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Briefing to the Portfolio Committee on Mineral Resources regarding the 3rd and 4th Quarterly Report for the 2015/2016 Financial Year. Includes strategic overview, financial summary, and performance highlights.
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Briefing to the portfolio committee on Mineral resources BRIEFING TO THE PORTFOLIO COMMITTEE ON MINERAL RESOURCES ON THE 3RD AND 4TH QUARTERLY REPORT FOR 2015/2016 FINANCIAL YEAR Date: Wednesday, 31 August 2016 Time: 9h00-13h00 Venue: s35, 1st Floor, NCOP Building
PRESENTATION OUTLINE • Strategic overview • Summary of Performance (Q3 and Q4) • Financial overview • Pre-determined objectives • Highlights of the performance per branch/Programme • Programme 1- Corporate Services • Programme 1- Financial Administration • Programme 2- Mine Health and Safety • Programme 3- Mineral Regulation • Programme 4- Mineral Policy and Promotion • Concluding remarks
STRATEGIC OVERVIEW Vision 2019 A globally competitive, sustainable and meaningfully transformed mining and minerals sector. Vision 2030 A leader in the transformation of South Africa through economic growth and sustainable development. Mission Promote and regulate the minerals and mining sector for transformation, growth and development, and ensure that all South Africans derive sustainable benefit from the country’s mineral wealth.
STRATEGIC OVERVIEW Constitutional Mandate The Department of Mineral Resources derives its mandate from section 24 of the Constitution of South Africa, Act No. 108 of 1996. Legislative Mandate The principal Acts driving the work of the Department are the Mineral and Petroleum Resources Development Act (Act No. 28 of 2002) (MPRDA) and the Mine Health and Safety Act (Act No. 29 of 1996). • The two Acts provide the regulatory framework for the promotion and regulation of the mining, minerals and petroleum industry. • They also provide a regulatory framework for ensuring the equitable access to, and the sustainable development of the nation’s mineral resources and related matters.
SUMMARY OF PERFORMANCE (Q3 and Q4) FINANCIAL OVERVIEW • The budget for 2015/2016 financial year was R1.638 billion. • 50% of the budget is allocated to transfer payments • 33% of the budget is allocated to compensation of employees. • 15% is allocated to Goods and Services. • 1% is allocated to capital expenditure.
SUMMARY OF PERFORMANCE (Q3 and Q4) FINANCIAL OVERVIEW • The overall expenditure up to the 3rd quarter amounts to R1.302 billion or 79.45% of the total allocated budget. • The projected expenditure was R1.310 billion and a variance of R8.1 million or 0.62% was recorded, which is within the National Treasury benchmark of 2%. • By the end of the financial year (4th quarter), the full amount was spent.
Pre-determined objectives Programme 1: corporate services
Corporate Services Key strategic objectives include: Contribute to skills development. Communicate DMR programmes to internal and external stakeholders. Provide professional and legal support and advisory services to the Ministry and the department. Ensure implementation of national strategies. Attract, develop and retain skills.
SUMMARY OF PERFOMRANCECorporate Services • Targets achieved during the period under review were as follows: • Contribute to skills development. • 21 mining related career awareness initiatives were implemented. • Communicate DMR programmes to internal and external stakeholders. • 100% of identified public participation programmes were implemented. • Develop, review and improve internal processes/guidelines/procedures. • 17 internal processes were reviewed. • Ensure implementation of national strategies. • All of pre-employment screening and vetting requirements were processed • Attract, develop and retain skills. • 16 HRD initiatives aligned to the National Skills Development Strategy (NSDS) goals implemented.
Pre-determined objectives Programme 1: financial administration
FINANCIAL ADMINISTRATION • The focus for the 2015/2016 financial year was to ensure improvement of financial management processes and also to ensure that optimum business value is realised from ICT related investment. • The related strategic objectives are as follows: • The provision of efficient services to internal and external customers • Efficient and effective Implementation of processes and systems • Efficient and effective management of financial resources • Promotion of Corporate Governance
SUMMARY OF PERFORMANCE (Q3 and Q4) FINANCIAL ADMINISTRATION • The provision of efficient services to internal and external customers were achieved: • By ensuring the availability of critical systems and that regularity financial reports are delivered on schedule. • All invoices were paid within 30 days for Quarter 3 and 4. • Implementation of processes and systems was achieved through alignment of ICT initiatives to strategic objectives of the Department. • Through reviewing and implementation of the Master Systems Plan (MSP). • This included process mapping, Geographic information system enhancement and mobile device management. • Workshops were held with key users on SAMRAD and inputs received are used to improve the performance of the system and further development.
SUMMARY OF PERFORMANCE (Q3 and Q4) FINANCIAL ADMINISTRATION • Efficient and effective management of financial resources was achieved through monitoring of budget, irregular expenditure and asset management. • There were no new irregular expenditure cases reported in quarter 3 and in quarter 4. • By the end of the 4th quarter, only 6 assets were disposed of prior to their lifespan, compared to 21 assets in the previous year. • The department continues to raise awareness relating to physical security of asset management.
HIGHLIGHTS- FINANCIAL ADMINISTRATION • Quarter four marks the end of the financial year. • The year-end financial closure process was successfully completed. • The audit process is complete and detailed report will be provided after the annual report is tabled.
Pre-determined objectives Programme 2: mine health and safety
MINE HEALTH AND SAFETY The Strategic objectives to be achieved are as follows: • Promote Health and Safety. • Contribute to skills development. • Implement Service Level Agreements (SLAs). • Develop and review internal processes. • Improve turnaround times.
SUMMARY OF PERFORMANCE (Q3 and Q4) MHSI OVERVIEW The promotion of health and safety of mineworkers was achieved, amongst others, through conducting: • 466 audits and 7539 inspections, • 71 Tripartite workshops, • 100% accident inquiries. The Department continued to contribute to skills development through: • The implementation of certificate of competency model to improve the pass rate. • 38 learner inspectors completed the mine experiential training and have been absorbed in the Department as Assistant Inspectors.
HIGHLIGHTS – MINE HEALTH AND SAFETY OCCUPATIONAL HEALTH DIALOGUE, 2016 The Department through the Mine Health and Safety Council held the occupational Health dialogue in March with the following objectives: • greater awareness and focus on Noise Induced Hearing Loss, Silicosis, heat related diseases and occupational related tuberculosis (TB) at SA mines, • afforded opportunity for collaboration between State, Employers, Organised Labour, researchers and other organisations to address occupational health challenges, • robust, general and scientific discussions to drive strategic conversations on pertinent issues of occupational health at mines, • promote “zero harm” and provide for optimal health during and after employment. The dialogue adopted a set of recommendations to further improve on the performance of the mining industry on occupational health.
Pre-determined objectives Programme 3: mineral regulation
MINERAL REGULATION The Strategic objectives to be achieved are as follows: • Promote job creation. • Promote sustainable esources use and management. • Reduce state environmental liability and financial risk. • Implement transformation policies/ legislation. • Monitor and enforce compliance. • Improve turnaround times
SUMMARY OF PERFORMANCE (Q3 and Q4)Mineral Regulations Promotion of job creation and sustainable resource management: • 120 SLP development projects implemented, in line with national development objectives, • 342 consultation engagements, • 204 rights/permits issued to HDSAs, • Training on Air Quality and Waste Management and Environmental Mineral Resource Inspectors (EMRI’s) was provided to 60 officials during the 3rd quarter.
SUMMARY OF PERFORMANCE (Q3 and Q4)Mineral Regulations Reduce State environmental liability and financial risk: • 129 closures certificates were issued to compliant right holders • 127 notices were issued to right holders who did not have adequate financial provision. Implement transformation policies/legislation: • 204 rights/permits were issued to HDSAs
SUMMARY OF PERFORMANCE (Q3 and Q4)Mineral Regulations Monitoring and enforcement of compliance was achieved through: • 270 SLP compliance verification inspections, • 595 ME verification inspections, • 502 legal compliance inspections, • 1889 environmental verification inspections
HIGHLIGHTS- MINERAL REGULATIONS Management of Job Losses and Intervention Mechanisms: • The Department, in collaboration with stakeholders, continued to implement the Declaration on Saving jobs. • Of particular importance to note, is the streamlining of Section 189 of the Labour Relations Act, with Section 52 of the Mineral and Petroleum Resources Development Act, in relation to management of downscaling within the mining industry.
HIGHLIGHTS- MINERAL REGULATIONS Tackling illegal mining: • The collaborative efforts by the Department, law enforcement agencies and other stakeholders are yielding positive results in our efforts to address gold illegal mining. Improvement on arrests, especially crime syndicates and less violent cases. • During the year, a number ofjoint operations were conducted in the Northern Cape in collaboration with the South African Diamond and Precious Metals Regulator (SADPMR), South African Police Services (SAPS), affected mining houses, the Provincial Department of Economic Development and other stakeholders aimed at tackling illegal trading of diamonds.
HIGHLIGHTS- MINERAL REGULATIONS Stability within the Industry: • Stability within the mining industry remain imperative to ensure sustainable growth and competitiveness of the industry. • The importance of healthy relations between mining companies as well as communities and local government, cannot be overstated, as this contributes towards the social licence to operate. • The Department together with other stakeholders have been engaging various community structures, where discontent between mining companies and some host communities became more pronounced. • Engagements with communities which are aimed at facilitating an environment of stability have taken place and still continue in communities such as Xolobeni, Umzumbe, Steelpoort, Nongoma and Phola to mentioned but a few.
The following are some of the Social and Labour Plan (SLP) development projects implemented in the last quarters under review
NOKUKHANYA DAY CARE CENTRE IN NDUMANGENI VILLAGE,BY STUTTERHEIM QUARIES EASTER CAPE
CLASSROOMS AT CHUMANI PRIMARY SCHOOL IN REESTON EASTERN CAPE
School hall at Taiwe Secondary School in the Masilonyane Municipality Free State
Building of an early childhood development center, in Fetakgomo Municipality
Eifel Water Infrastructure Projects in Joe Morolong Local Municipality Northern Cape
Pre-determined objectives Programme 4: mineral policy and promotion
POLICY AND PROMOTION The Strategic objectives achieved are as follows: • Promote investment in the Mining, Minerals and Upstream Petroleum Sectors. • Promote sustainable resource use and management. • Facilitate transformation in the mining and minerals sector.
SUMMARY OF PERFORMANCE (Q3 and Q4)Policy and Promotion • Promote investment in the Mining, Minerals and Upstream Petroleum Sectors, include: • 14 publications/reports were concluded • Ocean Economy Operational Phakisa were fully implemented • 8 small scale mining workshops were held • 125 SMME’s were supported • 9 social dialogues • 8 consultations on Shale Gas exploration • 5 technical partnerships implemented
SUMMARY OF PERFORMANCE (Q3 and Q4)Policy and Promotion • Promote sustainable resource use and management: • 8 technical partnerships were implemented • Three frameworks for mining environmental management developed • 50 derelict and ownerless sites were rehabilitated • Facilitate transformation in the mining and minerals sector. • Two policy impact study were conducted • Two legislative instruments were reviewed and published for comments- African Exploration, Mining and Finance Corporation (AEMFC) Bill and Mining Charter amendments
Highlights –Mineral Policy and Promotion • Community Imbizo on shale gas in Cradock (EC) and investment luncheon in Cape Town (WC) • Development of coal strategy • Development of a revised Departmental Environmental Management Plan (EMP) in line with the one mine environmental management system • Development of the AEMFC Bill
