What have been the Ministry’s achievements over the past year and what is on its agenda for 2021 – 2022?
Following the outbreak of the Coronavirus in 2019, and the subsequent nationwide lockdown in March 2020, South Africa sought to save lives and protect livelihoods. Several interventions to revive the economy were developed through the economic reconstruction and recovery plan. In the mining and energy portfolio, our interventions ranged from allowing collieries and refineries to remain operational throughout the nationwide lockdown to ensure continued and uninterrupted supply of energy to society.
Accordingly, outcomes of these interventions manifested in the Q3 GDP readings when our economy registered a recovery of 66.1%. Mining and quarrying registered a growth rate of 288% contributing 11.8% point to the overall GDP. In March 2021, mining registered a 21.3% year on year growth, following a 0.8% year on year growth in February 2021 performance. This served as a confirmation that our interventions are yielding positive results in the economic reconstruction and recovery journey.
South Africa has suffered due to the lack of exploration, primarily greenfield. What is the current state of exploration in the country and how is it being promoted?
The Department has commenced with the procurement process of a new modern system that seeks to simplify and improve efficiency. With this system, the Department seeks to ensure provision of reliable and precise information on the location of exploration and mining rights. We believe this will reduce the turnaround time in the process of granting exploration and mining rights. The fundamental objective of this system is to attract investment in the mining sector and to grow the economy.
We believe mining without exploration is unsustainable. Hence, we are working in earnest to ensure the finalization of the country’s exploration strategy to increase our share of the global expenditure in the next 3 to 5 years. We have through the Council for Geoscience (CGS) rapidly increased mapping coverage from below 5% to almost 9% to date, with particular focus on areas with the greatest potential for recovery of world class minerals. We welcome the ongoing participation of our social partners and in particular the Minerals Council South Africa in the development of this strategy.
To what extent is the move to renewables risking the future of coal mining in South Africa?
The revival of and growth of the mining sector cannot be possible without a stable and secure energy supply. It is for this reasons that we have made it our preoccupation to drive a robust energy security program. Our interventions in this regard are informed by the country’s Integrated Resource Plan (IRP) 2019, which incorporates all sources of energy as part of the national energy mix. This includes technologies such as solar, photovoltaic, coal, gas, and battery storage.
We remain committed to rapidly expanding our energy generation capacity in line with the Economic Reconstruction and Recovery Plan. To achieve this, we are implementing multiple measures that will fundamentally change the trajectory of energy generation in our country. For example, we initiated the procurement of the Risk Mitigation Independent Power Producer projects that can be deliver a total of 1,995 MW of power into our electricity grid within 12 to 18 months approval. 11 preferred bidders have been announced and are expected to reach financial closure by the end of September 2021. Another initiative is the amendment of Schedule 2 of the Electricity Regulation Act to increase the regulation licensing threshold for embedded generation from 1 MW to 100 MW.
We also successfully opened Bid Window 5 of the Renewable Energy Independent Power Producer Procurement Program to procure 2,600 MW of new energy generation capacity from wind and solar energy technologies.
In addition, the Electricity Regulations on new generation capacity were revised to enable municipalities in good financial standing to develop their own power generation projects or buy power from Independent Power Producers. The necessary requirements have been clarified in this regard.
We endeavour to create an enabling environment through investor friendly legislation. In this regard, we finalized the amendment of the Gas Amendment Bill to unlock investment into the gas sector and facilitate the development of gas infrastructure; amended the blending requirements of biofuels and to expand the definition to include second and third generation fuels; finalised amendment of the Clean Fuels Regulations to ensure a reduction of the sulphur content in standard grade diesel from 50 to 10 parts per million; gazetted the LPG Strategy which seeks to address a suite of challenges prohibiting access and affordability of this energy source; we are also working on amending the Mine Health and Safety Act to address challenges relating to the health and safety of mineworkers. Other facilitators include the approve of the Upstream Petroleum Bill and the National Nuclear Regulator Amendment Bill by Cabinet.