Imagine if you bought a house and when you tried to register the purchase it turned out the government had no accurate or transparent system to identify and register your ownership of the property. Fortunately, we do have a functional deeds office, and you can expect your title to be securely registered, even if the process takes a while.
Underlying the deeds office is a form of cadastre — a system that maps and identifies each parcel or erf of land and who has title to it. However, SA is not so lucky when it comes to its mining cadastre. That’s the system that is supposed to map and identify mineral parcels, register who has the right to prospect them and for how long, and enable those who want to explore for copper or chrome or whatever mineral to apply for a licence to do so. It should provide transparency and access as well as the management tools by which the government administers the system — and avoids granting the same parcel to two different geologists, for example, as well as enabling the country to keep track of what riches are being discovered under the ground and where.
A properly functioning modern mining cadastre is the foundational tool that, as the Minerals Council SA put it this week, is critical to ensure the rebirth of mining exploration in the country. The problem is SA doesn’t have one. It hasn’t had one for more than a decade. And the story of the government’s recent efforts to tender out for a new cadastre system to replace the disastrous Samrad system is a case study of dysfunction in government departments as well as of dysfunction in its procurement systems.
It goes back to the department of mineral resources’ decision to implement its own self-built computerised system, Samrad, in 2011. It never worked properly, with the result that the department fell back on opaque paper-based processes — which may well have provided cover for corruption, even if this was not necessarily the intention. Some might remember the ICT/Kumba mineral rights debacle, one of the earliest Gupta capture efforts.
This is a department with a history of questionable mineral rights awards that might not have been as easy with a more modern and transparent system of capturing them. But it’s also a department whose director-general until very recently was one appointed by former minister Mosebenzi Zwane, he of state capture fame. And it’s one that accumulated a backlog of more than 5,000 outstanding mining and prospecting licences. The absence of a modern cadastre system was one of the factors in this. It is certainly the key factor holding back exploration in SA, which accounts for less than 1% of global exploration spending and, unlike top mining jurisdictions such as Australia and Canada, has few local exploration companies.
That’s not because SA is all mined out. It still has rich resources underground, including some of the “green minerals” the world urgently needs to support the energy transition. The industry has long called for a new system to replace Samrad, urging the government to simply buy one off the shelf along the lines of those successfully installed by a host of other African mining countries in recent years. Many were bought from a Cape Town-based company, Spatial Dimension, owned by US-listed Trimble, a global leader in cadastre systems.
Mineral resources & energy minister Gwede Mantashe had expressed frustration with his department’s failure to deliver a new system. The department finally went out to tender a year ago, though bizarrely the tender was not just for a cadastre system but for an ambitious “integrated enterprise solution” to deliver all of the department’s services. It also stuck to the government’s preferential procurement system and required the BEE status of the bidders — even though it should surely have applied for an exemption if what it really wanted was a world-class mining cadastre system. That’s the kind of specialised item a country installs only once. It’s hardly the province of BEE players, yet the tender specifications and bidding criteria served to exclude the Cape Town-based experts, whose company is US owned, and apparently other big IT specialists too.
With no sign of a preferred bidder almost 10 months after the tender closed in August, Mantashe told journalists at this week’s Mining Indaba that he couldn’t put a deadline to something that had not been started. Acting director-general Patricia Gamede said the department still had not received a response from the State Information & Technology Agency (Sita) but was chasing them for a response.
As it turns out, Sita was more than happy to respond — and to blame the department’s officials for refusing to answer “serious matters” raised by external auditors over the integrity of the procurement process. The process is pretty convoluted anyway, with Sita responsible for all IT procurement on behalf of government departments. That surely makes interdepartmental spats such as this one quite likely. And it can only add to the convolutions of a rigid government procurement system that is at best cumbersome, but at worst enables corruption and rent-seeking by those who know how to game the system.
Meanwhile, the delay continues and the story becomes curiouser and curiouser. Five departmental officials make up the majority of the tender committee’s members, in line with Sita’s policy of letting the client department make the running. It’s also a policy to have external auditors check the integrity of the procurement process, and in this case the auditors have raised serious questions; Sita MD Luvuyo Keyise would clearly love to tell all, but says he has been told this would “tarnish the integrity of the tender process”. The department has yet to respond to a two-day-old request for comment.
It feels like another instance of the government being strangled by its own dysfunctional bureaucracy while investment continues to suffer. If there’s a bright spot it is that mining exploration is now under the spotlight. Mantashe has published a new exploration strategy, even if it’s not the one he agreed with the industry a year ago. On the stage at the indaba this week, both he and President Cyril Ramaphosa committed to sort out the cadastre problem. Let’s see.
• Joffe is editor at large.
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