Tuesday, 10 March 2015]
349
No 23—2015] SECOND SESSION, FIFTH PARLIAMENT
PARLIAMENT
OF THE
REPUBLIC OF SOUTH AFRICA
ANNOUNCEMENTS,
TABLINGS AND
COMMITTEE REPORTS
TUESDAY, 10 MARCH 2015
TABLE OF CONTENTS
ANNOUNCEMENTS
National Assembly
1.
2.
Referral to Committees of Bills introduced ...................................... 350
Membership of Committees ............................................................. 350
TABLINGS
National Assembly
1.
Speaker ............................................................................................. 351
COMMITTEE REPORTS
National Assembly
1.
Mineral Resources ............................................................................ 351
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[Tuesday, 10 March 2015
ANNOUNCEMENTS
National Assembly
The Speaker
1.
Referral to Committees of Bills introduced
(1)
2.
The following Bills are referred to the Standing Committee
on Appropriations for consideration and report in terms of the
Money Bills Amendment Procedure and Related Matters Act,
2009 (Act No 9 of 2009):
(a)
Appropriation Bill [B 6 - 2015] (National Assembly –
proposed sec 77).
(b)
Division of Revenue Bill [B 5 - 2015] (National Assembly
– proposed sec 76).
Membership of Committees
The following changes to Committee membership have been made by
the Economic Freedom Fighters:
Portfolio Committee on International Relations and Cooperation
Discharged:
Appointed:
Appointed:
Moonsamy, Ms M
Maxon, Ms HO
Malema, Mr JS [Alternate]
Portfolio Committee on Home Affairs
Discharged:
Appointed:
Gardee, Mr GA
Maxon, Ms HO
Portfolio Committee on Social Development
Discharged:
Appointed:
Maxon, Ms HO
Ketabahle, Ms V
Portfolio Committee on Rural Development and Land Reform
Discharged:
Appointed:
Mngxitam, Mr JA
Matiase, Mr NS
Portfolio Committee on Defence and Military Veterans
Discharged:
Appointed:
Ramakatsa, Mr RP
Khoza, Mr NP
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351
Portfolio Committee on Tourism
Discharged:
Appointed:
Khoza, Mr NP
Ramakatsa, Mr RP
Standing Committee on Appropriations
Discharged:
Appointed:
Litchfield- Tshabalala, Ms K
Louw, Ms EN
Portfolio Committee on Science and Technology
Discharged:
Appointed:
Khoza, Mr NP
Litchfield- Tshabalala, Ms K
TABLINGS
1.
The Speaker
(a)
A letter, dated 4 March 2015, was received from the Minister of
Finance, requesting a technical correction to the allocations for
the Municipal Disaster Recovery Grant as contained in
Annexure W4 to the Division of Revenue Bill [B5-2015].
Referred to the Standing Committee on Appropriations for
consideration.
COMMITTEE REPORTS
National Assembly
1. Report of the Portfolio Committee on Mineral Resources on its
oversight visit to the North West Province, on the 23 – 26
November 2014, dated 04 March 2015
The Portfolio Committee on Mineral Resources, having undertaken an
oversight visit to North West, reports as follows:
1.
Introduction
The Portfolio Committee on Mineral Resources undertook an oversight visit
to North West Province from 23 to 26 November 2014. The Committee went
to the North West to see, listen and understand the difficult situation that still
surrounds the operations of the mining sector.
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[Tuesday, 10 March 2015
The North West is known as the leading mining Province in South Africa. It
has more mines operating legally than any other province (338 mines) It has
more mineworkers than any other province. One third of all mineworkers are
employed in the North West - more than 170 000.
If the mining sector is to make its promised contribution to our economy and
to the National Development Plan, the North West is where that potential will
have to be proven.
Mining is a national competency under the Constitution – so there is no MEC
for mines in the Provinces. But while mining is a national competency, it
takes place in provinces and in municipalities.
The national portfolio committee responsible for the oversight of mining
legislation needs to understand how this legislation is working on the ground
in provinces and municipalities.
•
Is mining making its proper contribution to local development?
•
Is the legislation been constructively administered by the
responsible Department?
•
And are the mining companies keeping up their commitments to
contribute to development – about which they have made clear
undertakings in their social and labour plans and in the mining
charter?
2.
Background
A delegation of the Portfolio Committee on Mineral Resources (the
Committee) visited North West Province from 23 – 26 November 2014
The Committee visited Royal Bafokeng Platinum, Anglo American Platinum
and Lonmin to understand the views of local communities, regional DMR
officials and unions as well as management. The resolution of labour
difficulties on the platinum mines is an essential condition for the country to
realise the economic benefits that can be obtained from our mineral wealth.
The visit comprised an orientation briefing by the Regional Manager of the
Department of Mineral Resources, a tour to the mines including the mines’
operations, the outline of their social and labour projects and a meeting with
Traditional Leaders in the North West Province.
3.
Composition of Delegation
3.1
Parliamentary Delegation
The delegation was composed of the Chairperson of the Committee as the
Leader of the delegation, Mr S Luzipo (ANC), Mr ZMD Mandela (ANC), Ms
MV Mafolo (ANC), Mr I M Pikinini (ANC), Mr J Lorimer (DA) joined the
delegation on 26 November 2014
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Accompanying the committee was the Committee Secretary Miss A Boss,
Committee Researcher, Dr M Nicol, Committee Assistant, Ms S Skhosana.
3.2
Department of Mineral Resources
Mr J Raphela, DDG, Mr V Magagula, Parliamentary Liaison Officer, Mr
M Mothiba, Principal Inspector of Mines, Mr X Mbonambi, Deputy Chief
Inspector.
4.
Meeting with Office of the Premier
Mr Supra Mahumapelo, the Premier of the North West Province delegated
Advocate Karabo Kgoroeadira, the chairperson of the mining sector
stakeholder coordinating committee to brief the Members on mining
developments in the Province.
The mining sector stakeholder coordinating committee was appointed by the
Premier in 2014, among others, to monitor mining sector transformation
programmes and advise the premier on activities related to the
implementation of the Mining Charter and the social and labour plans (SLPs)
of various mining companies. The Mining Charter and the SLPs are
fundamental aspects of the Mineral and Petroleum Resources Development
Act (MPRDA), No. 28 of 2002. The committee also seeks to promote cooperation on mining issues between the local, provincial and national
spheres of government.
Advocate Kgoroeadira explained the strong connection that North West
communities have to the land. The land is not a commodity to be bought and
sold. It has spiritual value. The land actually owns the people. Indigenous
mining communities experience mining as an infringement of their rights to
the land. Australia and Canada recognise the land rights of indigenous
peoples, but that is not the case in South Africa. In the past, profits went only
to the state and to mining companies and conflict grew from the divergence
of interests.
There is a need for mineral equity and sustainable development that draws
together the state, mining companies, indigenous communities and the mine
workers. Community consent should be required for mining on communal
land as is specified in ILO Convention 169 (the Indigenous and Tribal
Peoples Convention, 1989).
Mining is central to the economy of the North West. Mining is what drove
imperialists to take over the country. Democracy has been good for the
mining sector. It has taken advantage of the opportunities it created to
relocate head offices, merge companies and extend operations globally. But
the majority of people have still not benefited. Marikana exposes South
Africa’s structural weaknesses. Organisations like the Bench Marks
Foundation and MACUA (Mining Affected Communities United in Action)
have highlighted the frustrations of the youth in the North West with mining
issues in the Platinum Belt.
The MPRDA represents a significant step to deal with the legacies of 140
years of mining. It provides for social and labour plans that must uplift
communities, improve skills and develop infrastructure. Communities could
benefit from the requirement for 26 per cent local ownership by 2014.
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[Tuesday, 10 March 2015
Advocate Kgoroeadira outlined the need for improved co-operative
governance in mining and called for the national Department of Mineral
Resources (DMR) to re-examine how it helps communities. The absence of
the direct involvement of communities in deciding on the right to minerals is
an ongoing problem. Traditional councils are not in tune with the cooperative governance skills which are needed to negotiate effectively with
mining companies. The DMR needs to educate indigenous mining
communities. Control at local level is complex and not easily
comprehensible. There have been examples of tokenistic participation where
elites have been targeted for participation and there has not been collective
community inclusion in resource utilisation.
The consequences of the slow pace of transformation in mining is best
illustrated by demands for nationalisation of the mines. South Africa has the
highest level of mineral wealth in the world. But this has not been passed on
to the people.
Advocate Kgoroeadira said that there is a lack of access to data about
mining in the province. Communities are suspicious of the licensing
decisions of the DMR. The DMR issues licences for prospecting and mining
without the community being properly consulted. Often the people who get
the licences are not from the North West Province but from elsewhere. This
creates serious conflict. The DMR should inform the Provincial Government
when it grants licences on land in the North West.
The DMR amended the Mining Charter in 2010 to allow them to revoke
licenses when there is no compliance with the Charter (under Section 47 of
the MPRDA). This should be implemented, but the North West government
finds that the DMR is reluctant to do so.
Mines are major users of water and are in competition with domestic and
agricultural users of water. Effluents discharged by mines also create water
problems. Mining licenses should not be granted unless water issues have
been dealt with. Conflict between mining and agriculture is a major issue.
The DMR needs assistance in implementing its laws. This could be assisted
by creating a mineral resource department at provincial government level.
Advocate Kgoroeadira’s contribution from the office of the Premier was
supplemented by insights from the three MEC’s who deal with finance, rural
development and traditional affairs:
The Province sees mining as temporary in nature. The permanent foundation
of the North West economy for the future is agriculture, culture and tourism
(ACT). Mining in just an investment – a catalyst – which must be used wisely
to support ACT. Water sources and land used by mines need to be properly
rehabilitated for agriculture. In areas like Orkney, mining has left ghost towns
and dumps of waste.
Most of the mines in the North West are on traditional land. Royalties accrue
to communities (under the transitional arrangements within the MPRDA) but
the controversial “D-account”, into which royalties have been deposited by
mines, has not been audited for 20 years. The North West government has
had meetings with the Public Protector on this issue and it is receiving
attention.
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There is a move away from royalties to shares in the mining companies. The
MECs said, however, that “where there is mining there is conflict”. DiKgosi
sign agreements and contracts alone, then the youth want to know what has
been agreed. Contract management is key. The DMR step back and leave
the Provincial Government to resolve the difficult issues.
The province feels a lot of pressure from migrant labour. When shafts close,
people don’t go back home. They stay. The Bapo-ba-Mogale community
complain that people from the mines settle on their land without permission.
The MEC’s repeated the earlier statements that communities in the province
find that there is a lack of access to data from the DMR.
•
•
•
•
5.
Communities do not know what is in the SLPs that the DMR has
approved.
There is a general lack of trust in the licencing processes of the
DMR.
There is no proper consultation with the community of whose land
the prospecting and mining is to take place. This leaves the
province to manage the great dissatisfaction that arises.
The DMR gives licenses to people from other provinces and other
countries when there are local people who should have these
licenses.
Briefing by Regional Manager of DMR in Rustenburg
The Acting Regional Manager outlined the legislative footprint. He indicated
that in 2004 the law on regulation of Mineral Resources changed from the
then Minerals Act and the Mineral and Petroleum Resources Act was
enacted as the new law to regulate the minerals and petroleum sector; with
the DMR responsible for the licensing and regulation of mineral resources
and PASA responsible for the licensing and regulation of all petroleum
resources. As part of the transformation of the mining industry, the mining
charter was adopted and gave birth to Social and Labour plans. The Act was
amended in 2008 and came into effect in 08th July 2013. The new
amendments are also up for consideration currently. The mining charter was
also amended in 2010. He reported the number of rights issued in the
Rustenburg district for the companies that the Committee were going to visit.
BRPM has been issued 30 year mining rights with 28 years of mining
remaining. Historically Disadvantaged SA (HDSA) ownership is 67% (against
the Mining Charter target of 26%). Lonmin has been issued 30 year rights
with 23 years remaining and HDSA ownership is 18%. RPM has been issued
30 year rights with 28 years remaining and HDSA ownership is 85%. Impala
has been issued 30 year rights with 24 remaining years of mining and 28% is
in HDSA ownership.
5.1
Mining Related Challenges
The DMR reported that about 70% of the operating mines in Rustenburg are
old order converted mining rights and 30% are new order mining rights. The
commodities mined are commonly PGMs, chrome and associated minerals
and granite/gabbro norite. Although most are operational, some were
affected by the economic meltdown and the industrial strikes which led to
scaling down and retrenchments. The Lonmin Karee mine was put under
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[Tuesday, 10 March 2015
care and maintenance in 2007, and some 10 000 employees were dismissed
after the 2011 strike on the Karee K3 shaft and the Marikana 2012 incident.
In 2012 Impala experienced labour related challenges which led to a long
strike which affected three major platinum producers (Lonmin, Impala and
Anglo). The five month long wage strike in 2014 had severe impact on the
local economy of Rustenburg. SLP implementation is the first generation
SLPs on the first 5 year life cycle from the date of conversion and the second
circle is starting now in 2014.
5.2
Mining Related Community Issues
The Acting Regional Manager reported that the Luka Community has raised
the issue with Impala Platinum Mines Limited that no information is
distributed to the community from their representative. Royal Bafokeng Ward
Councillors who sit in the Impala Future Forum where all the consultation
happens, and even Kgosana’s (Headmen), are not conversant with the
developmental issues. Their expertise is in Traditional issues hence they are
not able to raise their needs accordingly in this forum. The Luka community
indicated that they are not benefiting from the procurement of Impala. There
is a group of 19 women who were trained in the laundry business with a
promise that they will be given a laundry opportunity in the company,
however this laundry business was given to another company. The
community also have a problem with tailings dams that are creating pollution
in their community.
6.
Visit to Bafokeng Rasimone Platinum Mine Joint Venture (BRPM)
The delegation was welcomed by HR Executive and present was the Head
of JV Operations, Head of JV Concentrator, Mine Managers Royal Bafokeng
Platinum and National Union of Mine Workers (NUM) Leadership.
The company structure was outlined. It is a Joint Venture that is 67% owned
by Royal Bafokeng Resources and 33% by Anglo American Platinum. For
lost time injuries, BRPM strategy is to move from maturity to resilience with
the aims of zero harm, zero fatal injuries, zero occupation diseases (health
including noise-induced hearing loss (NIHL) and zero spills of contaminants
into the environment. BRPM was reported to have a poor safety start in
January but after actions plans in terms of effective leadership, good
designs, implementation of systems and zero harm behaviour, good
recovery in April and May were seen. There has been reduction in labour
costs with rationalisation and shared services with Styldrift shaft.
BRPM reported that they had major capital projects which included phase 2
North and South Shaft Merensky (now complete to 10 level), North Shaft
Phase 3 (ahead of schedule), North Shaft Chairlift (ahead of schedule and
below cost) and Housing (R255 million). All these projects amounted to
investment of R3,145 million. SIB projects included a water treatment plant,
ICT optimization and Social and Labour expenditure, which amounted to
R215 million since 2010.
With regards to Styldrift safety performance, the mine obtained international
OSHAS 18001 certification for its occupational health and safety
management system. One fatality had occurred - after 3.5 years - but there
were no serious injuries recorded in the year to date. The key aspects to be
addressed by the teams were the RBPlat safety frame work, maintaining the
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certification of OSHAS 18001, attending to standards and procedures,
training for new workers and those coming back from leave on site induction
and training and contractor management. The focus on new activities
included working at heights (silos, conveyors), staff sinking (completion of
main shaft), ground support and gases (intersection on site) and material
handling (equipping/construction)
6.1
Employee Relations and Housing
Mr Colin Alexendar, Senior HR Manager gave an overview of the way mines
had housed black workers across five phases. Phase one, from 1886 to
1901, was the compounds. Phase two, the establishment of hostels form
1901 -2009. Phase three, the establishment of townships from 1923 – 1994.
Phase four, the establishment of home owners allowance (HOA) and living
out allowances (LOA) and phase five, mine housing delivery between the
late 1980’s and 1990’s. He gave a background of the wage agreement
between employees of RBPM and the mine.
Employees of RBPlat are faced with the following challenges, 25% of
employees are known to have impaired credit status due to garnishee
orders. A further 15% are assumed to have impaired credit statuses and
these employees are unable to get access to normal credit. Where
employees are able to raise credit, lending institutions are insistent on
deposits to be paid by borrowers upfront, varying from 10% to 30% of the
value of the property, which is prohibitive for most employees.
RBPlat’s model should enable all employees to gain access to housing
irrespective of the above mentioned challenges. Employees are able to apply
contributions made by RBPlat to gain access to decent accommodation.
Employees over time will build reasonable equity for themselves i.e. an
employee/contributor at Patterson A level occupying a house of about
R537 000 will in ten years have a proper worth R1 058 781 at a growth rate
of 5%. The model should further ensure that employees/contributors would
be in a position at retirement age to sell the houses to re-establish
themselves at their place of origin.
Mr Alexander presented the Developmental Wholesale Funding Model. The
DFI will provide finance to Royal Bafokeng Resources Properties (RBRP)
and hold Primary Surety over the properties. RBRP will receive the proceeds
from RBPlat and Employees monthly. DFI to raise capital (20 year Finance)
to enable it to build houses for RBPlat employees. RBPlat contributes HOA
and LOA and an agreed additional contribution. Employees will be the
registered users of the property with various conditions over the right of use
title (i.e. they must remain employed with RBPlat to enjoy the protection of
scheme. Each employee contributes between 8% to 12% of post-tax income.
Housing funding for employees will total R2, 7 billion in the period from 2013
to 2018/19. This follows the formation of 5-a-side Housing Investigate
Committee (HIC) with employees in terms of the 2011 wage agreement.
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6.3
Visit to Waterkloof Hill Estate (Housing Project)
The Committee was taken to the Housing Project which Royal Bafokeng built
for their employees. The houses are 80 square metres for A and B Band
(less skilled workers).
7.
Meeting with the Traditional Leaders
The Committee held a meeting with the Traditional Leaders in the North
West The Chairperson, Kgosi Maubane welcomed the delegation from
Parliament and introduced the delegation of traditional leaders. The
Chairperson outlined the purpose of the visit which was to engage with
NHTL members with issues affecting mining at Provincial level. He indicated
that the committee had a stakeholder engagement on the 20th August with
mining stakeholders and the committee felt that as the time goes it needs to
engage with traditional leaders and the mining communities.
During the discussion between the NHTL and the Committee, the Traditional
Leaders commented as follows:
•
•
•
•
•
•
•
•
•
•
Welcomed the engagement with the committee and took it as a first
of many engagements to follow. The Platinum belt has a problem
and they indicated that Marikana is a game changer.
Raised concerns of not being invited to the Mining Indaba and
Mining Lekgotlas.
Proposed joint oversight over mining with the Human Settlement
Committee and the Traditional Affairs committee
Raised concerns about the actions of the DMR and Department of
Rural Development. An example was given whereby communities
are receiving rights to minerals over Amakhosi. e.g. People have
occupied land illegally by putting squatter camps in the land belong
to Amakhosi. “We can’t have people from wherever having rights
over our land”.
Were concerned that mining divides the communities. “”Mining to us
has become a curse – some are consulted, others are not and the
DMR grants licenses.” “Mines are not consulting with people or land
owners.”
Indicated that there was collusion between Department of Mineral
Resources and Department of Land Affairs. An example was given
in Thabazimbi where Anglo spoke to a Headman and made a deal
to pay R123 000 per year to him. The issue was raised with the
Minister and nothing was resolved. Under the land restitution
process, land comes not to the Kgosi, but to a group of claimants.
Strongly raised the issue of political influence. Political leaders
influence who gets shares in mines without declaring this to
traditional leaders.
Were concerned about compliance by mining companies with the
mining charter. Can the PC look into the validity of contracts
between mining companies and mining communities?
Complained that skills development is not happening in their areas.
Indicated that there was a big concern that the communities should
benefit from the mines. Mines should develop small businesses
related to beneficiation or mine procurement. But they never give it
to local people. “They call people from Joburg ‘local procurement’”.
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•
•
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Proposed that housing conditions should be visited.
Responded with shock at the fact that the IDC has funded a
Chinese company which mines cement. They argue that the land
belongs to the community and no community member is employed
in that mine. Instead about 500 Chinese work there.
Brought up the issue of BEE partnership as a serious concern. First
consultation should be done with the communities of the area to find
a partner, before someone from another province is approached.
8.
Meeting with Anglo American Platinum (Precious Metal Refinery)
8.1
Welcome and Safety Brief
Ms S Mkhabela, Executive Head, Corporate Affairs welcomed the delegation
from Parliament and introduced her team. She handed over to Mr Fortune
Mashimbye who gave a safety briefing.
In the area of North West, Anglo Platinum operates in Bojanala District
municipality and Rustenburg, Moses Kotane, Madibeng Local Municipalities.
A business strategy announcement was made in July 2014. Anglo is
repositioning its investments in line with the Company’s vision to create a
more sustainable, socially acceptable and profitable Platinum portfolio for the
future. By following this strategy, Anglo Platinum will be in a position to have
improved safety, better wages for more high skilled and productive
employees, less dependence on migrant labour, better living conditions and
housing for employees and a continued ability to ensure mining communities
benefit form mining. The new strategy will provide flexibility to grow the
portfolio in line with market demand whilst retaining the ability to expand
production as necessary and to make more profits, guaranteeing
sustainability through the cycles.
It was reported that some existing operations do not form part of the vision
and would be better placed in the hands of a new owner who would be able
to provide the focus and capital for the operations. The Rustenburg
operations are to be prepared for sale. AAP will be retaining ownership of the
processing plants and smelter in Rustenburg and will continue to implement
social commitments in Rustenburg. The company is not closing mines. It is
selling mines as going concerns. Already 81 bids had been received for
Union Section, three of which are under detailed consideration. The intention
is to sell to a good operator – not to another Aurora. The sale will go through
in 2015/16 and the mine still has 25 years of life. There is no shrinkage in
terms of investment in SA, in fact investments of R70 to R100 billion are in
planning stages.
8.2
Implications on SLP commitment and Community Projects
The company invests across a broad spectrum including community
investments: SLP’s and Corporate Social Investment (CSI) include supply
chain (local procurement and Supplier Development), Housing, and
Alchemy- a multi-billion Rand social development project, based on an
integrated, sustainable and empowered community development framework
model for share ownership, training and development. There are Local
government and Traditional Authority Capacity Building Programmes and
Infrastructure.
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With regards to community aspects, about R300 million is available annually
from AAP for community development projects via SLPs and CSI in South
Africa. The focus is on local projects around the operations: including;
infrastructure e.g. schools, clinics and water, education; health e.g. mobile
clinics and medial provisions; enterprise and small business development;
agriculture e. g. Groenfontein. There is a need for macro and more strategic
community development projects. AAP indicated that they are committed to
improving the lives of the communities around the operations and need
Government support to improve effectiveness. An average of R40 million is
spend annually in the Rustenburg region.
With regards to enterprise and supplier development programme, AAP has a
comprehensive supplier development programme managed through supply
chain functions and Anglo American Zimele. AAP has six small business
support hubs – Rustenburg, Mogwase, Bokoni (Atok), Tubatse (Burgersfort),
Mokoopane and Thabazimbi. In 2013, 96 new business were supported by
AAP. AAP is financially supporting 36 companies with a combined annual
turnover of R232.5 million, creating 644 new jobs and sustaining 486 existing
jobs. In 2013, AAP spent R19.3 billion on procurement, R11.1 billion of which
was spent with BEE- compliant companies. R2.6 billion (23%) was spent
locally (in Limpopo and North West). Beneficiation offers opportunities to
establish local enterprises.
To mitigate the negative impact of the Platinum belt strike, the following
activities were carried out by supply chain:
-
8.3
Interest on loans given to local businesses through Zimele was
frozen until the situation normalised
Shortened payment cycle of 7 day after submission of invoice was
introduced.
Affected companies were allocated opportunities in other Anglo
operation where there was no industrial action
Employees were provided with food parcels to ensure a healthy life
style
The contract to build the Western Limb DC valued at over R135
million, was unbundled to local communities from Photshaneng,
Thekwaneng and Mfidikwe communities
Total spend with local HDSA owned and HDSA empowered
companies for the period 1 January 2013 to date in the Rustenburg
area amounted to R1 737 784 293.72
Motivational speaker was brought in (Dr Aaron Lechuti), to help
reorientate and motivate local businesses.
Provincial infrastructure projects supported by AAP
Various water initiatives supported through the Olifants River Joint Water
Forum (JWF) e. g. raising of Flat Boshielo dam, Lebalelo pipeline and De
Hoop dam. Equivalent of circa R1 billion of infrastructure projects completed
or in progress. 4 AAP employees allocated part-time to the forums’
infrastructure initiative. N11 safety project, study for the upgrade from
Mokopane to the mine and study for N11 re-alignment. R37 road risks
mitigated-upgrading section between Modikwe and Polokwane (Upgrades
from Modikwe to Tubatse being planned). New R37 carriageway and
interchange at Polokwane smelter which AAP RPM contributed R20 million.
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Skills development Initiatives
In 2013, AAP spent R470 million on skills development (internally and
externally). 354 learners participated in various engineering training schemes
(86% were HDSA candidates and 25% women) and 196 learners qualified
during the year. Of the 273 candidates on engineering learnerships who
qualified, 169 were Platinum employees and 30 were members of
communities: 50 more learners from communities started in October 2014.
1,511 learners participated in six specialised trade-related short courses.
Over 200 schools benefited from Education support programmes from early
childhood development to High School levels with focus on developing
maths and science. Access to ABET was provided to 1,320 employees, 87
contractors and 408 community members. Bursaries were provided to 282
people, of whom 82% were HDSAs and 30% females.
8.5
Municipal and
Programme
Traditional
Leadership
Capacity
Building
The Development Bank (DBSA) and Anglo American Corporation entered
into an MoU in March 2011 to collaborate in capacity building in selected
municipalities in Anglo mining areas. The proposed partnership aims to
leverage the capacity of the two institutions for holistic implementation of
capacity building initiatives in the Anglo American labour sending
municipalities. The main objective is to build and enhance institutional
capacity and capacity for service delivery, alleviate poverty and promote
municipal sustainability. The project objectives include Municipal and
traditional capacity building initiatives, to have local service delivery. Project
cost is estimated at R60 million over the three year period, from 2014-2016.
Municipalities covered include Mogalakwena, Thabazimbi, Greater Tubatse
Municipalities (Limpopo), Moses Kotane, Rustenburg (North West) and King
Sabata Dalindyebo (KSD) in the Eastern Cape.
8.6
Housing
All hostels have been converted from shared rooms to single or family
occupation, with Anglo Platinum today focused on developing family units
within communities close to the operations. Some 8 700 employees reside in
converted hostels, but the number has been reportedly decreasing. In most
cases, single room occupancy has been achieved thereby exceeding the
2013 Mining Charter target of 78%. Around 6,260 company owned homes in
total are leased to employees in high job categories. A substantial challenge
relates to the less-skilled 27 000 employees who receive a living-out
allowance, many of who live in informal settlements or backyard
accommodation in the villages around the mines. The living- out allowance is
R1 840 per month, yet most employees spend a fraction of this on
accommodation, the balance used for other expenses.
Home ownership options are encouraged through various projects, with
1 300 homes built since 2010. The housing development model includes the
provision of water supplies, sewerage, electrical reticulation, road and storm
water systems. Approximately 1 000 of the units form part of Seraleng social
housing project in Rustenburg in North West Province.
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8.7
[Tuesday, 10 March 2015
Site Visit to Tlhabane West Primary School
The delegation was taken to one of the projects with which Anglo American
Platinum was involved. The principal of the school welcomed the delegation
and guided them through the school premises and explained the role played
by Anglo American Platinum.
He said discussions about this school project started as early as 2005,
following a concern that the Department of Education had in relation to
children from Tlhabane West having to attend school at the other side of the
town. Since most children were walking to school they had to cross over the
busy Provincial Road, R104. In 2008 Anglo American Platinum took a
decision to fund the construction of this school.
The school currently accommodate 1 047 learners and initially the roll was
just under 500 learners. Anglo American Platinum provided the physical
infrastructure and some equipment for the school at a cost of just over
R12 500 000 in 2010 terms. The construction of the school commenced late
2009 and was completed in December 2010 and opened in March 2011. The
contractor that was appointed to complete the project was based in
Rustenburg and in accordance with the Anglo American Platinum’s
procurement policy is HDSA compliant. Two hundred and thirty three jobs
were created during the construction of the facility. These can be broken
down as follows:
•
•
•
One hundred and twenty four males and two females from
Rustenburg area;
Nine males and six females from Ward 8; and
Twenty nine employees were brought in by the contractor.
The school has, amongst others, 24 classrooms an administration block,
resource centre, a computer room and library. Stakeholders involved with
this project included the Department of Education, Department of Mineral
Resources, Rustenburg Local Municipality, unions, other government
officials and Anglo Platinum representatives.
9.
Meeting with Lonmin
9.1
Overview of Operations
Ms Lerato Molebatsi, Executive Vice President, Communication and Public
Affairs welcomed the delegation from Parliament and introduced the
management team from Lonmin. The unions represented in the mine were
present except for the National Union of Mineworkers (NUM). Mr Johan
Viljoen, the new Chief Operating Officer presented the overview of
operations. [All the senior management of Lonmin has been replaced since
the Marikana tragedy in 2012]. The operational flow of Lonmin was reported
as exploring, mining, concentration, smelting, base metal refining and
precious metal refining. With regards to mine safety, it was reported that one
calendar year without fatality was achieved from 27 October 2013 to
26 November 2014. This was a first for Lonmin and included limited contract
mining during strike and ramp-up after the strike. The Lost Time injury
Frequency Rate (LTIFR) improved by 40% over 5 years and industry safety
leadership was maintained.
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Mr Viljoen reported how the year end results and operation performance had
been impacted by prolonged strike. He indicated that there was one fatality
on the 26 October 2013. LTIFR was reported as 3.34 – a 4.6% year on year
improvement. Platinum sales were reported to be on 441,684 ounces. Lost
platinum saleable ounces was reported to 391,000 due to the strike. The net
debt was $29 million and committed facilities was reported at $575 million. A
strategic asset review had identified significant savings. The three year wage
agreement was signed.
Mr Viljoen explained how Lonmin spends the cash they earn and indicated
that no dividends were paid. The costs account for 76 cents in every dollar
earned, mostly in South Africa. 60 percent of the costs are labour related and
20 cents in every dollar kept for future investment mostly in South Africa.
2 cents in every dollar was paid in tax and 1 cent in every dollar used for
community projects. Lonmin employs 38 000 people and 304 000 people
dependant on Lonmin for their livelihood.
9.2
Employee Value Proposition
Mr Abey Kogtle, Executive Vice President, Human Resources gave a
presentation on the involvement of HDSAs. He reported that the HDSA in
management is at a target of 40% of which 48% included white women in
2014 and 47% in 2013. The target on women in mining was reported to be at
10%. The total women in workforce for 2014 was 8.2% and in 2013 8.0%
and women in core mining for 2014 was 5.3% and in 2013 was 5.1%.
Bursaries allocated in 2014 numbered 89, 56 (63%) was allocated for
members of surrounding communities and 74 (83 %) for HDSAs and
24 (27%) for females.
Lonmin had a BEE deal with Bapo ba Mogale community.. With regards to
ESOPs (employee share ownership plans), employees have the opportunity
to benefit in a profit-sharing scheme. The implementation will give Lonmin
HDSA equity credits of 3.8 %.
Mr Kogtle reported that the three year wage deal provides stability and
embeds relationships. The relationship charter emphasises respect, trust,
transparency, communication and effective relationships. He reported that
the company had taken steps on the way it works by improving relationships
between managers and employees and management/AMCU. A two day
leadership workshop was held in August 2014, including union members.
9.3
Community value Proposition
Ms Molebatsi presented the community value proposition. Amongst the
projects Lonmin is doing, the company has spent R7.3 million on education,
R10.7 million on skills development, R5.1 million on community health and
R38.5 million on local economic development for the 2014 financial year. Ms
Molebatsi reported that genuine robust stakeholder engagement relationship
building is vital and Lonmin management communicate on key issues
transparently, consistently and timeously. Functional partnership between
Government, organised labour and community leaders is essential. She
indicated that the tragic events at Marikana in August 2012, the protracted
strike of 2014, and media hype surrounding the Farlam Commission of
Inquiry impacted negatively on Lonmin.
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[Tuesday, 10 March 2015
She reported that education and skills development is a long term
investment for Lonmin. Benefit support and carry learners through the
educational value chain to create employable skilled individuals. With
regards to community health, a holistic healthcare service is available to
employees and the broader community. Community health programmes
comprise awareness, promotion, prevention and infrastructure development
to alleviate the issues. The Economic footprint and CVP project highlighted
need to continue improving living conditions. Local economic development
investment includes: bulk water infrastructure, road infrastructure, waste
removal and lighting to improve public safety. With regards to enterprise
development, Lonmin is committed to local enterprise development. Potential
local suppliers are assisted with proposals to bid for procurement
opportunities. Lonmin entered into a memorandum of understanding with
National Empowerment Fund to fund small business that is awarded with
Lonmin contracts. MoUs were also signed with Shanduka Black Umbrellas
and Badumela Projects, a youth- owned enterprise from Bapong.
Ms Molebatsi reported what Lonmin is doing differently. She indicated that
greater direct engagement is required to ensure that every employee has a
voice. Taking back the relationship with employees is assisted by the
formation of a communications and public affairs division (of which she is the
head), a CEO roadshow, operational Legotla’s, making communicating with
your team a Key Performance Indicator (KPI), Lonmin/AMCU relationship
workshops, a communities campaign and care for widows and dependants
post August 2012. In addition industry collaboration, ESOP/Community
Trust, the Bapo ba Mogale BEE Transaction, an Employee Call Centre and a
Culture and Values campaign along with a Communication Audit have all
had positive impacts.
In terms of Housing and living conditions and migrant labour she reported
that Housing is a South African issue not only a mining industry problem.
Lonmin has collaborated with local authorities on infrastructure
developments, hostel conversion into single quarters and family
accommodation. The dismantling of the migrant labour system is not
immediately possible even if it is desirable. She indicated that the Eastern
Cape received R1 billion in remittances per annum from migrant mine
workers. An depth research project on migrant labour has been
commissioned by Lonmin to consider possible ways forwards that could be
proposed..
9. 4
Site Visits
The delegation visited Marikana Ext. 2 where most Lonmin employees reside
and visited the hill that was the site of the Marikana tragedy in 2012. It was
reported that in October 2013 Lonmin donated 50 hectares of land consisting
of serviced stands, to the Department of Human Settlements, Public Safety
and Liaison of the North West Province and Rustenburg Local Municipality.
The aim was for local government to develop the land into new integrated
human settlements, comprising a range of high and low-density residential
housing together with all associate municipal services. The donation forms
part of Lonmin’s commitment to support the Presidential initiative to improve
living conditions and supports the development of a vibrant, sustainable and
dignified lifestyle for the people living in the Marikana area. To support this
initiative, Lonmin’s Community Development Department will build a school
as well as a new clinic in the area over the next four years.
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The delegation also visited the hostel conversion. The conversion of 128
traditional single sex blocks into a mixture of family and bachelor units was
expected to be complete at the end of December 2014. Upon completion it
will yield 796 family units and 1 868 single units. This conversion process is
measured and monitored by the Department of Mineral Resources. All
conversions to date have been carried out by Black-owned GLC contactors
which Lonmin has incubated, mentored and assisted. In addition to these
conversions, Lonmin is also investigating the feasibility of developing the
open spaces between the existing renovated buildings to create additional
accommodation and leverage off existing bulk infrastructure. An amount of
R500 million has been approved to be spent over the next five years to
develop a village that will have the capacity to be home to between 4 000
and 5 000 families and will include security upgrades, landscaping, crèches,
learning centres and recreation facilities.
9. 5
Bapo ba Mogale Royal Palace
Lonmin’s host community is the Bapo ba Mogale traditional community. The
company has recently entered into a BEE transaction with Bapo that heralds
a new milestone in that relationship. Lonmin has also assisted in 2014 with
training of staff at the Royal Palace through the Company’s Portable Skills
Training Programme which aims to provide community members with noncore mining skills. 158 community members (of which 90 are from the Bapo)
were trained during 2014, better equipping them to access job opportunities
in the local communities. Lonmin also offers ABET, a Mining Skills
Programme, a Process Division Training Programme, an Engineering
Learnership Programme and a Mining Technical Skills Programme for
community adults looking for work in the mining industry.
10.
Findings
The Committee observed that:
•
•
•
•
The issue of housing for mineworkers and the need to transform
the migrant labour system were the strongest points that came from
the visit.
The Committee saw efforts from many companies to give dignity to
workers so more can live with their families close to the mine. But it
is not enough. There are still many mineworkers and mining
communities who live in unacceptable conditions. This is an issue
on which all stakeholders have to work together more effectively.
All mines are now working with the trade unions and with the
communities to move beyond the difficult and tragic period of
Marikana and the strike. Some companies presented a very rosy
view of the situation now. Others admitted more openly that they
are struggling to find new ways of operating, that progress is still
uneven and that there are challenges that still need to be
addressed. We need a mining sector that reflects the best features
of our new democracy – not one that is bound only to the problems
of the past.
The North West has huge mineral wealth. It has more mines
operating legally than any other province. Mines can be a catalyst
for economic development. There is much more potential for the
local procurement of mine supplies and skills which is not being
realised at present. There is a need for real partnership and cooperation to resolve these issues
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[Tuesday, 10 March 2015
•
•
•
•
•
•
•
•
11.
In the meetings with the Provincial government, the Department of
Mineral Resources (DMR) and the National House of Traditional
Leaders it became clear that mining creates conflict when it occurs
on land that is owned or occupied by a community. The DMR
follows the letter of the law but it needs also to educate
communities on what their rights are when prospectors want to
come on their land.
The DMR does not adequately share information with communities,
traditional leaders and the Provincial Government on what is
intended by any possible new mine. Communities are not aware of
the law and this often raises expectations unrealistically and
creates intense disputes which traditional leaders and the Province
find it very hard to deal with.
The Portfolio Committee believes that it made very useful contacts
on its visit and will undertake its oversight responsibility by
reflecting the views of all sides and suggesting where intervention
by stakeholders can be useful.
Communities are often suspicious of the actions of traditional
leaders and trusts. In some cases this is because they lack
information and understanding. In other cases – such as the
disappearance of community money from the D-account –
community dissatisfaction is well-founded (according to the MECs
who met with the Committee).
The misunderstandings around the DMRs policies for the Issue of
licenses - including prospecting and exploration - need to be
attended to.
The DMR should request the local traditional house to be part with
DMR when evaluate the original SLP, any revised SLP and
performance on the SLP.
The safety of mine workers, despite reported improvements, should
be closely monitored.
Most of the mining companies have complied with the Mining
Charter requirement for the conversion of hostels to single and
family accommodation. Only Lonmin had not complied as it had still
hostels with shared facilities when the Committee visited.
Recommendations by the Committee
The Portfolio Committee on Mineral Resources having heard evidence from
all stakeholders listed above recommends the following:
•
•
The stakeholders in the mining sector – both in the North West and
in other mining provinces – need to accord strong urgency and top
priority to the review of the migrant labour system on the mines and
to the discussions to reform labour arrangements so that
mineworkers all live in safety and dignity.
The present initiatives to deal with the distressed conditions of
communities surrounding the mines must be taken forward in broad
consultative processes, including the steps emphasised by the
President in the 2015 State of the Nation Address.
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•
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Strong and healthy mining communities are vital for the future of
the mining sector. The DMR is one of many players involved in
these issues of housing and living conditions. The DMR needs to
work co-operatively with other government departments both
nationally and provincially and with municipalities.
The review and reassessment of the Mining Charter needs to
consider more carefully the potential for the local procurement of
mine supplies and skills. Mines are huge consumers of a wide
range of inputs. This secure demand base could be better used to
develop local businesses and increase the positive economic
impact of mines on local economies.
The DMR needs to have an active, effective and sensitive
communication strategy that improves transparency and real
understanding of its role and the role of mining. In particular:
o The DMR should explain the content of Social and Labour
Plans to traditional leaders and communities and explain
how both are involved in monitoring the SLP and validating
claimed performance by the mining company.
o The DMR should actively engage with the Provincial
Government, traditional leaders and affected communities,
in good time, to inform them of decisions it has made with
respect to both the acceptance and granting of prospecting
and mining rights. It also needs to explain the implications
of these decisions and the avenues available to
stakeholders to influence how prospecting and mining rights
and permits are implemented in practice.
o The DMR should look beyond its narrow obligations under
the law and actively seek to lessen the scope for conflict,
disagreements and misunderstandings around mining. One
good place to start is with the effective sharing of
information.
The North West government should be commended for
establishing the mining sector stakeholder coordinating committee
and for its intentions to address the conflicts in the mining sector in
the province, including those relating to the disappearance of
community money from the D-account.
There needs to be an investigation on government policy related to
the practice of communities exchanging rights to royalties from
mining for shares in mining companies. One concern is that this
trend, which exposes communities and community trusts to the
risks of shareholders, may be used by mining companies not to
allow communities to share in the real benefits from mining, but
simply to allow the company to claim the 26 per cent HDSA
shareholding the company is required to have under the Mining
Charter.
Report to be considered.
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