Acid Mine Drainage Progress Reports: Department, Trans Caledon Tunnel Authority, & Mintek

Water and Sanitation

06 September 2011
Chairperson: Mr J De Lange (ANC)
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Meeting Summary

The Committee met with representatives of the Department of Water Affairs, Trans-Caledon Tunnel Authority and Mintek to hear progress reports on Acid Mine Drainage (AMD). The Department of Water Affairs (DWA) noted that the Committee had been furnished with copies of all directives issued to mines and there had been engagement with interested and affected parties on mine water reforms. The DWA would also submit quarterly reports on the relationship between mines, municipalities and the Department. Its current investigations included questions on recovery of costs incurred when treating mine water, the legal water quality standard for mines to discharge mine water, and under which law and conditions licences should be issued. The DWA was presently trying to ascertain how much treated mine water could be used by mines, and had considered its response to the Western Utilities Cooperation study done in 2009. The mine water levels in the Eastern, Central and Western basin were given, and it was noted that the Trans-Caledon Tunnel Authority (TCTA) had conducted a due diligence review and come up with short term solutions, supported by surface and ground water monitoring systems. Potential users of treated water were identified. Meetings had been held with the liquidators of Grootvlei Mine. There remained a challenge with the budget, although National Treasury had been requested for R924 million for capital expenditure. Regulators would have to identify and guard against the potential for exploitation by the private sector. Timeframes had been set in an implementation plan. The Department would try to avoid or reduce reputational risk through an information campaign. Rand Water was to be appointed to perform operations and maintenance in the short term, and a Monitoring Committee would support interventions. The Department of Mineral Resources (DMR) would offer some support. Members asked why no formal response had been given to the WUC, why the directives had been allowed to lapse in January 2011, which law was used and what standards were applied in relation to legal water quality, whether any water was being pumped from the Aurora Mine into Blesbokspruit, and what the status of the proposed investigations into this mine was.

The TCTA noted that the design lifespan was estimated at between 30 and 50 years, and a long-term solution was taken into account when selecting sites. The representative described what upgrades would be made in the Western, Central and Eastern basin, indicating for each how many megalitres of water would be used, and the target dates. Upgrades to Rand Uranium Plant in the Western Basin were targeted for implementation in November 2011. A new plan in the Central Basin would use pumps sourced at no cost from CRG Ritz, and in the eastern Basin treated water would be redirected, and sludge disposed of at Daggafontein, with the tenders due for September 2011, construction to start in January 2012 and closing in December 2012. The annual budget for operations and maintenance was estimated at R385 million. In view of the short timeframes, the procurement process would be carefully monitored, and, once again, a communications strategy aimed to reduce reputational risk. Long term solutions would be accelerated to minimise environmental damage. Members asked about the use of public / private partnerships, whether the State would be bearing costs up to “grey water” stage, why new pumps were to be installed at Grootvlei, why pumps could be secured at no cost, and what was to be done to help downstream users, including possible provision of alternative water. Members also asked why there was a different approach in the different basins.

Mintek noted that although overseas technology existed for treatment of AMD, it was not economically viable and local solutions had to be found. The Savmin process was described, involving various stages, and it was noted that if the funding was granted, it would be used for technical improvements and the construction of a demonstration plant in years 1 and 2, following which MSc students would be used, together with designers and engineers, to operate the plant, and generate a techno-economic model for various size plants in different locations. Each waste water treatment plant built would create new jobs. Members asked about Mintek’s relationships with other departments, and also asked if there was a likelihood of attracting foreign buyers.

Members noted the need to
amend the current proposal issued to Cabinet which had the unintended consequence of exonerating mining companies of all responsibility in the management of the AMD problem. The Committee made suggestions that other options should be explored. At present, it seemed that the public private partnership option was preferable, because the responsibility for the cost would be shared. However, the Committee stressed that when the Department presented the options to Cabinet, it must outline all possible outcomes and implications to enable Cabinet to make an informed decision. The Committee urged the DWA to be transparent and bring along other stakeholders, to ensure that all were moving in the same direction, and to conduct regular joint stakeholder consultations. National Treasury recommended that not only should the costing structure be transparent, but there was also a need to address the high fees and administration costs, which constituted 43% of the total budget proposal. Members also discussed the need to reintroduce directives which will ensure mining companies could be accountable. The Department was advised to hold ongoing consultations with WUC, to avoid any future legal problems, and the tender process should in the meantime remain open. DWA was asked to produce another progress report towards the end of this year, after it had presented to Cabinet.

Meeting report

Presentation by the Department of Water Affairs
Mr Marius Keet, Deputy Director: Water Quality South, Department of Water Affairs, said that the Department of Water Affairs (DWA or the Department) had ensured that the Committee was furnished with copies of all directives issued to mines, and had provided proof of engagement with interested and affected parties within mine water reforms. It had also started reporting to the Committee every three months on the relationship between mines, municipalities and the Department. It was in the process of looking into how it would recover costs incurred when treating mine water. It was further investigating, and would shortly finalise requirements on the water quality legal standards for mines to discharge mine water, as well as which law would be used to issue licences. It was also in the process of ascertaining how much treated mine-water could be used by mines. It would also be responding to the Western Utilities Coooperation (WUC) Feasibility Study done in 2009.

The Department reported that in regard to the proposal by the Western Basin mines on addressing acid mine drainage (AMD), the Inter-Ministerial Committee (IMC) on acid mine drainage had, owing to legacy issues, recommended that the State should take the lead in addressing the challenges around acid mine drainage in the Witwatersrand. The Department was also continuing to issue directives of high standing and would continue this process.

He reported that in the Eastern basin the mine water level was currently 628 meters from the surface, the environmental critical level (ECL) was at 306 meters, and the estimated date for reaching the ECL was December 2013. In the Central basin the mine water level was at 415 meters from the surface, with the ECL at 174 metres from the surface, and the estimated time that this might be reached was between August 2012 and March 2013. The Western basin was currently decanting.

Mr Keet noted that the Trans Caledon Tunnel Authority (TCTA) had concluded a Due Diligence Review for all three basins and a short-term treatment solution for each basin had been conceptualised. An immediate solution had also been approved for the Western basin, where a short-term solution was at an advanced stage of design. Surface and ground water monitoring systems were in place, and further expansions and improvements were planned to support short-term interventions. Potential users of treated mine water were identified in both the Western and Central basins. The Department and the TCTA had met with liquidators so as to understand the situation at the Grootvlei Mine in the Eastern Basin. Engagement with interested and affected parties had also commenced.

Mr Keet said that one of the biggest challenges was the budget. A request had been submitted to National Treasury for R924 million for capital expenditure (Capex). There was also a risk around the private sector exploiting potential solutions, and this was something that regulators had to identify and manage according to current legislation and/or policies. The TCTA had also formulated an implementation plan with realistic target dates so as to reduce the risks around timeframes. The Department would try to avert or limit reputational risk through media statements that would keep the public and key stakeholders informed. Rand Water would be appointed, by way of a Ministerial directive, to perform operations and maintenance of short-term solutions. In order to address the potential of unreliable data, the Monitoring Committee would ensure strategic monitoring programmes to support interventions in all basins. An Authorities Task Team had been established to deal with regulatory matters, encompassing all relevant regulators, who would review and expedite the required authorisations. Amongst other responses to the impact of neutralised mine water discharge into water courses, salt loading would be removed by 2014.

Mr Keet added that the Department of Mineral Resources (DMR) would also support the DWA, by giving access to mine shafts for monitoring, pumping and water treatment infrastructure. In addition to ensuring proper engagement with Provincial and Local Governments the DWA would also report to the Inter-Ministerial Committee and Cabinet.

Discussion
The Chairperson said that the issue of standards was crucial and therefore needed to be investigated thoroughly.

The Chairperson also noted that the Department needed to engage further with WUC before accepting or rejecting its proposal, as this could avert future legal action.

Mr Keet answered that there had been ample opportunity for WUC to make a presentation. However, he did concede that the Department had not presented a formal response on why it was not accepted.

Mr G Morgan (DA) asked why no formal response had been given to the WUC, and asked if the WUC had any future role to play.
 
Mr Keet answered that although he could not say exactly why the letter setting out the Department’s rejection of the proposal had not been signed, he would look into the matter. The reasons for this rejection were clearly stated in this letter. However, as there would still be a call for tenders, the WUC could not be prevented also from submitting a tender. Some of the information the Department had received from the WUC would also be used for future plans.

The Chairperson asked what had been the reasons for rejection of the proposal.

Mr Keet answered that, firstly, WUC had made an unsolicited bid. In addition, because between 60% and 70% of the mining area in the Central Basin was without any owners, the State had the most say in what happened on this land. If another entity were to come in and treat and sell the water there, this would be very likely to result in controversy.

The Chairperson asked what the directive given to the WUC entailed.
 
Mr Keet answered that the Western Basin mines were issued with directives to effectively deal with any discharge on their property. These mines then brought the WUC on board, going so far as to gather support for the WUC proposal from mines in other Basins. The Department did not set out to bring WUC on board.

The Chairperson asked why the directives had been allowed to lapse in January 2011.

Mr Keet answered that when the Department employed TCTA, this issue was the first one investigated, and it would have to be addressed within the coming months.

The Chairperson said that it was the fault of the Department that the directives were allowed to lapse. This had far-reaching consequences. There was an urgent need to engage more around this matter, particularly around the framework within mines were allowed to function.

Mr Keet responded that this matter was also of major concern to the Department. There were, however, challenges around the Mogale Gold Mine. When this was issued with a directive, it simply stopped cooperating with the Department.

The Chairperson responded that criminal charges should be laid in such circumstances. He added that the Department could not stop issuing directives as a result of the response of one mine.

Mr S Huang (ANC) asked which law was used and what standards were applied in relation to the Department’s actions around ascertaining the legal water quality.

Mr Keet answered that standards were set according to the specific requirements of each catchment. The Reserve dealt with basic use of water, for both human consumption and the ecology, in terms of both quality and quantity.
  
Mr Morgan asked whether any water was being pumped from the Aurora Mine into Blesbokspruit. He asked about the status of the proposed investigations into this mine, particularly since there had been recent media reports around the windfall garnered by its owners as a result of a secret sale of gold.
He also asked if the liquidators would be engaging with future owners around the significant possible liability for treatment of mine water.

Mr Keet answered that there was currently no risk, as there was no pumping of mine water. Although he was unaware of the current state of the proposed investigations, he noted that the Department would have a strong case against this mine if gold was recovered from it.

Another Departmental representative added that the matter was currently sub judice and a formalised charge sheet had been prepared, in which cases were being brought against six individuals.
 
Trans Caledon Tunnel Authority (TCTA) briefing
Mr Johan Claasens, Executive Manager: Project Management and Implementation, TCTA, said that the philosophy adopted when designing this project anticipated an estimated design lifespan of between 30 and 50 years, as a result of the use of concrete structures. High-quality submersible pumps and pipe-work had a 30-year lifespan and was also low maintenance. The short-term solution was also to serve as the first phase of the long-term solution. The long-term solution was taken into account when selecting the sites.

He then outlined the plans for implementation of the long-term technical solutions in the Western Basin. The upgrade to the Rand Uranium plant would cater for up to 36 megalitres (Ml) per day. An implementation agreement had been entered into with Rand Uranium and the target date set for this was November 2011. Treated water would be discharged into Tweelopiespruit. Under the short-term solution for this area, and new High Density Sludge (HDS) plant would be erected on the Randfontein Estate East, with a capacity of 25 to 30 Ml per day. There would also be an installation of new pumps and pipe work in Rand Uranium Shaft 8. Treated water would be transferred by pipeline to Tweelopiespruit.

In the Central basin, the technical solutions included a new HDS plant next to the South West Vertical Shaft, with a capacity of 80 Ml per day. Pumps would also be sourced from CRG Ritz, at possibly no cost. Treated water would be transferred to Eslburgspruit.

The technical solutions for the Eastern Basin would install a new HDS plant next to Grootvlei No 3 shaft with a capacity of 110 ML per day, with treated water transferred to Blesbokspruit. Sludge co-disposal would be at Daggafontein tailings storage facility via duel lines. The commissioning date for this was set at June 2014.

He then noted that the issuing of tenders should happen in mid-September 2011, while the commissioning of the immediate solution for the Western Basin was set for November 2011. Construction was set to start in January 2012 and project commissioning for August 2012. The project was due to close out in December 2012. The annual cost budget for operations and maintenance was estimated at R385 million per annum. In order to minimise the risks posed by severely limited timeframes, procurement processed would be optimised and approvals accelerated, while a communication strategy and public participation would be employed in order to reduce reputational risk. The long-term solution would be accelerated in order to reduce risks around environmental degradation.

Discussion 
The Chairperson asked how public-private partnerships (PPP) featured in the plan.

Mr Claassens answered that this was a crucial aspect and was still subject to a feasibility study. It was also critical to advance the long-term solution in order to create a product that was of high value and could be sold.

The Chairperson asked whether the solutions proposed meant that the State would bear the costs up to the ‘grey water’ stage.

Mr Claassens answered that this was the case, although the end product would be sold so as to recover costs of both the desalination plant as well as that of the treatment facilities. This was also, however, dependent on the institutional arrangements.

The Chairperson said that this cost recovery aspect was an important one which should enjoy greater emphasis, particularly as doing this would ensure greater and broader buy-in.
Mr Morgan asked about the justification for the installation of new pumps at the Grootvlei No 3 shaft. He wondered why the sludge was to be disposed of at the West Wits Pit and not into the mine void.

Mr Claassens answered that the existing facilities here were found, after inspection, to be no longer useful. The risk in relying on this infrastructure was therefore found to be too high. The pit was being sealed and the issue was being dealt with in accordance with directives issued. The possible additional risk was concerned with possible additional costs to jointly rehabilitate this site once the pit was full.

Mr Morgan wanted to know how the Department was securing the pumps from CRG Ritz at no cost.

Mr Claassens responded that CRG Ritz was not donating the pumps but was, instead, following a previous agreement, doing this in lieu of a capital contribution on their part.

Mr Morgan asked about the administrative costs of this plan.

Mr Claassens said that administrative costs were made up of staff costs, actual time spent and actual costs, such as travel and accommodation.  

Mr Morgan asked if there were risks associated with the November deadline for the West Rand pump.

Mr Morgan wanted to know what would be done to help downstream water users who might be using this water and, in particular, if they would be catered for through alternative water sources. He asked about the costs of diverting water courses and who was to carry those costs.

Mr Claassens said that if there was surplus capacity in the system, water could be released. If not, there could be problems. The Lesotho Highlands Water Project would be built, but he noted that unless the illegal use of water was dealt with, there was likely to be a shortfall in the Vaal system. However, though this plan, water users could potentially save between R7 and R10 billion. The impact on downstream users was being looked into, and the costs might need to be included in the implementation costs.

Mr Morgan asked why there was a difference between the basins, noting that the State appeared to be effectively subsidising certain mines.

Mr Claassens answered that this was indeed a difficult issue to deal with, although TCTA and the Department were in negotiation with the liquidators on this point. They should be able to provide the Committee with an answer within the coming months. There would also be negotiation with the new owners around this.

Mr Huang asked why the maintenance costs on bigger basins were smaller than those of smaller basins.

Mr Claassens answered that this was largely dependent on the water quality, as poorer water quality required the use of more chemicals.
 
The Chairperson said it was vital that a feasibility study into the long-term solutions must be conducted.  

Presentation by Mintek
Dr Roger Paul, General Manager: Business Development, Mintek, said that although technology to treat AMD was available from overseas, the cost of this were typically two to three times the cost of potable water. For this reason it was not economically viable. Locally produced technology was required, as this would be cheaper to build and operate.

He then explained that the mainstream Savmin process consisted of three sequential treatment steps involving neutralisation, metal removal and gypsum crystallisation, selective sulphite removal by ettringite precipitation and softening and pH adjustment by re-carbonation. The Savmin process had been tested at laboratories, as well as at a pilot plant. Preliminary economic evaluations indicated that Savmin had the potential to reduce the cost of treating AMD.

He suggested that in years one and two of the project, the requested funding would be used for technical improvement to the Savmin process and the construction of a small demonstration plant. MSc degree students would be used, and plant design engineers and operators would gain valuable industrial experience during the operation of the plant. The data generated would also be utilised to generate a techno-economic model for Savmin which could, in turn, be used to estimate the capital and operating expenses for various sizes of plants in different locations. Each waste water treatment plant built would create new jobs, as it would require operators, engineers and maintenance staff to keep the plant running.

Discussion
Mr Morgan asked what relationship, if any, Mintek had with the DWA.

Dr Paul answered that it reported directly to the Department of Mineral Resources and also had a representative on the Inter-Ministerial Committee on Acid Mine Drainage, but had no formal relationship with the Department of Water Affairs.

Mr Morgan asked to what extent Mintek thought that there might be foreign buyers.

Dr Paul answered that Mintek foresaw significant future sales. It was, for example, currently in talks with a French company - with whom it had signed a Memorandum of Understanding - around making the technology more cost effective. The progress made over the following two years would dictate whether or not the Memorandum of Understanding would be taken further.

After the lunch break, Dr Paul noted that he had met with Mr Claassens during the lunch break and clarified certain items on which he had earlier expressed concern.

The Chairperson reminded Mr Claassens that some pages of the document still needed to be forwarded to the Committee, and a review was needed of the guiding framework and principles.

The Chairperson also indicated the need for DWA to conduct feasibility and due diligence studies, to allow Cabinet to weigh the options.

The Chairperson said to Mr Keet, in respect of the directives, that he wanted to talk to the Director General to discuss future plans. He proposed the reintroduction of directives in order to keep the mining companies accountable.

The Chairperson highlighted the need for the Department to hold extensive consultation with and clarify the roles in respect of the WUC, to avoid the Department being involved in future legal problems. The response earlier by the DWA did indicate that some oversight was being effected. He noted the background to WUC, noting that mining companies established the Western Based Environment Cooperation (WBEC), and later the WUC was then established and charged with the responsibility of managing WBEC’S liabilities. It was important to note that WUC existed prior to the directive, and was given functions in which it spent millions of rands in carrying out.

The Chairperson asked DWA to present a further progress report towards the end of the year after it had made a presentation to Cabinet.

The Chairperson asked all Members to attend the Conference of Parties (COP) conference to be held in Durban.

The Chairperson asked Mr Petrus Matji, Director of Public Finance, National Treasury, to comment on the presentations.

Mr Matji said National Treasury was waiting for a response to recommendations made to have the programme registered as a Public Private Partnership (PPP).  He commented that the costing of the project by TCTA was not transparent and needed to be revisited. For example, contributions by Central Rand Gold (CRG) of about R30 to 35million were not reflected in the costing mentioned. He also noted the need to address the high fees and administration costs of the project, which constituted 43% of the total budget.

The Chairperson reiterated the points made by Mr Matji and said that beyond the technical details given in the presentations, the underlying point made was the need for DWA to be transparent and bring along the various stakeholders involved, including the Council for Scientific and Industrial Research (CSIR), Water Research Commission (WRC), Mintek and other government departments.  This would be imperative as the project expanded and costs increased, as it would facilitate all stakeholders moving in the same direction and avoiding delays in implementation.

Mr Keet reminded the Committee of a previous stakeholder participation meeting held on 8 September 2010, in which a team of experts, which included Mintek, CSIR and the Universities, met and made joint decisions that were part of the document presented to Cabinet.

The Chairperson said that there was no need for DWA to be defensive. He had simply said there was need for a continuous ongoing consultative process as new plans and options had since been drawn up.

The Chairperson noted that the current proposal, initiated in January to run to the end of the project, had the unintended outcome that mining companies relinquished all responsibility over management of AMD to Government, except in one or two exceptional cases where the mining companies were made to pay a third of the costs.

Mr G Morgan (ANC) asked for feedback of the PPP letter and reasons as to why there had been no response.

Mr Keet noted that he would follow this up with top management.

The Chairperson added to Mr Morgan’s question by noting that the whole long term solution depended on the creation of a PPP programme, to ensure that costs of the management of AMD could be shared between Government and mining companies. Therefore the only remaining question was whether Cabinet wanted to adopt this principle. He said that there was a need to be absolutely clear when giving recommendations to government on options, either through the TCTA model or the PPP option, and to spell out all the implications and consequences. The Department had to hold joint consultations with all other stakeholders to ensure that it came up with the best possible solutions.

The Chairperson added that another unforeseen implication of the current proposal could be that directives could not be given, as Government could have sole responsibility for cleaning up the Water Basins.

Dr S Kalyan (DA) asked for the report made at the Millennium Development Goals (MDGs) workshop to be made available to the Committee.

The Chairperson replied that the report would be circulated shortly.

Mr Morgan said the White Paper on Climate Change had been released and the Committee should get this also.

The Chairperson replied that he could discuss the matter with the Minister. An arrangement could also be made to have a presentation to the Committee.

The Chairperson, in his closing statement, stressed to the media present that what had been discussed during the meeting were recommendations, and not directives to the DWA.

The meeting was adjourned.


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