Cape Town - Opposition parties have challenged the Department of Mineral Resources and Energy to improve security following the damage to infrastructure during the unrest in KwaZulu-Natal and Gauteng last month.
The portfolio committee on Tuesday received a briefing by the department on the impact the looting had on the sector.
The shutting down of South Africa’s fuel refinery resulted in the country losing 24 000 tons of processing of crude oil a day. The committee heard that crude losses would impact on the 2.7 million litres of petrol a year that Sapref produced.
Sapref Refinery (jointly owned by Shell and BP) was closed for the safety of the infrastructure and employees could not travel to work.
Opposition parties questioned what measures the department has in place to ensure security of this sector. To this, deputy-director general of Petroleum and Petroleum Products Regulation, Tseliso Maqubela, admitted that the security of infrastructure is a challenge.
“I don’t want to underplay this matter, particularly the pipeline and rail infrastructure. We are confident that the security facilities at refineries and depots are adequate. What became a challenge was the safety of workers could not be guaranteed and then a decision was taken to, instead of risk workers being injured, let’s rather shutdown."
According to Maqubela, three sites were burnt down in KZN while there was one arson attack at a site in Gauteng.
He said over and above the damages to property and subdued investor confidence, it has been estimated by notable banks that the riots would shave off 0.8% of economic growth in 2021, with the third quarter seeing an estimated decline of 3%.
Maqubela said that the production of minerals was not necessarily impacted, however the disruptions would have affected sales, more particularly those minerals exported via Richards Bay and Durban ports.
“Furthermore, the mining industry operators declared force majeure in the KZN region as a results logistical and export constraints. A few other depots were shut down in KZN and Gauteng as a precautionary measure until the country is stable. In Gauteng, fuel supply came under strain even though no shortages were experienced in the province,” he said.
The department said even though the unrest in KwaZulu-Natal and Gauteng has stabilised, Covid-19 restrictions have resulted in full services not being back to normal as some service stations are yet to be rebuilt.
Minister Gwede Mantashe noted that fuel supply in KZN was temporarily disrupted, while supply in Gauteng came under strain during the violent looting. He said there were no disruptions in the mining sector, although there were threats of disrupting the supply of essential input.
“When the riots broke out, there was an impact on the movement of the workers to and from Sapref, which constituted 35% of the South African refinery capacity.
“The supply and logistic disruption of highways to and from posts on Durban posed a threat to the mining industry as it was difficult to transport explosive materials used in the mines,” said Maqubela.
He said the impact of the disruption on the mineral sales would be clear when the department reported its July statistics, and added that jobs had been affected in the sector. He said he believed, however, that those jobs would be recovered once the fuel stations had recovered.
“Refurbishments costs to companies and insurance still have to be accurately calculated,” he said.
Cash in-transit operations were suspended to and from the retail service stations, said Maqubela.
“The estimated cost of the damage to the retail service station is R281 127 million and about 1 579 jobs were impacted temporarily.”
The overall damage the looting had on the country was estimated to be around R50 billion.
Political Bureau