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National Assembly approves Appropriation Bill
National Assembly approves Appropriation Bill

The Citizen

time6 days ago

  • Business
  • The Citizen

National Assembly approves Appropriation Bill

The Appropriation Bill goes through three main stages in the National Assembly. President Cyril Ramaphosa delivers the State of the Nation Address (Sona) at Cape Town City Hall on 6 February 2025. Picture: Gallo Images/Jeffrey Abrahams The National Assembly has accepted the Appropriation Bill on the first reading, moving a step closer toward concluding a tumultuous budget process – although it is not yet fully resolved. MPs convened at the Cape Town International Convention Centre (CTICC) on Wednesday to debate and vote on the Appropriation Bill. This bill, which allocates funding to national government departments and outlines how it will be divided among institutions for the financial year, is the final major legislative step before the R1.2 trillion national budget can be finalised. Stages of Appropriation Bill in the National Assembly The Appropriation Bill goes through three main stages in the National Assembly. In the first reading, MPs debate whether they agree with the overall principles of the bill. If the National Assembly rejects it at this point, the bill is dismissed entirely and does not advance. ALSO READ: Ramaphosa defends budget as critical to government oversight The second stage involves voting on the budgets allocated to each government department and its respective entities. Lastly, if all departmental votes are approved, Parliament then considers the full schedule, which outlines the complete breakdown of funding allocations. Once this schedule is adopted, the bill moves to the second reading – the final vote needed for the National Assembly to formally pass it. Debate on Appropriation Bill Before the first reading debate could begin on Wednesday, the National Assembly adopted the Standing Committee on Appropriations' report on the bill. Kicking off the debate, Mmusi Maimane, chairperson of the Standing Committee on Appropriations, called on the executive and the government of national unity (GNU) to establish clear priorities and reach consensus on the spending plan early. The Build One South Africa (Bosa) leader emphasised that doing so would help avoid the disruptions seen in this year's budget process and ensure a smoother cycle going forward. 'We need to be clear about when we do spending reviews. In this medium term, we must be far more efficient in how we deal with the money that has been allocated to us,' Maimane said. READ MORE: Treasury allocates R750m to offset Pepfar funding withdrawal as Motsoaledi tables health budget Closing the debate, Deputy Finance Minister David Masondo stressed to MPs that passing the bill would authorise government to use the allocated funds to provide public services. 'This R1.2 trillion is not just a number; it represents school meals, hospital beds, social grants and infrastructure projects that will directly impact the lives of many South Africans,' he said. He warned that failure to pass the bill could prevent government from accessing funds by October, thereby stalling new projects and service delivery. After the debate, a manual voting process was held on the first reading. A total of 262 MPs supported the Appropriations Bill, while 90 opposed it. No abstentions were recorded. Watch the plenary session below: Departmental budget votes MPs are also voting on Wednesday on the budgets for each department. At least 201 MPs must be present, with a majority vote for approval. All 42 departmental votes must be approved for the Appropriation Bill to pass. The process remains on shaky ground, especially with the DA previously pledging not to support the Department of Human Settlements' allocation, due to Minister Thembi Simelane's alleged involvement in the VBS scandal. READ MORE: 'Police are the chief criminal syndicate': Saps R120bn budget criticised by MPs The party has called for her dismissal by President Cyril Ramaphosa. Whether the DA, which holds 87 seats, will maintain that stance on Simelane is unclear. The party's support for the overall bill on Wednesday followed the recent dismissal of former Higher Education Minister Nobuhle Nkabane. The departmental votes continue at the CTICC. What happens if Appropriation Bill is not passed? If the National Assembly fails to pass the Appropriation Bill, it must be returned to the Standing Committee on Appropriations for reconsideration. This would have significant consequences. Under the Public Finance Management Act (PFMA), departments are only allowed to spend up to 45% of the previous year's allocation during the first four months of the new financial year – ending in July. READ MORE: Parliament allocates R71m for medical aid for former MPs After that, they may spend only 10% per month. However, without a new budget, no new programmes or adjustments to existing allocations can proceed, potentially delaying funding for public services. Next steps if passed If passed by the National Assembly, the Appropriation Bill proceeds to the National Council of Provinces (NCOP) for concurrence. The NCOP must adopt the bill by 31 July in accordance with the Money Bills Amendment Procedure and Related Matters Act, which requires Parliament to pass, amend, or reject the legislation within four months of the start of the financial year. Once approved by the NCOP, the budget process is formally concluded, and the implementation of the national budget can begin. Post-approval oversight Once the bill is fully enacted, government departments will begin receiving funds and executing spending plans. Parliamentary oversight will continue during implementation. The Auditor-General will audit expenditure and report findings to Parliament. Parliament is empowered to take corrective action should mismanagement or underspending be detected. NOW READ: DFFE to stretch R9bn budget amid fiscal constraints, minister warns

SA's shrinking mining sector and the policies that brought us here
SA's shrinking mining sector and the policies that brought us here

The Citizen

time09-06-2025

  • Business
  • The Citizen

SA's shrinking mining sector and the policies that brought us here

Mining is now officially in recession after two quarters of declining output. The minister's answer to this is more ministerial control … Mineral Resources and Energy Minister Gwede Mantashe's latest bill 'recycles tired and failed transformation policies'. Mineral Resources and Energy Minister Gwede Mantashe's latest bill 'recycles tired and failed transformation policies'. Picture: Gallo Images/Jeffrey Abrahams After two quarters of declining production, mining is now officially in recession. The once mining-heavy JSE now hosts just 35 mining companies, seven of which have no operations at all in South Africa. In 1987, there were more than 600 listings on the JSE, with mining accounting for more than half of them. This was the engine that powered the industrialisation of SA. Mining houses such as Anglo American and AngloGold Ashanti have fled SA, body and soul. Some such as Lonmin quietly exited, and nearly all have diversified abroad. Glencore is suspending operations at two plants in the Glencore-Merafe Chrome Venture, citing high electricity prices, logistics challenges with Transnet rail and ports, and a downturn in the global ferrochrome market. This comes at a cost of billions of rands in export earnings and highlights the potential difficulties of promoting minerals beneficiation when electricity prices have shot up 700% in the last decade. ALSO READ: Mining fails to deliver jobs to local communities How far have we slipped? South African mining production today is 10% below where it was a decade ago and 20% lower than 20 years ago, notes Izak Odendaal, chief investment strategist at Old Mutual Multi-Managers. This is reflected in the chart below. Source: LSEG Datastream, Old Mutual Multi-Managers Part of this can be pinned on declining commodity prices, but the longer-term trend points to something deeper and more troubling: a regulatory regime hostile to investment. 'The truth is that SA mining is uninvestible,' says Paul Miller, CEO of AramanthCX. 'Since the early 2000s we've had multiple mining charters, and people comb over the details, but that's irrelevant. 'The trajectory remains the same – mining companies will be called on to give up more and more of their financial returns over time – and that will not change. This is what makes it uninvestible.' Mineral Resources and Energy Minister Gwede Mantashe has said he wants SA to regain the 5% global exploration budgets we enjoyed in the early 2000s, but perhaps he should aim first for only 1%. In 2024, SA claimed just 0.8% of global exploration spending, compared to Australia's 15.9% and Canada's 19.8%. Any recovery in mining investment starts with exploration, which typically has a 10- to 15-year lead time before generating cash. Exploration is high risk, with no guarantee of a return. Exploration companies have complained that besides the business risks, they are also required to take BEE partners on board. This graph from S&P Capital IQ shows the steady de-ranking of SA mining exploration in global terms: Source: S&P Capital IQ ALSO READ: SA opened 159 new mines in five years, creating over 15 000 jobs Think bigger, think billions The Industrial Development Corporation and the Department of Mineral Resources and Energy announced a R400 million fund to support exploration by junior miners, but what's needed is more than R10 billion if we are to get back to 5% of global exploration. We're nowhere near that. Mantashe's latest attempt to 'fix' the mining sector is the Draft Mineral Resources Development Bill, which was released last month for public comment, with the purported aim of enhancing regulatory certainty, streamlining processes, and boosting investor confidence. It has been met with predictable outrage and will likely achieve none of these goals. It recycles tired and failed transformation policies. For a start, it reintroduces the requirement for ministerial consent for any change to the shareholding of mining companies, including foreign-listed ones. It's hard to imagine any foreign mining company putting SA on its priority list when the minister gets to decide on shareholder changes. Section 11 of the Mineral and Petroleum Resources Development Act (MPRDA) deals with changes in ownership. ALSO READ: Mining production disappoints again Ministerial approval looms large The vague language of the draft bill provides little clarity on whether an Australian miner with SA interests is required to seek ministerial approval for changes in the group shareholding, which in turn would impact the ownership of the local subsidiary. This was decided in favour of the minister in the Supreme Court of Appeal in 2023 when it was ruled that any change in control, direct or indirect, requires ministerial consent. 'The change, if implemented, would prevent pledges of shares, the introduction of preference shares and any change in shareholding at all for a non-listed mining company without ministerial consent,' says Bowmans Attorneys. Perhaps the biggest objection to the draft bill is that it mandates BEE for prospecting and mining rights, when all prior indications were that this would be omitted. 'The draft bill is not altogether optimal. We did have engagements with the department, but we cannot see where our inputs were taken into consideration,' says Mzila Mthenjane, CEO of Minerals Council SA. The draft bill then introduces a new beneficiation section to the MPRDA, requiring every producer to make minerals or mineral products available for local beneficiation. This means mining companies must offer a portion of their output for processing in SA rather than exporting raw minerals. The bill grants the minister expanded rights to set terms and conditions for beneficiation, including oversight of beneficiation processes and approval of beneficiation plans. Given the department's notorious bureaucratic somnolence, it's hard to imagine this setting the mining sector alight with enthusiasm. Beneficiation is energy-intensive, and little thought seems to have been given to the realities of forcing miners to add value locally when electricity prices have screamed up 700% in the last decade. No draft regulations were released with the bill, so the industry can't assess the full impact. Another change introduced in the bill allows the minister to designate certain areas for small-scale and artisanal mining by blacks. This would have to be approached carefully, says Bowmans, to avoid fronting and irregular practices at both the departmental and community level. ALSO READ: 'If they don't give us money, let's not give them minerals': Mantashe hits back at Trump funding cut Industry trying to stay afloat Is there a way to turn this ship around? Odendaal says there is. Increased mining production and exports require the following, among other things: Capital for exploration, feasibility, and construction; A conducive and predictable regulatory regime; A working public repository of mining rights and geological information (cadastre) – this is finally and belatedly being implemented; Stable labour relations; Safety and security; Community buy-in – unlike other businesses, mines cannot choose where to operate; and Water, energy, and logistics infrastructure – letting mining companies run their own trains would be a good start. Adds Miller: 'A new generation of reforming politicians will have to make the root and branch changes required to fix our mining sector, and it will have to be done on the wreckage of the existing system.' This article was republished from Moneyweb. Read the original here.

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