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2. PRESENTATION TO SELECT COMMITTEE ON ECONOMIC DEVELOPMENT OF DMR 2010 / 11 ANNUAL REPORT 15 NOVEMBER 2011 Programme 3: Mineral Regulation 2

3. Presentation Outline Non Financial Performance Information Programme 3: Mineral Regulation - Successes - Challenges - Corrective measures Presentation to be read in conjunction with pages 77 to 86 of the DMR Annual Report 3

4. Programme 3Mineral Regulation Purpose To regulate the minerals and mining sectors to ensure economic development, employment and ensure transformation and environmental compliance. Objective To transform the minerals and mining sectors into one that competitively contributes to the sustainable development in the country. 4

5. Economic development through mining has increased. - Of the 625 mining rights issued since 2004 , 435 are already used for mining. Exceeded the target of jobs created through S&LP projects Exceeded the target of granting Rights to HDSA Exceeded the target of women led mining companies licensed Exceeded the target of inspections to monitor and enforce compliance Action to enforce compliance, alternatively to revoke rights initiated resulting from drive on inspections. Successes 5

6. Challenges Approved enforcement and compliance structure for 114 personnel remains entirely unfunded. Drive on inspections diverted resources from processing of applications and prescribed processing timeframes could not be met. Right holders are being found to have not exercised the rights issued to them Whilst the branch may have succeeded in conducting inspections, the effectiveness of the compliance inspections conducted is not yet fully apparent as the remedial processes in terms of Sections 93 and 47 require diligence in finalisation. The branch experienced an increase in complaints from communities. These complaints though wide ranging, border on non compliance by mining companies on SLP commitments. Community in-fighting is exacerbating the implementation of local economic development initiatives Funding (personnel, goods and services) 6

7. CHALLENGES-SEVERE CAPACITY CONSTRAINTS A typical large Region (receives 5 200 applications since 2004, +- 700 applications per year. At 220 working days per year this requires 3 in depth evaluations per day. If say 50% of applications are granted 2 600 inspections are required to enforce compliance, Once in 2 years = 1 300 inspections @ 220 days per year = 6 compliance inspections per day The available capacity is on average 1 (sometimes 2) officials per technical discipline such as Mine Economist, SLP, BEE, etc. To evaluate applications and enforce compliance at appropriate levels with current capacity is physically impossible A volumetric study into the capacity needs of Mineral Regulation was conducted and indicated that we need additional resources. Funding requests were made. 7

8. Corrective Measures Engage National Treasury to fund approved enforcement and compliance post and personnel structure. Implementation of a new electronic system for the lodgement and efficient administration of mining and prospecting applications. Strengthening capacity of Regional offices by re-deploying Chief Directors, creation of additional Chief Director posts, and additional resources for monitoring and evaluation. Increase the rate of enforcement and compliance inspections and remedial actions. 8

9. Thank you 9