Mining Charter; Derelict and Ownerless mines: progress report by Department of Mineral Resources

Meeting report

The Chairperson explained that Minister Shabangu was unable to attended the meeting as she was briefing the President on the Department’s program of action. The Director General as well as the relevant Deputy Director General were in a meeting with the Portfolio Committee on Economic Development.
 
Mining Charter progress report
Mr Mosa Mabuza, Acting Chief Director: Economics in the DMR, explained the context in which the Mining Charter was conceived, its impact on the industry and economy by looking at the indicators of Mineral Rights Structure, Employment, Investment, and Economic Indices. He assessed transformation progress against the Mining Charter elements and discussed the amended Mining Charter of 13 September 2010.

The Mining Charter was a stakeholder negotiated document that was established in terms of Section 100 of the MPRDA, 2002. When it was leaked to the media in 2002, the country lost 52 billion rand in 48 hours. It was the first sector instrument to effect transformation.

The objectives of the charter were to promote equitable access to the nation’s mineral wealth; expand opportunities for historically disadvantaged South Africans (HDSAs) to benefit from the exploitation of the nation’s mineral resources; utilise the existing skills base to empower HDSAs and to expand the skills base of HDSAs; promote employment and advance the social and economic welfare of mining communities and the major labour sending areas and promote the beneficiation of RSA mineral commodities.

The elements of the Mining Charter included: Ownership and Joint Ventures, Human Resources Development, Employment Equity, Mine Community and Rural Development, Housing and Living Conditions, Beneficiation, Procurement and Reporting.

Before the MPRDA was promulgated, mineral rights were vested in private hands, thwarting the potential for investment. The MPRDA vested custodianship of mineral rights in the hands of State, unlocking the inherent potential for mineral development. The regulatory framework of the MPRDA enabled diversification of mineral commodities and their socio economic impact (from depleting Gold resource development)

More than 26 000 applications have been received by the DMR since the promulgation of the new regulatory framework which proved that there was a continuing mineral rush in South Africa.

A graph showed employment trends in the mining industry between 1980 and 2009. The graph showed that there was a period around 1987when the mining sector employed more than 800 000 people. In 1986 the gold production went into decline in South Africa, resulting in a steady decline in jobs which reached its lowest point in 2001 when the mining sector employed only 400 000 people. Since then it had increased to 500 000 again. This increase coincided with the promulgation of the MPRDA as well as with the longest commodity boom in history.

Mining investment between 1998 and 2008 showed. There was a slight decline from 1998 to 1999 after which it increased steadily until 2003. Between 2003 to 2005, there was a decline from R17 500 million to R12 500 million. It has been said that this decline was due to the regulatory framework, but nothing new was introduced to the mining sector during this period. The MPRDA, when it was promulgated in 2001, spelt out the regulatory framework. Another factor that might have influenced the temporary drop in investment was the fact that the rand was weak in 2001, but became increasingly stronger until it peaked in 2004-5. Since 2006 investment had grown steadily and had reached R25 000 million in 2008.

Mr Mosa Mabuza presented the same statistic in a slightly different way in the next two slides. In the first, the period between 1998 and 2003 was looked at and the average investment growth rate determined. It was found to be 7.42%. For the period 2004 to 2008 in the next slide, the average investment growth rate was found to be 17.95%, almost triple that of the pre-2004 figure. The next slide showed mineral export sales. Here the steady increase between 2001 and 2008 coincided with the longest synchronised commodity boom in the world.

The next graph showed the contribution of Mining to the Gross Domestic Product (GDP) of the RSA, between 2000 and 2008. As a percentage of GDP it averaged at around 8%, but in quantitative terms, it increased from just over R50 billion in 2000 to R200 billion in 2008. The next slide showed the GDP per capita for the RSA. Between 1998 and 2003, it grew by an average of 9.1% and between 2004 and 2008, it grew by an average of 11.2%.

The Gini Coefficient was an index measuring inequality in societies. South Africa was the most unequal society in the world in terms of income levels by class, gender and race. This happened while the GDP per capita was growing steadily, year by year. This meant that there were structural challenges built into the economy that prevented the benefits of the growth and increased wealth to be distributed to the population at large or to address the needs of the country.
 
The progress against the charter targets were measured using records from the Department and mines, questionnaires, detailed analysis of data, the services of external consultants, and interrogating the Charter 2002 construct. The external consultants were utilised to collect the data. The processing and interpretation of the data was done inside the Department. The survey spanned large, mid-tier and small companies throughout the nine provinces. The data was measured against the 2002 Mining Charter targets.

> In terms of ownership, the target of the Charter was 15% of the mining sector had to be in HDSA hands within 5 years and 26 % within 10 years. Ownership was measured against the value of mining in SA in 2009 and 8.9 % was achieved so the target of 15% was not reached. Actually, 8.9% did not belong to HDSAs. This was the value of Black Economic Empowerment (BEE) transactions.

A significant part of that 8.9% was locked in the cumbersome financial structuring that affected BEE transactions. It was locked in the weighted average cost of capital that financial institutions imposed on BEE transactions. It was locked in the legal costs that BEE companies have to carry the burden of. It was also locked in the management cost that affected those BEE transactions. On the net, there was a lockup of 25% in the upside potential of a project, which was also included in the 8.9%

Part of the cumbersome structuring was that BEE firms were not allowed to handle cash flows. They were paid in dividends that went directly towards paying the debt that was incurred in order to render the service. It did not matter whether a portion of the debt had been paid.

Only financial institutions, legal firms and mining advisers benefit from BEE, not the HDSAs. BEE companies actually inherit a negative value from BEE transactions, which cannot be correct.

> To quantify Human Resource Development, three measures were used:
▪ Whether the company offered every employee the opportunity to be functionally literate and numerate by the year 2005 and whether employees were being trained.
▪ Whether the company had implemented career paths for HDSA employees and skills development plans.
▪ Whether the company had developed systems through which empowerment groups could be mentored.

17% of companies had achieved functional literacy, 17% had implemented career paths and 11% developed systems through which empowerment groups could be mentored which meant that 89% of companies never engaged in the mentoring of BEE companies.

> To quantify employment equity, four measures were used:
▪ Whether the company had published its employment equity plan and reported on its annual progress.
▪ Whether the company established a plan to achieve a target for HDSA participation in management of 40% within 5 years and was implementing the plan.
▪ Whether the company had identified a talent pool and was fast-tracking it.
▪ Whether the company has established a plan to achieve the target for women participation in mining of 10%within the five years and was implementing the plan.

26% of companies had achieved the 40% threshold. 26% of companies achieved the 10% participation of women in mining. This was an ambiguous success because white women were classified as HDSAs and mining companies simply employed white women in order to meet the quotas. As this measurement was broad and vague, companies appointed HDSAs other than white women in junior management positions and still met the quotas. HDSAs were represented in only limited numbers in the core specialised skills that underpinned the sustainable growth of the mining industry. The industry could not grow if black people were appointed only in the roles of Human Resources and Government Liaison Officials. 17 % of companies implemented the talented pool identification and fast-tracking.

> To quantify the degree to which companies contributed towards the mine community and rural development, two measures were used:
▪ Whether the companies cooperated in the formulation of an integrated development plan (IDP) and whether the company was cooperating with government in the implementation of these plans for communities where mining took place as well as major labour sending areas.
▪ Whether there had been an effort on the side of the company to engage local mine community and labour sending area communities. Companies had to prove consultation, money expenditure and produce a plan.

63% of companies consulted with the mining communities and labour sending areas, however, if the tensions between mining companies and communities were anything to go by, the quality of the consultation was poor. 49% of companies cooperated in the formulation of an IDP in mining communities and 14% of companies helped to develop IDPs for labour sending areas.

> To determine the progress in living conditions in mining towns and compounds, two measures were used:
▪ Whether the mine, in consultation with stakeholders, established measures for improving the standard of housing it provided, including the upgrading of hostels, the conversion of hostels to family units as well as promoted home ownership options for mine employees. Companies were required to provide a plan and provide progress reports as proof of implementation.
▪ Whether the mine had established measures for improving the nutrition of mine employees, in cases where the company provided food. Companies also had to provide plans as well as progress reports as proof of implementation.

26% of companies provided housing to employees. 29% of companies had improved the existing housing infrastructure. 34% of companies assisted employees to become homeowners. However, in some cases the subsidies were in the vicinity of R500-600 with the result that it was too little to realistically buy property at market-related prices, resulting in the proliferation of informal settlements around mining towns.

29% of companies had established nutritional plans for their employees. 9% of companies had upgraded their hostels and 6% converted single sex hostels to family units. Whereas before there were an average of 16 men living in a room, it had come down to an average of four.

Some of the percentages look low, because not all mines provide hostel accommodation, and some of the options were mutually exclusive, in other words, a company that turned hostels into family units, would not necessarily upgrade single sex hostels as well and thus would not register a statistic under that heading.

> Transformation in the procurement practices of the mining sector was measured by:
▪ Whether the mining company had given HDSAs preferred supplier status.
▪ Whether the mining company identified the current level of procurement from HDSA companies in terms of capital goods, consumables and services.
▪ Whether the mining company had indicated commitment to a progression of procurement from HDSA companies over a three to five year time frame in terms of capital goods, consumables and services and to what extent it had been implemented.

37% of mining companies procured from HDSA companies. 11% of mining companies had given HDSA suppliers preferred status. 20% of mining companies had made a 3 to 5 year commitment to procuring from HDSA companies, but the value of these transaction accrued to 3% of the value of all transactions in the mining sector, because the HDSA companies were not contracted for core mining functions, only for peripheral functions such as cleaning. This was not sustainable.

> Beneficiation was measured in terms of:
▪ Whether the mining company had identified its current level of beneficiation.
▪ Whether  the company had determined its baseline level of beneficiation and indicated the extent that this will have to be grown in order to qualify for an offset.

The beneficiation strategy had been finalised by the Department. It would be presented to Cabinet within the current financial year. No statistic was available as yet, because the tool to measure was still in the process of being developed.

> Mining companies undertook to report on an annual basis as per the provisions of section 28(2)(c) and section 29 of the MPRDA and the measure was whether the company had reported on an annual basis its progress towards achieving compliance to the Mining Charter in its annual report.

37% of mining companies had their reports audited but only 11% submitted their reports to the Department. The Department was in the process of putting in place the capacity to receive and process this data.

There was a report that would be made available to the Committee which detailed the presentation that Mr Mabuza was delivering. One of the major findings of the report was that the construct of the Mining Charter was problematic. The identification of the elements was correct, but there was room for ambiguity and misinterpretation in the way in which it was constructed. The statistics reported proved this fact.

The process of amending the Mining Charter was part of a bigger approach that the Department had adopted, together with its mining stakeholders such as the Chamber of Mines, the South African Mineral Development Association (SAMDA), the National Union of Mineworkers (NUM) and Solidarity.

At the implosion of the financial crisis in 2008, the Department lead the establishment of a task team called Mining Growth Development and Employment Task Team (MIGDETT). Its mandate was firstly to mitigate against the vagaries of the economic crisis and secondly to recommend interventions to position the mining industry along a growth trajectory, when the upswing started.

MIGDETT recognised that the growth of the mining industry and transformation were viewed in many circles as mutually exclusive, and it was agreed that mechanisms had to be developed to emphasise the mutually reinforcing nature of growth and transformation. It had to be both, not one or the other, because it would be unsustainable.

Under the auspices of MIGDETT, two task teams were established, one on competitiveness and one on transformation. The amendments to the Mining Charter was based on all of the members of MIGDETT.

The review of the Mining Charter was aimed at strengthening and sharpening its effectiveness in driving transformation and competitiveness in the mining sector, to improve the construct of the language and the scorecard and to remove ambiguities. The old scorecard required yes/no answers, while the new scorecard left space for nuances.

The reviewed Mining Charter retained all the original elements and added a new element on Sustainable Development

The target in terms of ownership in the amended Mining Charter was to have 26% HDSA ownership by 2014, emphasising meaningful BEE ownership by entrepreneurs, employees and communities. The financing structures needed to be reviewed. Off-setting was only permissible against the value of beneficiation, because beneficiation allowed for other economic activity and the creation of additional employment.

In terms of procurement and enterprise development, the amended Mining Charter aimed to achieve a minimum of 40% of capital goods, 70% of services, and 50% of consumer goods procured from BEE companies by 2014. Multinational suppliers, which contribute nothing to the development of the country, would be levied 0.5% of their annual income which would be channelled into a social fund.

In terms of employment equity, the amended Mining Charter aimed to achieve a minimum of 40% HDSA demographic representation by 2014 at board level, senior, management, core and critical skills, middle management and junior management levels. Mining companies also had to fast track existing talent pools to ensure high level operational exposure in terms of career path programs.

A pie graph demonstrated the demographics of occupational distribution in the mining sector. It read as follows: 85.5% African, 12% White, 0.4% Asian, and 2.1% Coloured. There was an expectation that the same demographic would be found at all levels of employment in the sector, but it was not the case.

In terms of human resources, the industry agreed to invest a percentage of the payroll in essential skills development reflective of demographics as follows: from 3% in 2010 to 5% by 2014. Currently the annual payroll in the mining industry was R60 billion and taking growth as well as the increase to 5% into account, it made for a significant sum to start to address skills development in the industry.

A table showed a breakdown by race of mining engineers employed in the industry for 2007 and 2008. In 2008 there were 7 Black, 17 White, 1 Coloured and 3 Indians engineers employed in the industry, who had doctorates. This reflected the opposite of the ethnic demographic, which had to change.

As far as mine community development went, stakeholders had to adhere to international best practices and guidelines. Stakeholders had to invest in ethnographic community consultative and collaborative process prior to implementation of mining projects.

Stakeholders had to conduct assessments to determine developmental needs in collaboration with mine communities. It had to identify projects for contribution towards community development in line with IDPs, proportionate to investment, otherwise it would not be sustainable.

In terms of housing and living conditions, for mineworkers, companies had to, where applicable, convert/upgrade hostels into family units by 2014. There had to be an occupancy rate of one person per room in hostels by 2014. Home ownership for miners had to be facilitated in consultation with organised labour by 2014.

In terms of sustainable development and growth in the mining industry, the amended Mining Charter prescribed and stakeholders agreed, that mining companies had to implement elements of sustainable development commitments in their Stakeholders’ Declaration, improve on environmental management, improve on their health and safety performance, and had to use RSA based facilities for analysis of samples in the mining industry.

Concerning beneficiation, to comply with the amended Mining Charter, companies had to facilitate local beneficiation by adhering to Section 26 of the MPRDA and Beneficiation strategy. The level of beneficiation could be offset against a portion of the HDSA ownership, but not exceeding 11%. This would be implemented in 2012.

Concerning reporting, monitoring and evaluation, a detailed scorecard had been developed, with specific weightings allocated to all elements of the Charter as well as its sub-elements. The reporting was provided for in terms of section 28(2)(c) and section 29 of the MPRDA and this reporting requirement, as outlined in the scorecard, provided for a qualitative and quantitative assessment of the progress in transformation the mining industry was making on an annual basis. There were mechanisms to deal effectively with non-compliance in Section 99 of the MPRDA. Section 47 of the MPRDA contained penalties such as suspensions and cancellations of rights.

Concluding remarks
The Mining Charter was a pre-cursor to all sectoral charters (all of which were premised on the identical elements originally identified). The extent of transformation of the mining sector against the charter elements was grossly inadequate. The construct of the Mining Charter 2002, as a negotiated and compromise document, presented grey areas in the elements and measures of the scorecard, and it had unintended consequences of exploitation and multiple interpretations. A lack of capacity within the DMR, compromised the extent of vigilance on the implementation of the Charter.

The Charter focused on transformation of the sector alone and there was a lack of focus on the sustainable transformation and growth of the sector. The industry had viewed the Mining Charter as a compliance mechanism, not as a business imperative, in the first five years. The Department and Parliament as policy makers presumed that everybody was committed to transformation. This was not the case. The amended Mining Charter attempted to eradicate ambiguous use of words or interpretations. It introduced an element of sustainable development and a scorecard with clearly defined targets. Reporting mechanisms were well defined and reporting was required on an annual basis. Companies had to report levels of compliance annually. The MPRDA had to be reviewed to beef up penalty provisions that might be imposed on companies for non-compliance.

Progress on the management and rehabilitation of derelict and ownerless mines
Ms Ntokozo Ngcwabe, Chief Director: Mineral Policy, said that the Amended Mining Charter of 2010 had been completed and gazetted. Her presentation consisted of nine points: Definition, History of the Legacy, Database of D&O mines, Prioritisation & Ranking of D&O Mines, Assessment of financial impact, Selected Rehabilitated Sites, Acid Mine Drainage in Witwatersrand Basin, Implementation Plan, Conclusion.

History of the legacy
In 1903 the Transvaal Mining Laws were passed which provided only for the safe-making of the operations. There was no legislation that obliged a mining company to rehabilitate the environment after mining in a certain area. They mined and then left the environment damaged.

From 1931 to 1951 there were mines, works and machinery regulations. There were prescriptions for minimum distances to structures. With the Mines and Works Act of 1956, basic planning for environmental recovery was introduced. The rehabilitation plan included topsoil treatment and vegetation recovery.

 In 1991 the Minerals Act was passed. By then there was a growing awareness of the environment and mines had to make financial provision for closure. There was life cycle planning for mines and guidelines were laid down for rehabilitation when the mine closed.

In 2004 the MPRDA was promulgated. It included a social and labour plan and the National Environment Management Act (NEMA) and National Water Act (NWA) sustainable development principles were integrated into it.

The National Environmental Management Act 107 of 1998 (NEMA) imposed a duty that required that:
‘Every person who causes, has caused or may cause significant pollution or degradation of the environment must take reasonable measures to prevent such pollution or degradation from occurring, continuing or recurring, or, in so far as such harm to the environment is authorised by law or can not be reasonably avoided or stopped, to minimise and rectify such pollution or degradation of the environment.’ Section 28(1)

The Department of Water and Environmental Affairs (DWAE) as the custodian of South African water resources was mandated by the 1998 National Water Act (NWA) to ensure efficient, equitable and sustainable use of water resources in a way that is beneficial to the public. The slogan of DWAE is “some for all forever” underlining the mission of DWAE to ensure a sustainable supply of water for South Africa.

Derelict and ownerless mines were often confused with abandoned mines, which were not necessarily ownerless. The owners of these mines could not be traced. In these cases the state had to assume liability. In cases where the owners were found the DMR was determined to enforce the law.

In the East Rand alone, the DMR had managed to trace around 100 owners of abandoned mines. In law there was nothing that empowered the state to take these mine owners to task, but it would not prevent the DMR to get them to take responsibility for their mines and for the rehabilitation of the environment surrounding it.

Environmental impacts for D&O Mines were: Health and safety issues due to direct access, surface water pollution, ground water pollution, air pollution, damage to sensitive environments, impacts on current and future land use, impacts on heritage resources. The last point referred to mining in the MapungGubwe area, which was a heritage site. DMR, together with the Department of Environmental Affairs, were currently dealing with this issue.

The measures taken to address the impacts on the environment were:
▪ the development of a database of D&O mines,
▪ prioritisation and ranking of the different cases according to urgency,
▪ the assessment of financial requirements, and
▪ in some cases, the commencement of rehabilitation.
The state would require an estimated figure of R30 billion to restore and rehabilitate all the D&O mines.

A database of D&O mines
This had been compiled with approximately 6 152 sites identified. The database was compiled by identifying mineral deposits, by verification with DMR Regions and on field verification and ranking visits and by getting information from other sources. Some sites were extremely hard to reach.

New applications for mining licences meant that the database was dynamic since it changed as ownerless mines were bought by new owners and granted prospecting rights.

The National Promotion Mining System (NPMS) through which new applications for mining licences were processed, would be loaded with the co-ordinates of all the D&O mines, so that when an application was granted, and its co-ordinates coincided with a site that had been identified as a D&O mine, that site would be taken off the database, because it would then be identified as an active mine.

For the first time in the history of South Africa, a comprehensive database existed detailing D&O mines, which made it possible to address the challenges it posed in a systematic way.

Prioritisation and ranking of D&O mines
Sites had to be grouped and prioritised. They were grouped according to commodities and their expected environmental impacts. In the case of gold and coal mining areas, there would be impacts on water resources for example acid mine drainage. Sites were also grouped according to provinces and the scale of rehabilitation that would be required. This was done to categorise the sites according to what was needed and the expected rehabilitation bill it would generate.

Sites which posed an immediate threat to communities were prioritised, for example asbestos sites, openings, trenches and shafts within the Gauteng, region, particularly in the Wits Gold Basin. Since 2007 the program focussed on open trenches and shafts, because these shafts made the acid ground water problem worse. The areas focussed on were Gauteng, North West and Limpopo. There were about 900 and 108 of these in Gauteng have been sealed already.        

In Limpopo, open shafts in the Giyani Greenstone Belt as well as asbestos sites were identified for localised rehabilitation projects. In Gauteng, open shafts in the Scott Asbestos Mine and the Edendale Lead Mine was identified for localised rehabilitation. Also in Gauteng a site identified for large scale rehabilitation projects was Witwatersrand Gold Fields where water, radioactivity and windblown dust and safety issues caused concern at abandoned gold and uranium mines. In KwaZulu-Natal Water and safety issues related to abandoned coal mines were identified for large scale rehabilitation. The Osizweni Coal and Clay mine would require extensive rehabilitation. In the Eastern Cape, Lusikisiki Quarry had to be rehabilitated. In the Northern Cape, sites identified for localised rehabilitation were the open shafts on Cornish Mines in the Namaqualand Copper District and Asbestos Workings. Also sites identified for large scale rehabilitation projects were water impacts related to copper mining in the Namaqualand Copper District.

Given the large number of sites, those posing the greatest risk to human safety and the environment had to be prioritised. Ranking was implemented to refine the prioritisation and 85 sites have been ranked and a number of priority areas have been identified for immediate rehabilitation.

The databases and maps of the Department of Water Affairs, depicting human settlements and water supplies, were used to determine which D&O mines were situated near communities and posed a threat to them. Such mines were then prioritised for rehabilitation. Using this method, a few asbestos sites have been identified in the Mafefe area in Limpopo. The 85 sites have been ranked and the ongoing processes would take about five years depending on availability of funds.

Assessment of the financial impact
To get an approximate estimate of the cost to the state to rehabilitate D&O mines and environments, a desktop approach was used, and it was assumed that all mines would be rehabilitated. The guideline document for financial provision as well as estimates for specific sites were used. The State would need to spend approximately R30 billion to rehabilitate D&O mines. This figure would be under constant review and would be adjusted regularly.

Every site had to be assessed individually to see what was needed in each particular case. Some would require no rehabilitation, others basic rehabilitation to satisfy safety requirements. In some cases specialised rehabilitation, for example the installation of bat grates in shafts in conservation areas. The DMR did some international benchmarking in order to inform itself and found that a bat grate would cost around R20 000 per shaft, while the filling of the shaft would cost R 200 000 to 300 000.

Selected Rehabilitated Sites
Rehabilitated mines had one of three possible uses: economic, recreational or tourism. In the case study where the bat grate was installed, the area was rehabilitated to a conservation area and bats lived in the mine. The grate allowed them to go in, while it kept humans out of harms way.

Sites had to be assessed individually and the best end land use had to be identified, before the work started. Then one worked backwards and did the rehabilitation in such a way that it produced an environment in harmony with the intended end land use.

A total of 48 asbestos mines had been rehabilitated in the Northern Cape and Limpopo. 108 dangerous trenches and shafts had been rehabilitated in gold mines in Gauteng. Also there was  general maintenance of D&O slime dams to maintain the grass and prevent runoff.

At the Transvaal & Delagoa Bay Coal Mine near Emalahleni, access to the mine was prevented. A plan for full rehabilitation had been developed. It would cost over R100 million to implement.  The DMR received R50 million from National Treasury annually for this program, which was half of what was required for one site, keeping in mind that there were 6000 sites!

The DMR had completed the rehabilitation of four sites, together with Mintek. Strelley Mine in the Northern Cape was one and 42 workers were employed during its rehabilitation. The Jebolo Asbestos mine was another, and 14 workers were employed during its rehabilitation. Prieska Asbestos Old Mill in the Northern Cape was rehabilitated employing 37 workers. The Municipality was going to develop the site into a memorial park for victims of asbestos. The fifth project had suffered delays because the Department had to request for extra funding from Treasury to complete it. It would be completed by the end of January 2011.

The next slide demonstrated the hazard that abandoned and un-rehabilitated mine shafts posed to the public. A little boy stood in a footpath along which he and other children walked to school every day. There were holes in the path, which could look insignificant, if one was unaware of the fact that the holes were openings to a kilometre long shaft. No child would survive a fall down that hole.

The shafts were sealed with concrete and contained no metal. A 2,5 ton concrete block would then be placed over the shaft opening carrying a warning that there was a shaft. These servitudes were registered to title deeds so that if anyone bought the land afterwards, they would know about the shaft, and that the land was unsuitable for building on.

Public awareness about open shafts and the danger they posed, was created with pamphlet campaigns, in the communities and the schools in the communities where the DMR went to do rehabilitation work and the pamphlets were translated into local indigenous languages to make it accessible to the populace.

Real Time Issues - Acid Mine Drainage
Since 2003, the Department had undertaken some targeted research on strategic water management in the Witwatersrand Basin. The first objective of this research was the prevention of ingress of surface water and ground water to underground mine voids. The second objective was the establishment and recommendation of management solutions to reduce dependency on pumping to manage flooding of mines and spillage to surface (decant). The third objective was to predict when and where decanting would occur when pumping operations seized. The fourth objective was to predict the effects on the environment and the health risks associated with polluted mine water decanting to the surface. The fifth and most important objective was the development of management options to avoid the uncontrolled decant of polluted water onto the surface.

In terms of the first objective of this research, the prevention of ingress of surface water and ground water to underground mine voids, two goals had been achieved. Multiple ingress areas/ points had been identified, and the Florida Canal was under construction. The purpose of this canal would be to channel water away from the ingress points. What still remained to be done was short term actions to limit ingress, for example, cleaning culverts in the Blesbokspruit; secondly, verification of other ingress areas and proposal of solutions; thirdly, the construction of ingress management measures, and fourthly, the monitoring of stream flows.

In terms of the second objective, six goals had been achieved:
▪ Regional mine closure strategies now existed. The studies done in the areas proved that there were underground connection between the different mines and regions. If one mine in a basin or sub-basin stopped pumping, it flooded the rest and the danger existed to sterilise minerals that could have been economically viable to mine. Thus a regional approach was needed to manage this situation.
▪ Ingress management measures had been proposed. The thinking was that water had to be treated where it was, instead of being pumped to another area to be treated. It was cheaper.
▪ Intensive study of decant processes and impacts had been done, and there was a better understanding of decant processes and these could be predicted.
▪ Passive treatment technologies had been investigated.
▪ Water quality and levels were measured. The hype in the media about acid mine drainage flowing onto the surface was not true. The underground space had been modelled and water levels were being monitored.
▪ Seismic activity had been measured in the area. There was a belief that pumping was the ultimate solution to the problem. Pumping too much water could destabilise the ground and cause seismic activity. If water was allowed to rise to certain critical levels, it could have the same effect, in other words, it had to be constantly monitored and managed.

What remained to be done was:
▪ Implementation of flooding and decant control measures proposed in Regional Closure Strategies. This meant that water could be channelled to low-lying decant points and be allowed to flood or decant under controlled conditions, called controlled decanting. At this controlled decanting point the water could be treated and then channelled. These solutions were in place.
▪ The outstanding issue was funding as this was a costly exercise. The DMR had completed 96% of the work with the Science Council and would present its findings, including this presentation, to the inter-ministerial committee set up to address the acid water problem in the Wits Basin, in the next few weeks.
▪ Pilot studies had to be done as well as the implementation of passive treatment technology and the ongoing monitoring of water levels and decant points to provide reliable information.

In terms of the third objective, to predict when and where decant would occur when pumping operations seized, three goals had been achieved:
▪ Decant points and times had been predicted.
▪ It had been determined that it would take 18 months to reach environment critical levels (ECLs). ECLs were levels to which the water could be allowed to rise without creating a disaster.
▪ It had been determined that it would take 30 months to surface (this would not be allowed to happen).

What remained to be done was the refinement of predictions as more information became available from the continued research.

Implementation plan
The medium term plan was the Ten Year Implementation Plan that stipulated how these challenges would be met. A graph visually demonstrated a prediction that it would take until 2038 to rehabilitate all 6000 sites. The pink line indicated state liability. The blue line indicated the amounts of money involved, on the scale on the right hand side, taking into account inflation.

The plan was a medium to long term plan. It would be reviewed on an MTEF basis. It would be reviewed towards the end of the first ten years, but would be updated regularly, in terms of the technologies used during implementation, as well as learning from best practices in other countries.

There were three phases for implementation:
▪ Phase One 2010 to 2013: During this period the DMR would look at methodological development, amongst others, the development of a generic rehabilitation manual. In South Africa 53 different commodities were mined, and depending on the commodity mined and its environmental impact, practice would have to be adapted and manuals would be customised.

Large scale sites would be prioritised as well as sites with greater risks and impacts on society and the environment. On a large scale, structures for pumping and treatment would be set up. On a small scale passive treatment methods would be implemented.

▪ Phase Two 2013 to 2016: Large scale sites with medium risks and impacts would be prioritised. Monitoring and evaluation of treatment designs would need to be looked at. In areas like the Wits Basin large pumping and treatment plants would be warranted, but in other areas where the same need did not exist, smaller scale and less expensive technologies could be used to manage acid mine drainage.

▪ Phase Three would involve full scale rehabilitation of all sites and management for those requiring management going forward. It would also involve the implementation of other management solutions such as passive treatment. Monitoring and evaluation would be an ongoing activity and latent impacts would be evaluated. Some rehabilitated sites would seem to be stabilised at the moment, but 15-20 years down the line new impacts could emerge. This had to be watched out for. There had to be financial planning for those instances now already, so that it could be responded to promptly.

At this point the Rehabilitation Plan for further long term implementation would have to be reviewed. The budget would have to be reviewed taking inflation into account.

Financial Projections for the ten year plan amounted to R 1,4 billion. This would be taken to National Treasury. The work with the acid mine drainage water in the Wits Basin had shown that R400 million was needed to set up a medium scale treatment plant pumping 20 million litres of water per day (inflation not considered). One large mine cost R130 million to treat.

Conclusion
The D&O challenge was bigger than expected initially. The creation of the problem started with the first diamond mine in the 1661 in the Northern Cape. The reality was that 349 years of damage to the environment could not be resolved in the 14 years of the existence of this unit. The nature of mining was such that some of the impacts would be there forever and needed to be managed. A famous case study was the Rio Tinto River in Spain where the impact of mining activity was still there after 5000 years. Investment was needed in management principles and technologies. Dialogue had to take place on funding options and planning had to be done properly.

The Chairperson thanked the DMR delegation for their presentation. He said that there was no time to do justice to the discussion that these presentation asked for. He suggested that Members put their questions in writing.

Mr K Sinclair (COPE, Northern Cape) suggested that the Committee pay oversight visits to some of the sites mentioned in order to verify what the presentation said. The discussion could then happen afterwards.

After some more discussion the Chairperson concluded that the way forward would be an oversight visit to some of the mining sites in the Free State, accompanied by a delegation from the DMR and the discussion would be deferred to the 26 October 2010, when the DMR would present their Annual Report.

Ms Ngcwabe promised to forward the documents she mentioned in her presentation. These documents were the Declaration that was signed by the Minister and Industry, the gazetted Mining Charter and the review report of the Charter.

The rest of the meeting was a discussion on logistics and availability of Members for an oversight visit.

The meeting was adjourned.