The department of mineral resources & energy hopes to appoint a service provider to install a mining licence cadastre by July.
This will be to replace the failed SA Mineral Resources Administration (Samrad) cadastral system, which has caused a backlog of thousands of unprocessed licence and permit applications.
“We are moving at speed ... We hope to announce a service provider sometime in July and for them to start the implementation as soon as possible,” said Jacob Mbele, director-general at the department, at The Junior Indaba in Johannesburg on Tuesday.
Minerals & energy minister Gwede Mantashe said at an event in Johannesburg last week that the department has narrowed the proposals it received down to a shortlist of five service providers.
The Samrad system was launched in 2011 and the mining sector has been lobbying the government for years to replace it.
According to the Minerals Council SA, the country’s failure to attract a larger share of global mining exploration spend is partly due to difficulties in getting permit applications approved through Samrad.
SA’s share of global exploration spending has dropped to below 1% from a peak of 5% in 2003, and it has remained stubbornly below 1% for more than a decade.
Poor ranking
In the 2022 Fraser Institute Annual Survey of Mining Companies, released in May, SA was for the second consecutive year ranked in the bottom 10 global mining jurisdictions. The country ranked in the bottom 10 for the first time last year. The survey captures the mining industry’s perceptions of the investment potential of global mining jurisdictions based on mineral potential and government policies.
SA’s poor ranking is largely attributed to the government’s failure to resolve various red tape issues affecting miners, and to maintain electricity, rail and port infrastructure.
Responding to the survey results the Minerals Council highlighted the damage done to SA’s reputation as a favourable jurisdiction for investment in exploration and mining due to its “dysfunctional” Samrad system.
“It is critical to have a transparent, off-the-shelf, proven, online cadastral system to encourage investment in exploration and to expedite the processing of prospecting and mining right applications,” the Minerals Council said.
The council’s outgoing CEO, Roger Baxter, said on Tuesday less than 10% of mining exploration activity is for new, green fields projects. Due to insufficient spending on exploration SA is not adding new sources to secure future minerals production.
A functional, transparent and “corruption-free” cadastral system is vital to attract investment in exploration and mining, and to unblock the rights backlog, Baxter said.
Baxter showed the latest data from the department that indicates a big backlog in the procession of mining and prospecting rights. There are more than 5,000 outstanding applications, including rights, permits and permit renewals.
Almost half of these (2,300) are in Mpumalanga, while 1,000 applications are awaiting processing in the Northern Cape.
Mbele said the department is committed to having this backlog cleared by end-March 2024.
“The new cadastral system that is being procured will help us sustain this going forward,” he said.
The department is now targeting the processing of applications in the areas with the largest backlog such as Mpumalanga and the Northern Cape.
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