The department of mineral resources & energy is yet to put pen to paper on the service level agreement (SLA) with the preferred bidder for the new automated mining cadastral system, which is meant to unlock investment in exploration and clear the backlog of mining and prospecting licences.
The department chose PGM Consortium in January as preferred bidder to implement the online mining cadastre to enhance mining and exploration rights management. The consortium comprises GeoTech Systems, MITS Institute and Gemini GIS & Environmental Services.
On Friday, Errol Smart, CEO and MD of junior miner Orion, told the Minerals Council SA webinar looking into progress in implementing SA’s exploration plan that it was disappointing that four months after the department announced a preferred bidder, no concrete work had begun. “For two years, the minister has been telling us we are getting a cadastral system. In January, after a very long process, they announced who won the tender process,” said Smart.
“We are now four months later. The last I heard is that the people who have been appointed still don’t have the terms of reference. The SLA is not in place yet. How seriously are we taking this? Whoever is working on the mining cadastral is an opaque silo. Nobody knows what is happening there.”
Market research organisation BMI, a Fitch Solutions company, said last week that its dim outlook for SA’s mining industry was based partly on the mining rights and permits backlog. BMI said introducing an electronic cadastre system was expected to streamline the processing of mineral rights applications, spur greater investment and promote the sector’s expansion.
The department said work was at an advanced stage to sign the SLA with PGM Consortium. The department “the successful bidder for the design, implementation, maintenance and support of the mining licensing system, PMG Consortium, have negotiated and finalised the SLA. The SLA is planned to be signed within the next week.”
Backlog
The mining industry lobbied for years against the outdated Samrad system, introduced in 2011, which was essentially “useless” in processing mining rights. The Minerals Council SA estimated that clearing a backlog of more than 3,000 mining rights could unlock about R30bn in investments, creating much needed jobs. SA’s mining exploration spend in 2023 was 0.8% of global spend, down from more than 5% two decades ago.
Mineral resources & energy minister Gwede Mantashe outlined a plan to reinvigorate minerals exploration in the country five years ago.
But the backlog in processing permits and lack of publicly available information about who possesses what rights over which areas have stymied exploration efforts.
The department last month published the Exploration Strategy and the Exploration Implementation Plan documents. The latest Fraser Institute survey of mining companies shows SA slipped further as preferred investment destination to 64 out of 86 jurisdictions.
Smart said one of the biggest exploration hurdles was access to land due to private ownership. “It takes you four to five years to get a prospecting right.
“And you get on the property to start exploring and the farmer says ‘no, you’re not going to come here until you pay me an extortionate amount of money’. Since the 1980s there has hardly been real exploration in SA.”
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