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Midterm budget: Money put aside to revamp mining sector

Lisa Steyn

In response to developments in mining, the medium-term budget policy sets out imperatives to modernise the industry and amend labour relations.

In response to developments in mining, the medium-term budget policy sets out imperatives to modernise the industry and amend labour relations. (AFP)

"We have witnessed a crisis of labour relations in the mining sector, with tragic consequences in Marikana," Finance Minister Pravin Gordhan said in his medium-term budget speech on Thursday.

"Labour needs the skills to function in the global economy. Communities need to overcome barriers to social cohesion. And the state must improve its ability to promote inclusive development in a highly unequal society."

Strike activity in mining and other sectors, as well as other pressing issues, reflect a series of "binding constraints and unsustainable imbalances that hold back investment and job creation," the statement said.

It identified several areas government would target for progress. These include re-establishing orderly labour relations, improving living conditions for miners and upgrading informal settlements.

Departments have prioritised spending away from programmes that are not meeting performance requirements or that are not closely aligned to departmental mandates. Proposed adjustments to provincial conditional grants include funds added to the human settlements development grant for upgrading informal settlements.

This upgrading is prioritised in several areas, including mining communities around Rustenburg and in the municipalities of Lephalale, eMalahleni, Govan Mbeki and Steve Tshwete.

Rustenburg, where Marikana is located, is the fastest growing city on the continent and poor service delivery and high unemployment in mining areas have manifested themselves in poor living conditions and disgruntled communities.

"We will work with business and labour to create decent living conditions in mining communities," Gordhan said.

Money is also being put aside for changes to labour legislation. Additional allocations will be made in the 2013 budget to the department of labour's public employment services and the Council for Conciliation, Mediation and Arbitration in preparation for amended labour legislation, the budget statement said.

Minerals department sparkles
Gordhan said the recent turmoil in the mining sector could affect the mineral resources department's performance but, as of mid-year, the budget reflected a department well on its way to meet its yearly targets.

The number of occupational health and safety inspections and mine audits conducted for the first six months of the financial year is in line with the number of inspections and audits planned – almost 4 400 out of 8 400 completed.

Ninety-nine out of 180 mining charter inspections were achieved. "The number is higher than expected due to a need to verify mining companies' compliance in respect of social labour plans projects implementation," the department said in its budget vote.

Meanwhile the number of rights and permits issued to entities that historically disadvantaged South Africans control is 47 against the mid-year target of 50.

More than half of the targeted number of small, medium and micro enterprises – 47 out of 67 – have been supported through monitoring and evaluation, organised training and strategic assistance, and site visits to the projects.

However, the department has fallen short on some targets.

Only two out of 12 ownerless and derelict mines have been rehabilitated. This was due to a shortage of staff, the department said. "However, two critical positions in this area are now funded, increasing the likelihood that the annual targets will be met."

Of the 1 800 environmental inspections to be completed in the financial year, 775 have been done.

Extra money allocated to the department includes support for the beneficiation strategy and regulatory obligations associated with shale gas exploration.

 

See the rest of the M&G's medium-term policy statement coverage:

Pravin Gordhan mum on Zuma's Nkandla upgrades
Finance Minister Pravin Gordhan remains guarded about public works's decision to use state funds for upgrades to President Zuma's Nkandla homestead.

Government debt to rise as tax revenues wobble
Pravin Gordhan has offered some optimism for SA's economic outlook, despite his mid-term budget signalling plans for a rise in government debt.

Midterm budget: Government failing to create jobs
The midterm budget policy statement has revealed that the government is failing at creating jobs, outside of the expanded public works programme.

Development cash linked to delivery
The government wants more bang for its buck when it comes to provincial and local government infrastructure roll-out.

Midterm budget: Strikes cost economy dearly
The treasury says unrest has had a negative impact on growth, adding tax revenue will be lower as wildcat strikes are estimated to have cost R10bn.

Fighting talk from Pravin Gordhan
Finance Minister Pravin Gordhan tightened his belt, chided the country's critics and delivered a no-nonsense medium-term budget policy statement.


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