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Thank you, Mr Mothapo
Greetings to you members of the media and the stakeholders
I wish to start off by reminding all South Africans that just two months ago the National Assembly adopted R2.86 billion under Budget Vote 34 of the Department of Mineral and Petroleum Resources for the 2025/26 financial year, as tabled by Minister Mantashe, recommended by our committee and debated by all parties in a mini-plenary on Wednesday 2 July.
Of the R2.86 billion, R1.16 billion amounting to 40.55% is for transfers and subsidies to the department’s state-owned entities. I am deliberately giving you these figures so that you can appreciate the importance of our oversight work over the department and entities, because as public representatives it is our constitutional duty, among others, to monitor how the department spends taxpayers’ money. For this briefing, I will update you on the committee work on four areas, namely:
- Strengthening of state-owned entities
- Critical minerals
- Illegal mining, and
- Oil and gas development
Strengthening of state-owned entities (SOEs)
Ladies and gentlemen, I have already demonstrated that entities of the department under our portfolio all combined share R1.16 billion in this financial year. These entities play a critical role in the fulfillment of the department’s mandate of policy development and regulation; transformation of the mineral and petroleum sector for inclusive growth; health, safety and environmental protection; resource management and research; as well as economic contribution and job creation.
We are pleased to report that as we stand here today, our portfolio and the country at large has a brand-new state-owned company called the South African National Petroleum Company (SANPC), launched by Minister Mantashe in May this year. SANPC was established because of a Cabinet decision to rationalise state-owned entities, and it came out of a strategic consolidation of PetroSA, iGas and the Strategic Fuel Fund. However, the Central Energy Fund (CEF) Group is the holding company of SANPC. The CEF’s other subsidiary entities are African Exploration Mining and Finance Corporation as well as Petroleum Agency South Africa (PASA).
With that said, one of our entities that requires close attention is Alexkor, which mines diamonds in Alexander Bay in the Northern Cape. The operating model of Alexkor, ladies and gentlemen, is rather complex. It operates on a pull and share joint venture (PSJV) with Richtersveld Mining Company (RMC). Alexkor and Richtersveld Mining Company have 51% and 49% shareholding in this venture respectively and have equal representation in the PSJV board.
For context, the Richtersveld Mining Company (RMC) is a subsidiary of Richtersveld Investment Holdings, which is privately owned by the Richtersveld Community Forum. This CPF is constituted by four villages located within the Richtersveld reserve, namely Kuboes, Sandrift, Lekkersing and Eksteenfontein. In the early 2000, the four villages launched a successful claim of the portion of land where Alexkor has been mining since the 1920s. The state could not afford compensation, and a deed of settlement was agreed upon for the Richtersveld Community Forum to get a 49% shareholding of Alexkor and retain full mining rights on the land. Alexkor then remained with 51% shareholding and full marine mining rights.
Alexkor’s operational challenges are compounded mainly by two factors. Firstly, the deed of settlement directs that decisions of the PSJV board must always be unanimous, and, secondly, mining operations are carried out through contractors. Some of these contractors petitioned the Speaker of the National Assembly Hon Didiza, to investigate wide-ranging allegations, such as corruption and governance lapse within Alexkor ecosystem. The Speaker referred the petition to us and the committee processed it, including a three-day site visit to Alexkor in June this year.
As part of our report to the Speaker, we proposed a joint investigation into Alexkor with the Standing Committee on Public Accounts. The investigation should focus on the root causes of the company’s audit disclaimers over the past five financial years, because it is our contention that addressing these disclaimers could reveal the underlying issues at Alexkor.
Critical minerals
South African is naturally endowed with minerals that are classified as critical for the global energy transition, advanced manufacturing and security of supply. Our competitive advantage in this regard is that we hold 80% of the global reserves of platinum metals, which are critical for various things, such as catalytic converters, hydrogen fuel cells, green hydrogen economy, jewellery and industrial catalysts. Also, we produce about 30% of the global production of manganese, which is critical for steelmaking and lithium-ion batteries. Other critical minerals include chromium, vanadium, rare earth elements, nickel and cobalt, copper as well as zirconium and titanium.
The committee’s role is to ensure that these minerals benefit all South Africans and that they contribute to inclusive economic growth and job creation. The recent geopolitical developments taught us that it is imperative for a sovereign state like South Africa not only to diversify trade relations with a multipolar world, but also to build resilient domestic manufacturing capacity. It is for this reason that the committee is taking keen interest in the country’s critical minerals to pay close attention to the work of the department around policy position, regulation, transformation, resource management and economic distribution. We welcome Minister Mantashe’s call during his address to the mining indaba here in Cape Town in February to encourage investors to invest in the country’s platinum metals.
Illegal mining
The scourge of illegal mining has been a thorn in the flesh of mining communities and government. Recently, there has been a spike in illegal gold mining alongside the Blyde River basin in Mpumalanga, threatening the ecosystem. However, we are noticing the strides made by Operation Vala Umgodi established in December 2022 by President Ramaphosa to fight illegal mining. This operation was established because of the joint recommendations of the portfolio committees on minerals resource and energy, police and home affairs of the sixth Parliament after conducting a joint oversight visit to Limpopo, Gauteng, Mpumalanga, North West and Free State.
While the department, through Mintek, has the responsibility to close and seal off holes leading to the shafts at derelict and ownerless mines, there are always limited resources to adequately carry out this task. There are approximately 6 100 derelict and ownerless mines in South Africa; if Mintek had to attend to them all, the R1,6 billion budget shared by all the department’s entities in this financial year would be a drop in the ocean.
To mitigate the challenge of insufficient resources, the department took advice of the Portfolio Committee on Mineral Resources and Energy of the 6th Parliament to develop a policy position on artisanal and small-scale mining and to introduce the Mineral Resources Development Amendment Bill to criminalise illegal mining. The Artisanal and Small-Scale Mining Policy was promulgated three years ago in March 2022. This policy creates an environment where artisanal miners (those using chisel and hummer) and small-scale miners (those using mechanised equipment at a small scale) can apply for permission to mine to close the space for criminality. The committee’s role in this regard is to hold the department accountable in their work of closing the few holes that they could within the available financial means and implementing the Artisanal and Small-Scale Mining Policy.
Oil and gas development
South Africa remains heavily dependent on imported petroleum products. Of the six refineries built in South Africa, only two are currently operational – Astron Energy and Sasol. This places significant strain on our domestic energy security. In addition, we are faced with a looming “gas cliff” projected for 2028/29, which threatens both our energy supply and our industrial base.
Compounding these challenges is the reality that the development of oil and gas projects in South Africa faces significant opposition from environmental organisations. Many of these projects have been halted or delayed due to legal challenges brought by NGOs. For example, on 13 August 2025, the Western Cape High Court set aside government’s decision to grant environmental authorisation for offshore drilling in Block 5/6/7, along the south-west coast.
Indeed, no offshore project has been spared appeals and objections, with recurring themes raised by NGOs. These often relate to the perceived misalignment between South Africa’s climate change commitments under international treaties and its ongoing exploration for oil and gas resources.
The committee has taken a conscious decision to consult with both environmental organisations and the oil and gas industry. Our objective is clear: to understand the issues from both perspectives, to seek common ground, and ultimately, to work towards solutions that balance energy security, economic development, and environmental sustainability.
Mr Mothapo, let me stop here to allow members of the media to ask clarity-seeking questions.
I thank you.
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