CHAMBER OF MINES OF SOUTH AFRICA ORAL SUBMISSIONS TO THE PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM ON THE SPATIAL PLANNING AND LAND USE.

CHAMBER OF MINES OF SOUTH AFRICA

ORAL SUBMISSIONS TO THE PORTFOLIO COMMITTEE

ON RURAL DEVELOPMENT AND LAND REFORM

ON THE SPATIAL PLANNING AND

LAND USE MANAGEMENT BILL[B14-2012]

22 August 2012

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Contents• Introduction• Purpose of submissions• Importance of the mining industry for the

South African economy• Special attributes of minerals and mining• Mining historically is a predominant land

use• Consequential special recognition of

mining in land use legislation• Minerals and Mining in post-1994 South

Africa• Encroachments on mining• The Chamber’s proposed solution• The Chamber’s proposed concepts and

clauses to deal with mineral and mining concepts

• Land Use Planning contrasted with environmental aspects

• Conclusion

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Introduction

• The Chamber thanks the Committee

• The Chamber’s oral submissions are made in conjunction with the Chamber’s written submissions

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Purpose of submissions

• To propose amendments to deal with minerals and mining

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Importance of the Mining Industry for the South African

Economy

The following statistics are relevant to the South African Mining Industry in 2011

• It created 1,353 million jobs (514 000 direct, & 838 000 indirect being industries that use mining products or supply the mining industry)

• A dependency ratio of about 10 to 1 means 13,5 million people were dependent for daily food on the 1,353 million mining jobs

• It accounted for 16,2% of total formal non-agricultural employment in South Africa

(continued on next slide)

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Cont’d

• Every direct mining job creates approximately 2 jobs in other sectors

• It accounts for about 19% of gross domestic product (GDP)

• It is a critical earner of foreign exchange namely more than 50%

• It accounted for 20% of investment (12% out of which is direct investment)

• It attracted significant foreign savings (R1,4 trillion which is 29% of the value of the Johannesburg Stock Exchange)

• It accounted for 17,7% of corporate tax receipts namely R26 billion, plus R5,5 billion in royalties

(continued on next slide)

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Cont’d

• It incurred R437 billion in expenditures of which approximately R389 billion was spent locally and of which only 2,6% in dividends (R12,7 billion)

• R89 billion spent in wages and salaries

• R1,3 billion spent on community development

• R4,1 billion spent on skills development

• R800 million spent on corporate social investment (in addition to social and labour plans and Mining Charter commitments)

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Special attributes of minerals and mining

• Minerals are area-bound

• Minerals occur across boundaries

• Mining is in the national and economic interest of the whole of South Africa

• Mining rights constitute vested rights

• A municipality cannot plan in advance for unknown future mining

• Consultation with municipalities, other State Departments, communities, owners and occupiers already occurs at the time of application for mining rights, approval of the social and labour plan, and approval of the environmental management programme

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Mining historically is a predominant land use

• No use of mining land for non-mining uses (including township establishment) without the permission of the Mining Commissioner: Mining Rights Act, 1967

• The Minister of Minerals and Energy was empowered to order cessation of non-mining uses (including inclusion of land in a town planning scheme): Minerals Act, 1991

• The Courts granted interdicts against non-mining uses (including township establishment) which hindered or prevented prospecting and mining: see the Chamber’s written submissions

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Consequential special recognition of mining in land

use legislation

• No town-planning schemes could be established on proclaimed mining land: The Town-planning and Townships Ordinance, 1986 (Transvaal)

• Continuance of existing uses for 15 years with the possibility of a further 15 years, after promulgation of a town-planning scheme: The Town-planning and Townships Ordinance, 1986 (Transvaal)

• No township establishment could occur without the mineral right holder’s consent: The Town-planning and Townships Ordinance, 1986 (Transvaal) and the Development Facilitation Act, 1995

(continued on next slide)

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Cont’d

• The concept of land development excluded prospecting and mining: The Development Facilitation Act, 1995

• No physical planning permit was required for prospecting or mining, or uses incidental thereto: The Physical Planning Act, 1967 and the Physical Planning Act, 1991

• Exemption of prospecting and mining, and uses incidental thereto, from town-planning schemes: Southern Johannesburg Regional Town-planning Scheme, 1962

• The above concepts merit to be carried forward into the Bill

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Minerals and mining in post-1994 South Africa

• National, provincial and municipal competences rank equally

• Mining is a national competence in terms of the Constitution of the Republic of South Africa, 1996 and the Mineral and Petroleum Resources Development Act, 2002

–State sovereignty and custodianship of mineral resources

–Object of security of tenure for mining operations

–The Minister of Mineral Resources is empowered to grant prospecting and mining rights even over residential areas or land reserved in terms of other laws

–The Minister of Finance is empowered to levy a resource rent in the form of State

Royalties

(continued on next slide)

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Cont’d

–Holders of prospecting and mining rights are entitled to prospect and mine and to exercise ancillary surface use rights

–Surface uses which impede mineral development require the consent of the Minister of Mineral Resources

• As stated in the Bill, the protections against deprivation and expropriation of property (such as prospecting and mining rights) avail in terms of the Constitution of the Republic of South Africa, 1996

• Although mining is a national competence, mining must also comply with municipal and provincial legislation, but there is the potential for:

–Sterilisation of mineral resources

–Landowners to prevent re-zoning for mining purposes

–Detriment to the national interest

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Encroachments on mining

Resultant two-fold encroachment on mining:

• Mineral holder needs to procure zoning of land for mining uses (“the First Encroachment”), and in regard to which:

–previously municipal jurisdiction was limited to urban and peri-urban areas

–now mineral jurisdiction includes even rural areas where most mining occurs

• Land developments by others for non-mining uses prevent mining uses (“the Second Encroachment”), and in regard to which:

–the mineral right holder’s consent was previously required and which would protect existing, known future and even unknown future, mining operations

–now there is no provision for the consent of existing mineral holders let alone in

regard to known or unknown future mining operations where no mineral holder yet exists

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The Chamber’s proposed solution

• The Chamber proposes insertion of suitable provisions in the Bill, relying on ss44(2) and 155(7) of the Constitution of the Republic of South Africa, 1996, to protect:

–existing mining operations

–known future mining operations

–unknown future mining operations

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The Chamber’s proposed concepts and clauses to deal

with mineral and mining aspects

• The Chamber’s proposed concepts include the following.

• To address the First Encroachment (the need to zone land for mining purposes):

–Exclusion of, alternatively recognition and accommodation of, existing, known future, and unknown future, mining operations, and of national policies and national legislation in relation thereto, in:

• development plans (clause 7)

• norms and standards (clause 8)

• support and monitoring (clauses 9 and 10)

• spatial development frameworks (chapter 4)

(continued on next slide)

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Cont’d

• land use schemes (chapter 5)

• alignment of authorisations (clause 30)

(See existing recognition of mining in land use legislation:

Physical Planning Act, 1967, s6(2)(c) Physical Planning Act, 1991, s27(2) Development Facilitation Act, 1995, s1,

definition of land development Southern Johannesburg Region Town-

planning Scheme, 1962, s18(a))

–All the abovementioned aspects should expressly exclude:

• prospecting and exploration operations

• underground mineral operations

–There should be express inclusion of mineral holders as competent applicants for land development (clause 45(1)(c))

(to clarify that mineral holders fall within clause 45(1)(c))

(continued on next slide)

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Cont’d

–The transitional provisions should include provision for existing uses (clause 60)

(see: Town-planning and Townships Ordinance, 1986 (T), s43)

–If mineral operations do require consent, such consent should be the lowest form of “consent”

–Existence of mineralisation not previously taken into account should constitute a site-specific circumstance warranting departure in regard to all the abovementioned aspects.

(see clause 22(2) of the Bill)

• To address the Second Encroachment (land developments by others of non-mining uses which prevent mining uses):

(continued on next slide)

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Cont’d

–Land use schemes need to have the consent of:

• the Minister of Mineral Resources, and

• any holder of a mineral authorisation

(See existing recognition of mining in land use legislation

Town-planning and Townships Ordinance, 1986 (T), s69

Development Facilitation Act, 1995, Reg 21 and annexure B in the Regs)

–Prohibition on land use schemes in respect of land used for mining operations

–Cross-refer to the need for approval of the Minister of Mineral Resources in terms

of s53 (“Use of land surface rights contrary to object of Act”) of the Mineral and Petroleum Resources Development Act, 2002

(continued on next slide)

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Cont’d

–Mineral operations should be expressly recognised as being in the national interest so as to render all land developments subject to referral to the Minister of Rural Development and Land Reform

(clause 52)

• To address mineral and mining aspects generally:

–Express provisions that all relevant functionaries act in consultation with the Minister of Mineral Resources in all the abovementioned aspects

–The Minister of Mineral Resources should be designated or delegated in the Bill as the responsible Minister in regard to all aspects of land development and land use which impact upon mineral operations

(clause 56)

(continued on next slide)

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Cont’d

• Detailed drafting suggestions giving effect to the Chamber’s above proposed concepts appear in the Chamber’s written submissions

• These aspects should be dealt with in the Bill as framework legislation and should not be deferred to regulations, guidelines, or provincial or municipal legislation which will then consequently also need to take them into account

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Land use planning contrasted with environmental aspects

• Land use planning and environmental aspects, fall within different constitutional, legislative, and executive competences

• The Bill should accordingly remain restricted to land use planning matters

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Conclusion

• The Chamber again thanks the Committee

• The Chamber requests the Committee to amend the Bill so as to ensure encouragement of mineral investment in South Africa in the furtherance of the national interest