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DISCUSSION ON THE MINERAL RESOURCES 2012 / 13 ANNUAL

PERFORMANCE PLAN

DATE 25 APRIL 2012

Programme 1 Administration - CFO

DEPARTMENT OF MINERAL RESOURCES

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Presentation Outline

1. Budget & spending outlook2. Resource plan per programme3. Expenditure estimate analysis4. Resource plan per economic

classification5. Branch strategic objectives6. Conclusion

PLEASE READ IN CONJUNCTION WITH PGS 3 – 4 and 23 – 28 OF TABLED ANNUAL PERFORMANCE PLAN

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• The total budget for DMR is R1,169 billion for 2012/13 financial year.

• This represents an average growth of 8.8% from 2008/9 and is projected to grow by 5.2 % on average over medium term.

• The funding is shared between the departmental programmes and entities under the control of DMR ministry accounting at 55.8 % and 44.2 % respectively.

• Level of under spending maintained far below 5% - 2011/12 financial year registered 0.92* % (R9,5 million) under spending.

• The remaining funds have already been committed and roll over application will be made to National Treasury

* unaudited

DMR 2012/13 BUDGET & 2011/12 SPENDING OUTLOOK

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DMR RESOURCE PLAN : PER PROGRAMME

Actual Expenditure Projections

2008/09 2009/10 2010/11 2011/12 (unaudited)

2012/13 2013/14 2014/15

Name R’000 R’000 R’000 R’000 R’000 R’000 R’000

Admin 160,020 159,342 226,727 263,579 238,929 254,559 270,744

MHS 112,698 132,029 137,092 135,289 154,472 166,072 175,867

MR155,344 179,543 188,608 184,395 180,098 184,427 194,813

MPP 340,265 382,931 442,270 446,183 595,563 693,995 719,744

Total768,327 853,844 994,697 1,029,446 1,169,062 1,299,053 1,361,168

Change to 2011     61,569 120,346 132,939

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Expenditure estimates analysis

•The overall expenditure is expected to increase in real terms from R1.169 billion in 2012/13 to R1.361 billion in 2014/15 at an average rate of 5.2% per annum. •The increase is attributable to additional funding received over the MTEF in respect of the following:1.Improved conditions of service for the Department and Public Entities – R2.974 million and R11.7 million respectively2.Economic support and competitiveness packages for the Council for Geoscience and Council for Mineral Technology – R350 million

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Expenditure estimates analysis per programme

AdministrationExpenditure is expected to increase from R263.579 million in 2011/12 to R270.744 million in 2014/15 at an average rate of 0.7% over the MTEF period. The budget decreased in 2012/13 due to the decentralisation of administrative budgets to the various branches. The increase in the outer years is attributable to the inflationary adjustments.

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Expenditure estimates analysis per programme

Mine Health and Safety InspectorateExpenditure is expected to increase from R135.289 million in 2011/12 to R175.867 million in 2014/15 at an average rate of 6.8% per annum. The increase relates to the additional allocation for inflation related adjustments.

Mineral Regulation•Over the MTEF expenditure is expected to increase from R184.395 million in 2011/12 to R194.813 million in 2014/15 at an average rate of 1.4%.

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Expenditure estimates analysis per programme

Mineral Policy and Promotion•Expenditure is expected to increase from R446.183 million in 2011/12 to R719.744 million in 2014/15 at an average rate of 12.7% per annum. •The increase is attributable to the new allocation for economic support and competitiveness package for the Council for Geoscience and Council for Mineral Technology – R350 million.

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DMR RESOURCE PLAN: PER ECONOMIC CLASSIFICATION

Actual expenditure Projections

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15

R’000 R’000 R’000 R’000 R’000 R’000 R’000

Current payments 389,577 425,373 532,961 600,298 602,605 661,651 701,796Compensation of employees 231,013 275,084 326,457 364,590 401,892 425,201 450,766

Goods and services 158,564 150,288 206,504 233,288 200,713 236,450 251,030Interest and Rent on Land - - - 2,212 - - -Financial Assets 366 674 50 208 - - -Transfers and subsidies 366,915 395,830 438,120 420,837 560,317 625,873 647,149Capital assets 11,469 31,968 23,566 8,311 6,140 11,529 12,223

Total 768.327 853,844 994,697 1,029,446 1,169,062 1,299,053 1,361,168

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DMR RESOURCE PLAN: PER ECONOMIC CLASSIFICATION

• Due to the under spending on Compensation of Employees in 2011/12, the budget for outer years seem to be more than the inflationary adjustment.

• The decline in Goods and services budget for 2012/13 is attributable to the R15m cut and the reclassification of budget for Rehabilitation of Ownerless and Derelict Mines to subsidies and transfers.

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DMR RESOURCE PLAN: PER ECONOMIC CLASSIFICATION

• The transfers and subsidies budget increased by 33% owing to new funding obtained for Economic support and competitiveness package.

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1. Stakeholder perspectiveProvide reliable and timely information- Number of reports submitted within prescribed

timeframes

Improve service delivery- Number of defined turnaround times adhered to- Customer satisfaction index (1-5 index) on OLA

Educate and empower stakeholders- % reduction in number of complaints - % reduction in non compliance with internal

processes

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Stakeholder perspective cont’dProvide ICT Systems- % reduction in the number of calls logged due

to system response time

Promote transformation policies- % of suppliers’ invoice paid in 30 days

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2. Internal ProcessesImplement Policies, processes and procedures- Number of approved policies implemented- Number of approved processes and procedures

implemented

Improve Turnaround times- Number of processes with improved turnaround times- % improvement in turn around times

Align ICT to business objectives- % implementation of MSP (Master System Plan)- % reduction in licensing costs

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3. Learning and growth

Facilitate management and leadership development - number of managers completed management

courses

Fill funded vacancies- % reduction in vacancies

Attract, develop and retain skills- Improved numbers in terms of identified EE

categories- % reduction in staff turn over rate- Number of Human Resource Development

initiatives implemented

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4. FinancialMaximise utilisation of resources– % reduction in the number of branch assets disposed

prior to the end of life span

Align budget to strategy- % changes made to the original allocated budget

Manage costs effectively- % variance on allocated budget- % reduction in irregular expenditure cases

Promote Corporate Governance- % of fully implemented agreed upon management action

plans (Internal Audit)- % of fully implemented agreed upon management action

plans (External Audit)- % adherence to compliance framework- % implementation of risk management plans

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THANK YOU

QUESTIONS

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