Mineral and Petroleum Resources Committee Applauds Department’s Support for Artisanal and Small-Scale Mining

The Portfolio Committee on Mineral and Petroleum Resources applauds the government's efforts to open the artisanal and small-scale mining (ASM) sub-sector to aspirant entrepreneurs. The Department of Mineral and Petroleum Resources has promulgated the ASM policy framework and established the ASM Fund in partnership with the Industrial Development Corporation (IDC), as well as the Junior Mining Exploration (JME) Fund in partnership with IDC and the Council for Geoscience (CGS).

Over and above the policy framework on ASM, under the stewardship of Minister Gwede Mantashe, the Department of Mineral and Petroleum Resources on Tuesday, 19 November, briefed the committee that it was is the process of engaging with stakeholders internally to solicit views to amend the Mineral and Petroleum Resources Development Act of 2002 to give expression to ASM.

The department wants the Act to make provision for two new types of permits, namely an artisanal mining permit that will allow mining of two hectares of land over a three-year period and a small-scale mining permit that will allow mining of five hectares of land over a five-year period. The amendments will also make provision for mechanisms to regulate the ASM sector and designate mining areas.

On support for ASM, the department said that it has established the ASM Fund in partnership with IDC. "Over 114 applications for financial assistance were received during the 2023/24 financial year and 20 were approved, totaling R68m," said Mr Thabo Kekana, who is the Deputy Director-General responsible for programmes and projects in the department. Mr Kekana then said that the disbursement of funds is anticipated to be concluded by the end of November 2024.

The approved applications include mining projects in gold, iron ore, sand, chrome and alluvial diamond minerals, and three of them came from women-owned projects. Mr Kekana said: "Of the 20 projects, six are in Limpopo, funded for R26,7m; four in Northern Cape, funded for R14,6m; six in North West, funded for R10,7m; two in KwaZulu-Natal, funded for R10m; and another two in Mpumalanga, funded for R5,4m." He further said that a funding call for 2024/25 financial year is currently underway.

The department also briefed the committee on the JME Fund, which was established in February 2024 in partnership with the IDC and CGS. The department sees exploration as essential to discovering future growth projects to ensure the sustainability of mining. Responding to the decline in exploration, with the global exploration expenditure share dropping from 5% in 2003 to below 1% currently, the department developed an exploration strategy and implementation plan in April 2022. The plan identified the need for an exploration fund to support qualifying junior mining companies.

The JME Fund was launched with R400m initial capital, with the first call of applications comprising R160m jointly managed by the department, the IDC and CGS. The department's Deputy Director-General responsible for mineral policy and promotion, Ms Ntokozo Ngcwabe, said that the JME Fund is a non-repayable grant, which is convertible to equity upon discovery of viable ore. She said: "There is a minimum grant allocation of R5m and maximum of R45m per applicant and no fees to be charged to grant recipient."

Ms Ngcwabe further said that applications are only open for non-listed companies duly incorporated in terms of the Companies Act of 2008, and that the entity must possess a valid prospecting right as defined by the Mineral and Petroleum Resources Development Act. "The entity must have a combined or indirect ownership of at least 51% by black people and must be operating in greenfield or brownfield exploration activities within South Africa," said Ms Ngcwabe.

Explaining further, Ms Ngcwabe said that in its first call for applications, the fund received 114 requests for financial assistance, totaling R3,7bn. However, only six applications were successful, amounting to approximately R125m. She said that two more applicants are undergoing due diligence to maximise the remaining balance of R35m.

"Of the six applicants, two of them will be funded for R26,3m and R20,4m each for exploration of copper, lithium and rare earth elements in Northern Cape. Another two will be funded for R34,5m and R16,9m each for exploration of copper, nickel and cobalt in North West. One will be funded for R13,8m for exploration of rare earth elements and nickel in Limpopo and another one will be funded for R12,5m for exploration of rare earth elements in Mpumalanga," said Ms Ngcwabe.

The Chairperson of the committee, Mr Mikateko Mahlaule, said that the department should make public all the funded applicants from the two funds. He also said that the department should engage further with the unsuccessful applicants to capacitate them for future calls for applications.

Justice Molafo
22 November 2024