Ownerless and derelict mines rehabilitation: Department & Chamber of Mines briefings

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Mineral Resources and Energy

13 May 2010
Chairperson: Mr F Gona (ANC)
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Meeting Summary

The Department of Mineral Resources briefed the Committee on measures that had been taken to address the problem of derelict and ownerless mines, as highlighted in a report by the Auditor-General. The presentation outlined the context in which these mines had become abandoned without rehabilitation, and confirmed that the state of these mines had a negative effect on the environment. The provisions of the Mineral and Petroleum Resources Development Act were explained, as well as the fact that the Act did not apply to some of the problem mines because the Act was not in existence at the time of the licensing, although the environmental provisions of the Act could apply. The Department outlined the statistical data that had been collected on these mines. The magnitude of the problem was reiterated throughout the presentation, and the constraints that the Department faced, mostly financial, were presented to the Committee.

Members asked questions pertaining to the accountability of previous owners, and their responsibility to assist in rehabilitation efforts. The nature of the constraints was also questioned, as was the role of the private sector in solving the problems. Members were concerned that very little seemed to have been done with regard to rehabilitating derelict and ownerless mines, and requested that the Department re-engage the Committee on constructive progress as soon as possible.

A delegation from the Chamber of Mines presented the mining industry’s perspective of the problem of derelict and ownerless mines. The presentation summarised the context in which the mining industry had developed, and reiterated the Department’s assertion that this problem had been unaddressed for over one hundred years. The Chamber of Mines distinguished between derelict and ownerless mines, and legacy sites, and also gave examples of how the private sector was assisting in rehabilitating such sites. The environmental sustainability of mining, according to the private sector, would be the key to its longevity.

Members asked about cooperation between the Department of Mineral Resources and the Chamber of Mines, and also engaged the Chamber of Mines on issues relating to the issuing of mining licenses.

Meeting report

Derelict and ownerless mines: Rehabilitation issues
Department of Mineral Resources (DMR) briefing
Mr Mosa Mabuza, Acting Deputy Director General: Policy and Promotion, Department of Mineral Resources, said that it was imperative to constantly create the context within which the problem of derelict and ownerless mines existed. Without this context, it would be impossible to understand the challenges that the Department of Mineral Resources (DMR) faced.

Mining had always been the backbone of the South African economy, and it was important to engage the mining sector on issues pertaining to the environment in order to ensure its continued positive productivity. Since the start of mining in South Africa, there had been very little State involvement and this had meant that reference could not be made to any database of ownership when addressing derelict and ownerless mines. Additionally, there had been no consistence in legislation pre-unification in 1961, or even pre-1991. Only after the Mining and Environmental Summit in Rio de Janeiro in 1991 did the environment become an important issue for the mining sector. At this time, however, South African affairs were being dominated by the transition to democracy. All of these factors meant that when the new government took office in 1994, it had inherited a sector that had not developed a strategic approach to environmental sustainability.

The first stringent piece of environmental legislation, the Minerals Act, No 50 of 1991, marked a paradigm shift in environmental affairs. This concentrated on asbestos mining, and formed the basis for the Mineral and Petroleum Resources Development Act (MPRDA) that came into effect in 2002. The MPRDA introduced, for the first time in over one hundred years of mining, a sustainable development approach to mining.

The DMR programme to address derelict and ownerless mines began in 2000, with the initiation of a research programme into these mines. DMR was immediately faced with constraints, which included human resource and funding problems. A 2005 baseline estimate of required expenditure to address all the issues pertaining to derelict and ownerless mines was calculated as R30 billion. The DMR engaged other departments in order to address this problem, notably the Department of Science and Technology and the (currently named) Department of Water Affairs. In 2009, the DMR instituted the National Strategy on Derelict and Ownerless Mines, which established a Rehabilitation Oversight Committee to assist in overcoming the constraints. The implementation plan of the National Strategy on Derelict and Ownerless Mines was intended to proceed, even before the establishment of a permanent structure, although it was noted that such a structure must include dedicated resources and must address the issue of the environment broadly. The evaluation of 6 500 derelict and ownerless sites had been undertaken already, but this was not a fixed figure and was subject to constant change. The lack of resources had also meant that a ranking, or prioritising approach had been adopted, in order to decide which sites would be addressed first. Criteria for the ranking of sites included proximity to communities, residual deposit potential, acid mine drainage problems, subsidence, spontaneous combustion and environmental impacts. From this ranking system, 154 high priority sites were identified, comprising 54 asbestos mines, and 100 gold, coal, and other mines. The second step after identifying a site would be to trace the original owners, where applicable, and hold them accountable. The DMR also hoped to evaluate legislative provisions to assist with mitigating the problems of derelict and ownerless mines. DMR had also attempted to identify alternative funding mechanisms, and would need to seek partnerships with key stakeholders in order to find collaborative solutions.

Mr Mabuza concluded that the DMR recognised the magnitude of the problem of derelict and ownerless mines, but that it could not address the issue alone. Instead, it was necessary to find an innovative approach that drew on expertise and oversight given by other entities, including the Committee.

Mr E Lucas (IFP) said that solving the problem of derelict and ownerless mines would be a mammoth task. However, he cited a mine in Richards Bay, which was simultaneously engaging in mining and rehabilitation, and said that there were some success stories. He asked if any owners who were traced would be able to reclaim mining rights in the event that new discoveries indicated that their mines would be profitable.

Mr Mabuza responded that the Richards Bay mine model was one of the world’s best case studies of how a mine and the environment could co-exist. He said that the DMR was seeking to extent this model to other mines. He also said that all derelict and ownerless mine mineral rights were vested in the State, so owners could not come back and stake a claim to such rights.

Ms F Bikani (ANC) asked how much of the required R30 billion had been budgeted by the DMR to deal with derelict and ownerless mines.

Mr Mabuza responded that of the R30 billion that was estimated to be the total cost of rehabilitation, R52 million had been allocated in this financial year for such an exercise. He said that rehabilitation of one site could cost between R5 million and R100 million, and it was hard to say how many sites could be rehabilitated with R52 million.

Ms Bikani asked how much progress had been made with regard to developing a strategy plan for addressing the problems.

Mr Mabuza responded that the national strategy plan had been approved in December and progress was ongoing.

Ms Bikani asked whether the closure of a mine required certification.

Mr Mabuza responded that the DMR enforced strict criteria for the closing of mines. The DMR did not want more derelict and ownerless mines to be added to the database. He said that no closure certificate would be issued unless the Department of Water Affairs had given assurances to the DMR that a certificate to a mine could be issued. Only once the full rehabilitation requirements had also been met could such a certificate be issued.

Ms Bikani asked to what extent the DMR prioritised public-private partnerships in order to solve the issues.

Mr Mabuza responded that the DMR continually sought partnerships with the private sector, and the DMR had already sought out key stakeholders whom it regarded as important to the rehabilitation efforts.

Ms Bikani asked whether there were statistics regarding traced owners of derelict and ownerless mines.

Mr Mabuza responded that tracing owners of derelict and ownerless mines was not easy. The DMR was embarking on a move to trace as many as possible, but even where this was not possible, the DMR itself would still address the challenges of such mines.

Mr M Sonto (ANC) asked what was being done by the DMR to educate and involve the communities affected by derelict and ownerless mines.

Mr Mabuza responded that the DMR took the responsibility of educating communities very seriously.

Mr Sonto asked what preventative measures were being put in place to avoid a lack of owners’ responsibility in the future.

Mr Mabuza responded that the MPRDA framework ensured that in the future the problem of derelict and ownerless mines would not be allowed to happen.

Mr Sonto asked what was meant by the statement that previous owners were ‘called to account’ for the state of their disused mines.

Mr Mabuza responded that the current MPRDA did not have any punitive measures. The DMR was looking to evaluate and amend that legislation. However, even when this was done, the State recognised that several parties bore collective responsibility and was willing to take its share.

Mr Sonto said that this was not being ‘called to account’.

Mr Mabuza responded that he was referring to future provisions in the MPRDA legislation that would allow for punitive measures, when he made the references to owners being called to account.

Ms Bikani asked how many former owners were traceable.
Mr Mabuza responded that the DMR was not in a position to say how many were traceable, but that the DMR did recognise the difficulty and complexity of the challenge.

The Chairperson said that the owners should be traceable and asked whether Section 47 of the MPRDA could not be used to evoke forced responsibility.

Mr Michael Oberholzer, Chief Director: Mineral Regulation, Department of Mineral Resources, responded that Section 47- dealing with rights issued- would not be applicable to persons who fell under the previous legislative requirements. It was necessary to get a legal opinion to establish how the DMR could hold people responsible. However, there was provision in Section 38(2) of that Act that stated that mine operators could be held responsible for environmental issues around their mine.

The Chairperson asked why DMR was bothering to undertake the process of tracing if nobody could be held responsible.

Mr Mabuza responded that the legislation was preventative, and that it was primarily in place to try to stop any future instances of derelict and ownerless mines.

Ms Bikani asked what had been done with regard to rehabilitation, as opposed to what would be done. She wanted to know whether any real actions had been taken to solve the problem.

Mr Mabuza responded that the oversight committee was only five months old, and that the work presented was conducted in a very short period of time.

Mr Sonto asked whether any measures were in place to prevent those who had been responsible for derelict and ownerless mines from returning to the industry.

Mr Mabuza responded that the DMR took the situation seriously. No individual who would be detrimental to the industry if he or she undertook or was involved with mining should be a member of the mining industry. This was the reason behind Section 38.

Ms Bikani said that she had been made aware that only one person in the DMR was responsible for rehabilitating asbestos mines nationally. She said that this was not a realistic response by the DMR to the problem.

Mr Mabuza confirmed that only one person was made responsible for asbestos mine rehabilitation. This lack of personnel was due to human resource and financial constraints. Mr Mabuza agreed that this situation was unfortunate.

Ms L Moss (ANC) said that the presentation was not constructive and that the Committee would like to see what was really being done. She said that the DMR’s oversight committee should make a presentation to the Committee.

Mr Lucas said that a forward-looking approach should be adopted and that derelict and ownerless mines that still had profit potential should be wisely invested for future generations.

Ms Bikani asked for more information about the Richards Bay mine that had been used as an example of successful rehabilitation. She also requested the strategy plan of the DMR oversight committee.

Mr Mabuza responded to these comments and requests by saying that the move to rehabilitate so many mines was a huge task. The more that the DMR delayed, the more the problem would grow. He said that he hoped he had portrayed the magnitude of the problem to the Committee.

The Chairperson assured Mr Mabuza that the Committee appreciated the scale of the task. He said that the Committee would require from the DMR an indication of when a strategy plan would be ready. He also said that before the Committee reverted to the Auditor-General, it would need, from the DMR, a presentation on the implementation of recommendations that the Auditor-General had articulated in his report of 5 March.

Mr Mabuza promised that the Committee would get a response by the end of Monday 17 May.

Chamber of Mines (COM) briefing
Mr Mzolisi Diliza, Chief Executive Officer, Chamber of Mines, said that many of the issues had already been raised by the DMR. He said that this was proof of the cooperative arrangement between the two entities. Mr Diliza reiterated the earlier points made about the importance of the mining industry in South Africa, and said that this particular industry had a responsibility to ensure environmentally sustainable practices. Mr Diliza mentioned that there was a difference between derelict and ownerless mines, and legacy mines. A derelict mine would be a mine that had no activity but where a person responsible for the mine had been traced. An ownerless mine referred to a mine that had no activity and where it was not possible to trace the owner. A legacy mine would be one where the owner did not have the financial resources to solve the environmental problems that the mine had caused.

Mr Diliza said that the historical context was of importance and it must be remembered that in the past no environmental considerations were made. As other countries had already proved, it would be an expensive exercise to change this state of affairs, and it must be recognised that the changes would not take place overnight.

Mr Nikisi Lesufi, Senior Executive: Health and Environment, Chamber of Mines, noted that on an ongoing basis many mines were reaching the last stages in their lifecycle, and many owners did not have the resources to fund rehabilitation. This problem certainly had to be addressed. As important as addressing current problems was the need also to prevent future problems. Current mine owners, in terms of the MPRDA, were responsible for environmental management and remediation of the mine, financial guarantees for rehabilitation, and mine closure, and would continue to be liable until the certificate was issued. He noted that in order to acquire a license to mine, the Environmental Management Programme (EMP) stipulated stringent environmental management requirements that had to be met. Under new legislation, mines were also obliged to engage in concurrent rehabilitation, which must be funded as running costs, as well as end of life rehabilitation, which would be funded from the mine trust funds.

Mr Lesufi cited two means by which rehabilitation of derelict and ownerless sites and legacy sites had been undertaken. The first was a collective approach. This had, for example, been used at the
Emalahleni Water Reclamation Plant and other initiatives in the Olifants River Catchment Area. Mines responsible for pollution in the area had established a central water treatment facility and were releasing treated water into the Olifants River. The second was an individual approach. He cited the example of various mining companies who had endeavoured to have a zero-effluent policy. Xstrata, Optimum, Goldfields and AngloGold Ashanti had all developed water treatment facilities in order to reach this goal. The second example of an individual approach was of mining companies who had sought to establish one mega tailings storage facility (mine dump). Harmony Gold, Goldfields, Mintails and Rand Uranium had all consolidated their separate dumps into well managed mega dumps.

Mr Lesufi concluded that innovative, win-win solutions were necessary to solve the problem of legacy sites. It was the obligation of government to cooperate with any private sector initiative to rehabilitate mines, and a multi-stakeholder approach was necessary. To illustrate this last point, Mr Lesufi gave an example of a lack of cooperation, where the Department of Water Affairs had rejected an initiative by private entities in investing in a water treatment, on the basis that it would potentially be profitable. This lack of cooperation would continually prove to be a conundrum in addressing the problem of environmental sustainability.

Mr Lucas said that the key word in solving the problem of derelict and ownerless mines was “cooperation”. He said that now that the problem had been recognised, a plan must be implemented. He suggested finding another source of income, perhaps through the increased gold price.

Mr Diliza responded that alternative sources of funding did need to be assessed. The gold price, however, was prone to volatility and could therefore not be used as a consistent form of income.

Mr Sonto suggested that the DMR could assist the Chamber of Mines in getting the Department of Water Affairs to approve measures that would enhance rehabilitation, whether profit-driven or not. He said that a direction needed to be clarified so that cooperation could develop.

Ms Bikani asked about the rejection of prospective rights of small scale miners in the Northern Cape. She asked whether they were being treated fairly.

Mr Diliza responded that the MPDRA was clear in terms of license criteria. He said that areas of health and safety were always a problem, and that exceptions could not be made for small scale prospectors.

Mr Mabuza continued that small scale mining was a meaningful tool of uplifting communities. Most applicants, however, did not spend adequate time learning about the mining business.

Mr Oberholzer said that every applicant would be notified in writing, with reasons, if the licence application was rejected. If there was a wide-spread case of technical difficulty in meeting the requirements, then the issue certainly needed to be addressed by the DMR.

Ms Bikani said that the reason was almost always the requirements of the MPRDA.

Mr Oberholzer responded that more detail would be sought on these cases and assistance would be given.

Mr Mabuza said that if there existed a common problem, it must be identified and solutions must be developed.

The Chairperson requested that the DMR develop its strategy report, and echoed Members’ requests for a briefing directly by the DMR oversight committee. There was a need to re-engage on these issues in the near future.

The meeting was adjourned.


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