The winning bidder for the new automated mining cadastral system has been identified, but the bidding process still needs to be audited before the contract is awarded.
The system is expected to unlock investment in exploration and clear the backlog of mining and prospecting licences
“The department of mineral resources & energy, working with the State Information Technology Agency (Sita), will announce the successful bidder for the mining licensing system as soon as all necessary processes are concluded. The successful bidder will sign a service-level agreement which will stipulate the timelines upon which the required service must be provided,” the department said this week.
The tender, issued in March, stipulated that the successful bidder maintain and support the mining licensing system, which, once implemented, will replace the South African mineral resources administration system.
A mining cadastral system lists available mining or prospecting rights, properties under mining or prospecting rights, and the ownership and expiry of currently held rights.
It is hoped the new off-the-shelf system will expedite licence approvals, facilitating increased investment in the sector.
Allan Seccombe, spokesperson for Minerals Council South Africa, said the DMRE had a backlog of more than 5,000 mining, prospecting and permit applications, which had been the case for a number of years.
“This bottleneck is holding back hundreds of millions of rand of investment in the mining sector, the creation of jobs, exports and contributions to the fiscus,” he said.
Having a functional, transparent, modern and proven cadastral system bought off the shelf will speed up the process of lodging prospecting and mining rights, allow a clear view of who has what and for how long, and reduce the risk of corruption and meddling by officials handling these applications.
— Allan Seccombe, Minerals Council South Africa
South Africa's share of global exploration spending in 2022 was 0.8%, compared with the 5% envisioned by the DMRE, said Seccombe. Since 2010, the country had attracted less than 2% of global exploration expenditure, and since 2020 the proportion had fallen below 1%, he added.
“Having a functional, transparent, modern and proven cadastral system bought off the shelf will speed up the process of lodging prospecting and mining rights, allow a clear view of who has what and for how long, and reduce the risk of corruption and meddling by officials handling these applications.
“It also allows an effective management by the DMRE of mineral rights, eliminating entities who are sitting on prospects for too long and avoiding the awarding of overlapping rights, which has been the case to date,” he said.
The council previously said it takes more than 350 days to process a mining licence in South Africa, compared with 40 days in Botswana.
Exxaro Resources said this week at the release of its interim results to the end of June that its Belfast mine was in the final stages of the licensing process to extend the life of the operation. However, the DMRE remained constrained in its ability to address application backlogs.
“With no proper functioning cadastral system, conflicting applications continue to be a challenge for the company,” Exxaro said, adding that it had implemented a manual system to check section 10 notices published at DMRE regional offices in terms of the Mineral & Petroleum Resources Development Act.
Exxaro Resources CEO Nombasa Tsengwa said dysfunctional DMRE regional offices meant interested parties were not able comment on applications within the 30 days stipulated by the act.
“When it comes to investments, we believe government needs to fast-track the permitting and prospecting rights process, which we believe is provided for in section 10. Under section 10 [of the act] you can get a map of who has land rights in the country. So as you apply and get into a process, the government has a proper map that we can utilise so we can fast-track these processes,” Tsengwa said.
The DMRE's attempt to launch an in-house cadastral system last year failed and it abandoned its plan to build one from scratch given the time that would take. Instead, it opted for an off-the-shelf system.
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