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Legislative Environment
Samrad designed to clean up South Africa’s minerals application process
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27th May 2011
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The Department of Mineral Resources (DMR) has launched the South African mineral resources administration (Samrad) online application system in an attempt to streamline the application process and to make it transparent.

As of April 18, all applications for prospecting rights, mining permits and mining rights have had to be submitted in electronic format on the department’s website.

This comes three months after the Fraser Institute released its 2011 Survey of Mining Companies, one aspect of which rates the ease of doing business in a specific country, taking into account government regulatory policies. In this category, South Africa ranked 43 out of the 79 jurisdictions that the survey includes in its study.

This shows a slow, but steady, decline from the days when South Africa ranked among the top 20 jurisdictions.
Mineral Resources Minister Susan Shabangu, at the 2011 Mining Indaba, acknowledged concerns about this damaging status and spoke of action being taken by her department.

“Following the various media reports and views proffered by analysts and assorted observers on issues that amounted to negative sentiment regarding the work of the DMR, I instructed various high-ranking officials within the department to look into the matter,” said Shabangu.

One of the major criticisms of the DMR has been the lack of administrative process within the department, which has led to serious pitfalls within the system, such as awards being made to two mining companies for the same tenement, overlaps and rights that could not be registered.

“Even more disturbing is the fact that in seams or mineral complexes with known mineralisation, which should be a hive of exploration activity, there is virtually none,” said Shabangu.

During the Samrad developmental period, the DMR scheduled an audit of all prospecting rights as part of the data clean-up process.

Since Shabangu’s 2011 Indaba address, Samrad has been launched amidst great anticipation from prospective explorers.
Acting deputy director-general of mineral regulation Joel Raphela reports that the industry stands to benefit significantly from the launch of the electronic application system.

“It will make information available about areas applied for, granted and still available for prospecting and mining rights and mining permit applications readily and globally accessible to the general public. It will ensure transparency and information on the processing of applications. And it will ensure efficient processing of applications with the resultant benefit of reduced turn- around times for finalising applications,” says Raphela.

Another benefit of the system, as pointed out by Shabangu, is the speed at which applications are processed.

She reported that it was the intention of the DMR to reduce the turnaround time for mining rights applications from the current 12 months to 6 months, while prospecting rights would be reduced from 6 months to 3 months.

She added that Samrad would provide other corrective measures in the department’s administrative process, striving to achieve more transparency and root out any prospect of corruption in the system.

The Samrad online application system can be accessed by following the DMR website link, Samrad online applications.

Raphela reports that, once applicants have registered and gained access to the system, there are three main features available.

The first is the electronic notice board, where all applications for rights in terms of the Mineral and Petroleum Resources Development Act (MPRDA) are made public.

Secondly, a public viewer enables applicants to browse the locality of the rights applied for, rights granted and available land for any mineral or minerals anywhere in South Africa within a geographical information system.

“The third feature is the application portal. The system will take the applicant through a step-by-step application lodgement process, and allocate a reference number to the company. An acceptance letter is then automatically generated and sent to the applicant as soon as the application has been successfully submitted,” says Raphela.

Officials of the department processing the application will be able to, at the press of a button, establish the environment-sensitivity status of an area applied for before even beginning to process the application. This will obviate the possibility of mining rights being granted for ecologically sensitive areas.

“I must caution that achieving these levels of consistency and uniformity also requires consistency in the format of applications and supporting information to be submitted by applicants,” says Shabangu.

The department has, in line with the applicable regulations, developed guidelines and standard templates for application supporting documentation. These standard guidelines and templates are available on the department’s website, and Shabangu has warned applicants to take note and make the necessary adjustments to the documentation they intend to submit to meet the requirements of the prescribed format.

Security Concerns
One of the major concerns regarding the new application process is the fact that it is accessed through the Internet, which, in the past, has had privacy issues. Last month, Internet hackers hacked into the Sony website where they had access to the account numbers and credit card details of a number of international clients.

However, Raphela is adamant that this will not be the case with Samrad.

“The DMR has developed the system in consultation with and with the involvement of the relevant security agencies, and the depart- ment believes it has built enough security details into the system,” says Raphela.

Room for Improvement
Another feature of the Fraser Institute’s Survey of Mining Companies is the index that measures the ability of a jurisdiction to improve, given the absence of political overregulation and the application of best practice principles on the part of com- panies. In this index, South Africa ranks 11 out of 79, which suggests that the South African mining industry has plenty of room for improvement.

Raphela acknowledges this and describes to Mining Weekly the events that led up to the development of the Samrad.
The DMR imposed a moratorium on new prospecting rights applications on August 31, 2010, the main purpose of which was to conduct a thorough audit of all granted and issued prospecting rights and to verify all prospecting activities for each right through compliance inspections.

Of the 3 507 applications that were received and processed, the department had to determine how many of these prospecting rights had graduated to “impactful mining rights”. It then had to conduct verification of all prospecting rights that had lapsed to ensure whether closure certificates had been issued. This was necessary to clean up the backlog of applications, says Raphela.

The DMR also needed to clean up the National Mining Promotion System (NMPS) to ensure the accuracy and reliability of information on it. It needed to migrate the data from the NMPS to Samrad and align the reduction of the new timeframes for application processing, as agreed with the Mining Industry Growth and Development Task Team. And, finally, it needed to align these processes with the Mining Charter review process.

Edited by: Martin Zhuwakinyu


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DMR officials Joel Raphela, Andre Cronje and Siyabonga Vezi commenting on Samrad. Cameraperson: Nichoals Boyd. Editing: Darlene Creamer.
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EDUCATED DRILLING Through a segment on Samrad, companies have access to detailed geological information about the areas where potential rights are located

EDUCATED DRILLING Through a segment on Samrad, companies have access to detailed geological information about the areas where potential rights are located
MINE OF INFO Samrad has 276 layers of information on South Africa’s 52 commodities, which the global Citibank values at R18-trillion ($2,3-trillion), the highest value in the world
Picture by: Duane Daws
MINE OF INFO Samrad has 276 layers of information on South Africa’s 52 commodities, which the global Citibank values at R18-trillion ($2,3-trillion), the highest value in the world
Joel Raphela Industry to benefit significantly from electronic system

Joel Raphela Industry to benefit significantly from electronic system
Andre Cronje Samrad shows rights, open land at

Andre Cronje Samrad shows rights, open land at
Siyabonga Vezi Log on, find out about South Africa’s mineral wealth

Siyabonga Vezi Log on, find out about South Africa’s mineral wealth
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