mantashe singled out the way the department handles applications for prospecting and mining rights for harsh criticism.
Mantashe and his director-general, Thabo Mokoena, have told parliament that the online applications processing system, Samrad, is not optimal and they are conducting a six-month review of it to come up with a better option, with the minister going so far to say it has never worked properly.
In addressing interventions needed to revive SA’s mining sector, the processing of mineral rights is one of the most problematic areas for the department to address, he said on Wednesday.
“We are working hard to improve our mining licensing system. It’s a nightmare for us,” Mantashe said, without giving details of what is proving so difficult.
Senior department officials told a parliamentary portfolio committee in March about its efforts, particularly in Mpumalanga, to address a large backlog of more than 5,000 mineral rights applications and the Samrad system.
“We need to speed up licensing,” said council president Mxolisi Mgojo.
The council and its members, which account for 90% of SA’s mineral production, wanted the licensing threshold for electricity generation set at 50MW and not the 10MW Mantashe earlier said will be the limit his department will impose on self-generation projects.
The threshold sets the size limit at which a company must obtain a licence from the National Energy Regulator of SA (Nersa).
While Mantashe has said mines and other companies can build any size solar or renewable energy project they like for their own use, many of these would be economically impractical without the ability to sell power back to the grid or to send it through the Eskom network to other operations or users.
He urged mining companies to visit the department with their self-generation plans. “Those mining companies that want to get into embedded generation will visit us, even if you’ve not started yet, to discuss the plan; we’ll prepare the plan [and] talk to Nersa, so you won’t get stopped.”
“If we facilitate it and make it happen, it will be quite a breakthrough for the economy,” he said of projects to supplement increasingly expensive and erratic electricity supply from Eskom.
Mining companies have more than 2GW of self-generation projects they want to implement, said council CEO Roger Baxter, adding that some of these are already the subject of discussion with department officials to expedite them.
The council has argued that allowing these projects to be built, the department and Nersa will take pressure off an under-strain Eskom and free up time and capacity for maintenance of the aged fleet of power plants.
Gold Fields recently secured a licence to build a 40MW solar array at its South Deep mine near Carletonville for on-site use.
The council is working closely with the department to develop a mineral exploration strategy, something Mokoena said in early October 2020 would be ready in three months.
“It must not take too long. We must conclude the process because you don’t promise an exploration process for a year and expect investors to have confidence in you,” Mantashe said.
As the end of May nears, it’s been eight months since Mokoena committed to releasing the exploration strategy by early 2021.
Mantashe urged mining companies to unite in community projects to have a far bigger effect on people’s lives rather than working individually on small schemes.
The department is pushing hard for artisanal and small-scale mining to start to unlock mineral deposits bigger companies cannot economically mine.
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