Minister Gwede Mantashe: Mineral and Petroleum Resources Dept Budget Vote 2025/26

House Chairperson,
Speaker of the National Assembly, Honourable Thoko Didiza
Chairperson of the Portfolio Committee on Mineral and Petroleum Resources, Honourable Mikateko Mahlaule
Deputy Minister of Mineral and Petroleum Resources, Ms Phumzile Mgcina Honourable Members
Distinguished Guests Members of the Media

We are mandated to promote and advance the mineral and petroleum sectors so that they can make a meaningful contribution to South Africa’s drive for inclusive economic growth and job creation, reducing poverty and tackle the high cost of living.

The reconfiguration of the department provides us with an opportunity to streamline and create a regulatory environment that will grow both these sectors with greater focus on investment promotion and harmonisation of legislation.

In keeping with the National Development Plan (NDP) Vision 2030, the Medium-Term Development Plan (MTDP) and the government’s objectives of re-industrialisation, the Department of Mineral and Petroleum Resources (DMPR) has anchored its strategy around five priority areas, namely:

• To promote investment in the mining and petroleum sectors by creating an enabling policy and regulatory environment. To support this priority, resources will be provided for the review of policies and legislative instruments, streamline efforts and interventions to support value addition close to the point of production.
• To accelerate the transformation in the mining and petroleum sectors by driving policies that will enable greater participation of historically disadvantaged individuals in these sectors.
• To ensure environmental sustainability by enhancing environmental compliance and enforcement, and rehabilitating derelict and ownerless mines.
• To promote regional integration and cooperation in the mining and petroleum sectors by leveraging on the bilateral and multilateral platforms
• To strengthen institutional capacity and governance by enhancing organisational efficiencies including utilisation of technology to modernise and bring about responsiveness

Honourable members, it is, therefore, an honour to be tabling the Budget Vote 34 of the reconfigured DMPR.

Although constrained due to prevailing economic hardships, this budget is geared towards enabling the department to efficiently regulate the mining and petroleum sectors for transformation, inclusive growth, development and ensure that all South Africans derive sustainable benefit from the country's natural wealth.

Honourable members, we are tabling this budget amidst a challenging landscape marked by escalating trade tensions and rapidly evolving geopolitical relationships. The political and economic consequences of these tensions and conflicts continue to have a negative impact on the world economy, with the developing nations, such as ours, being the hardest hit.

Currently, apart from gold, prices of minerals that dominate South Africa’s mining export basket remain depressed. Whereas minerals such as coal, platinum group metals (PGMs), manganese, and chrome have been excluded from the tariffs imposed by the government of the United States of America, the inclusion of diamonds and iron ore in the 30% reciprocal tariffs on imports from South Africa threatens our export earnings and has the potential to damage the global economic growth.

Despite the challenging global environment, mining gross value added rebounded by 0.3% in 2024, from a 0.5% decline in 2023. Effectively, in rand terms, 2024 saw the mining sector contributing R451 billion to the country’s Gross Domestic Product (GDP), thus sustaining the 6% total contribution to the GDP.

In the same period, the mining industry’s export earnings totalled R674 billion, comprised of R586.4 billion from primary minerals and R87.5 billion from processed minerals, representing a decrease of 0.6% from R678 billion in 2023.

In addition, the mining sector employed 484 837 mineworkers in 2024, marking a significant decrease of 0.9% from the 489 022 of the previous year. It is worth noting that most of the job losses were in the PGM sector in which profitability has been weighed down by low prices. This is the reality that we are battling with. Government reforms including stabilising electricity supply and the gradual improvement of the ports and rail system, will help improve the investment climate in the mining sector.

For its part, the department continues to review and strengthen the mining and petroleum regulatory framework to improve the business environment and, in so doing, enable new and greater investments in these sectors. I am, therefore, pleased to report to you that since our last tabling of the budget last year, the department has:

• Finalised and published for public comment the draft Mineral Resources Development Bill (MPRDB). The Bill, which seeks to review and strengthen the areas of the Act that have been identified as ambiguous and those that have been challenged legally, is currently undergoing comprehensive consultations with stakeholders before processing it to Parliament.
• Reviewed the Petroleum Products Act (PPA) to address the challenges raised by stakeholders such as non-compliance tools, transformation of the industry, clarifications of offences, as well as criminalisation of certain acts. Having gazetted the draft Petroleum Products Bill in October 2024, the department has consolidated the stakeholder inputs. We intend to submit the Bill to Cabinet for approval ahead of tabling in Parliament before the end of the financial year.
• The signing into law of the Upstream Petroleum Resources Development Act (UPRDA) by the President in October last year, has not only created legislation that is investor-friendly for the oil and gas sector, but has also ensured that there is a dedicated regulatory regime for the sector given its potential for economic contribution and job creation. The department is finalising the regulations with an intention to complete the process by the end of September 2025.
• The Mine Health and Safety Amendment Bill (MHSA Bill) has been tabled to parliament. Your urgent consideration and adoption of the Bill will not only support the strides made by the industry in improving the health and safety at our mines but will also ensure stability and empower the industry with the necessary practices to attain the goal of Zero Harm.

Honourable members, the sustainability of South Africa’s mining industry depends on a strong pipeline of new mineral discoveries, and the Junior Mining Exploration Fund is a targeted intervention in this regard. Established through a R200 million allocation from the National Treasury, matched by the Industrial Development Corporation (IDC), this fund is poised to unlock new mineral discoveries and drive transformation. The first funding call has already resulted in the signing of legal contracts with black-owned junior miners.

As the country navigates the natural decline of legacy commodities like gold, this fund will enable the discovery of new minerals that are essential for a range of industries, from advanced manufacturing to technology and infrastructure development.

Expanding this fund is not just an investment in new mining frontiers but a commitment to ensuring that our mineral wealth contributes to a more inclusive and transformed industry.

Through the implementation of its Integrated and Multi-Disciplinary Mapping Programme, the Council for Geoscience (CGS) expanded the onshore mapping coverage of South Africa at a scale that is commensurate with the needs of the exploration community from below 5% in 2019 to over 17% during 2024. This work provides the fundamental basis to outline the mineral potential and geological systems at an enhanced scale, allowing greater clarity to focus exploration initiatives. For the 2025/26 financial year, the CGS will continue with the implementation of this backbone programme, both onshore and offshore, to make available key pre-competitive geological data, information and knowledge for considered investment in minerals exploration.

To further catalyse exploration in South Africa, the sourcing of support to expand exploration initiatives in South Africa remains a key focus of the CGS. Through this prism, the CGS continues to engage with funding institutions to secure the additional requisite financial resources to support junior exploration in South Africa to unprecedented levels.

Mintek has completed the study on the state of mining in South Africa and the development of the country’s Critical Minerals and Metals Strategy for implementation. Having produced individual commodity reports on 21 minerals, the critical minerals strategy shows that minerals such as platinum, manganese, iron ore, coal, and chrome ore are poised to play a critical role in the South African mining industry and the economy for the foreseeable future.

In contrast to the sceptic view that the South African mining industry is a sunset industry, with the comprehensive and up-to-date insights into key developments within global commodity markets, mineral production trends in South Africa, and the mining sector’s contribution to the economy, we are now more convinced than ever that the South African mining industry is a sunrise industry. This mining frontier is filled with exciting opportunities for investors and the economy.

Despite the mineral endowment that our nation is blessed with, the South African mining industry continues to prioritise the pit-to-port approach to mining, in contrast to local beneficiation. In so doing, the industry continues to export the benefits and jobs that ought to accrue to the nation. Our engagements with the manganese and chrome producers are beginning to take shape with concrete proposals being considered to promote the creation of value-added products close to the point of production including ensuring consistent, reliable, efficient, and affordable electricity supply; implementation of an export tax; and the introduction of quotas to restrict the amount of raw minerals that can be exported from our country.

Given the challenges faced by the ferroalloy sector that have resulted in 30 out of the 59 chrome furnaces in our country being either shut down or placed under care and maintenance, a Ministerial Task Team is developing a plan to revive our smelting sector and ensure its long-term sustainability. The plan will focus on several areas, including the proposals put forward in our engagements with the manganese and chrome producers.

House Chairperson, a transparent mining licensing system is an enabler for a sunrise industry. Since the appointment of PMG Consortium as the service provider for the design and configuration of the system, critical milestones in modernising and enhancing the efficiency of our mineral resource management have been achieved.

The project has progressed through a structured sequence of phases including, inter alia, initiation, design and configuration, as well as legacy data management. Some of the key achievements to date include the successful mapping of the requirements onto the new systems, the establishment of the system’s architecture, strengthened cybersecurity protocols, and introduction of a more advanced “Grid” solution that minimises potential overlap of mining area by applicants.

This progress was showcased during this year’s edition of the Mining Indaba as well as the recent Junior Indaba. Interactions with the industry during these sessions confirmed that the system is expected to meet the expectations of investors.

Honourable members, the integrity of a transparent mining licensing system is a function of the underlying data. It is important that as we migrate data from the old system to the new system, we ensure that the new system reflects the reality on the ground in so far as ownership of rights is concerned. This is a delicate process that requires precision and quality assurance, and it is taking longer than we had anticipated. Consequently, this has resulted in a need to reschedule the phased rollout of the system in the Western Cape by a further three months.

It is expected that the overall project timeline will not be significantly impacted as the experience from the Western Cape process will be applied in other provinces.

I can, however, assure you, honourable members and all social partners in the industry, that we remain fully committed to modernising and improving the efficiency of our mineral resource management. To accelerate progress, we have allocated additional resources and human capital to key project areas including, data migration, testing, training, and deployment. Additionally, we have enlisted the services of the Council for Scientific and Industrial Research (CSIR).

In the interim, the department continues to process applications with the necessary efficiency. I can report to you that during the previous financial year, we have processed and finalised 2 596 applications, which includes mining and prospecting rights, as well as mining permits.

We are confident that the new mining licensing system will significantly improve service delivery, enhance transparency, and strengthen sustainable resource governance. We appreciate the patience and understanding of the industry and all stakeholders during this transition.

House Chairperson, despite the considerable interest in South Africa’s petroleum sector, with oil and gas majors making valuable investments in our country, the upstream petroleum industry has over the years faced complex challenges mainly from the anti-oil and gas Non-Governmental Organisations (NGOs).

These challenges have not only led to several petroleum exploration projects being delayed due to the frivolous lodging of appeals against environmental authorisation but have also deprived South Africans of the benefits that ought to rightfully accrue to them.

Notwithstanding these challenges, oil and gas companies have demonstrated their eagerness to stay in South Africa. The recent oil discoveries in Namibia’s Orange Basin have also led to considerable interest by oil and gas companies since it is believed that the Namibian discoveries extend southwards into South Africa.

The discovery of gas and condensate from Block 11B/12B in the South Outeniqua Basin has also proven that South Africa`s under-explored deep waters have significant potential for oil and gas. This has signalled a need to accelerate exploration efforts. Despite TotalEnergies leaving the block, there remains a good opportunity for other players to partner with the remaining operator and develop the block.

As part of our concerted efforts aimed at lifting the moratorium on oil and gas exploration in South Africa’s Karoo Basin, the government has concluded 85% of phase 1 of the Shale Gas Project. This project is aimed at understanding the petroleum resource potential and carrying out an environmental baseline in the area. Phase 2 of the project has officially commenced with the intention to acquire new high-resolution geophysical data using 2D seismic, airborne magnetic and magneto-telluric methods. At least six districts across the Northern, Eastern and Western Cape provinces will be covered in the research study.

House Chairperson, we are in the throes of starting a new sector that is poised to enable energy independence, industrialisation, and greater employment creation in South Africa. I am pleased to report to you that our concerted efforts that are aimed at getting the biofuels sector off the ground are beginning to take shape. Having gazetted the draft regulations for biofuel prices for public comments in March this year, the department is currently consolidating the stakeholder inputs, and thereafter the regulations will be gazetted for implementation. This is a major step towards setting the South African biofuels sector in motion and thereby setting us on a path to inclusive economic growth, poverty eradication, and reducing the cost of living.

Significant progress has been made with regards to the rationalisation of the Strategic Fuel Fund (SFF), iGas, and PetroSA to establish the South African National Petroleum Company (SANPC). Whereas the SANPC Bill is before parliament, the company has been registered in terms of the Companies Act and has started operating as a subsidiary of the Central Energy Fund (CEF).

There is no doubt that the adoption of the SANPC Bill and the operationalisation of this new entity will be a game-changer for the South African petroleum sector, as well as the African continent. Once it is fully operational, the SANPC is poised to play a catalytic role in supporting the government’s strategic initiatives, including the revitalisation of our refining capacity.

As part of our concerted efforts to achieve energy security, South Africa has taken significant steps to advance its relations through various bilateral agreements. One notable achievement is the forged strategic partnership with Côte d'Ivoire that is aimed at securing a stable supply of petroleum products for South Africa through government-to-government arrangements, anchored by the CEF and PETROCI. Negotiations are underway to finalise commercial terms and regulatory frameworks that are focused on ensuring a reliable flow of jet fuel from Côte d'Ivoire to South Africa.

The African continent presents significant opportunities for revenue generation and economic diplomacy. A prime example of such an opportunity is the Nile Orange Energy Project in South Sudan, which boasts the third-largest oil resource base in Sub-Saharan Africa, with 3.5 billion barrels of oil, following Nigeria and Angola. Through government-to-government engagement, an opportunity emerged for the acquisition of exploration blocks in South Sudan. As a result, the SFF and the South Sudan Ministry of Petroleum negotiated the terms of an Exploration and Production Sharing Agreement (EPSA). The SANPC successfully negotiated to carry 90% shareholding of the oil Block B2, while Nilepet - South Sudan's national oil company - holds 10%, thereby promising significant future revenue for SANPC and the South African government. Equally, PetroSA's continued commercial presence in Ghana highlights our strategic engagement in the continent's energy sector.

Honourable members, let me turn to our finances. The department has been allocated R2.86 billion for the 2025/26 financial year, of which R1.16 billion or 40.55% will be transferred to public entities, municipalities, and other implementing institutions to enable them to fulfil their constitutional mandates. Adding to the operational funding for the entities is an allocation for specific projects, including but not limited to:

• R134.7 million for the rehabilitation of derelict and ownerless mines implemented by Mintek
• R22.4 million for the Mine Rehabilitation Research Project implemented by the Council for Geoscience (CGS)
• R32.3 million allocated to the CGS for the Mine Water Ingress Project
• R46.1 million allocated to the Petroleum Agency South Africa (PASA) for the implementation of the Shale Gas Project

Without further ado, allow me to express my gratitude to the Deputy Minister, Ms Phumzile Mgcina for her support in the execution of our mandate as the Ministry. I also wish to extend our gratitude to the Portfolio Committee on Mineral and Petroleum Resources for their oversight, support and guidance throughout the course of the year.

I also wish to thank the Director-General of the DMPR, Mr Jacob Mbele and the entire DMPR team for their role in the execution of our work as the department. Our appreciation is also extended to our social partners for their ongoing contribution to the development and growth of the mining and petroleum sectors.

Last but not least, I would like to thank my wife, Mrs Nolwandle Mantashe, my family, advisors, and the support staff in the Ministry for their support.

House Chairperson, I present to this house, the Budget Vote 34 for consideration and adoption.

I thank you.

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