The extraction of minerals from the ground and the corresponding negative environmental impact on the surface involve a complex balancing act that the mining industry seeks to maintain, says sustainability law firm Warburton Gunn Attorneys partner Adam Gunn.

He notes that, legally, JSE-listed companies are required by the JSE Listings Requirements to comply with the King Code of Governance Principles (King III), which requires an integrated report to be produced for any financial year starting after March 1, 2010, which goes some way towards maintaining this balance.

“Mining sustainability reporting has some inherent contradictions, however, in that the minerals extracted are a nonrenewable resource. Mining operations do not function like an ecosystem, where the natural life cycle recycles nutrients. A mining operation is simply designed to make money by operating until there are no more minerals to extract from the ground,” Gunn explains.

“Nonetheless, the point of issuing an integrated sustainability report is to highlight and assist companies in improving their environmental efficiency levels,” he explains.

Meanwhile, Gunn says that penalties for not complying with sustainability requirements in terms of the Mineral and Petroleum Resources Development Act (MPRDA) No 28 of 2002, the National Environmental Management Act (Nema) No 107 of 1998, the National Water Act (NWA) No 36 of 1998, and the Mine Health and Safety Act No 29 of 1996 can be signifi- cant in terms of monetary fines levied for violations. In extreme cases, mining licences can be suspended or even revoked if firms are found to be in contravention of any or all of the Acts.

“South Africa, however, possesses sufficient legislation concerning sustainable mining practices,” he acknowledges, although the legis- lation is not always enforced as strongly as it should be.

“An example of the lack of enforcement can been seen in the many mines operating without water licences, which are required by law to operate legally,” explains Gunn.

He notes, however, that mines operating without the required water licences could be as a result of the Department of Water Affairs (DWA) not granting the licences timeously, even after the mines have filed water licence applications.

Gunn refers to the dispute involving LSE- and JSE-listed gold miner Central Rand Gold (CRG) in September 2011, when CRG was informed that it might be forced to halt opera- tions after it had received a Section 47 Directive from the Department of Mineral Resources (DMR), based on the violation of two conditions relating to the company’s mining work programme and social labour plan.

DWA senior regional manager Marius Keet told the local media in December 2012 that CRG’s closure jeopardised the department’s only viable strategy to deal with rising acid mine drainage levels in the Witwatersrand Central basin, as the CRG was the area’s sole remaining underground operator.
CRG later agreed, in conjunction with State-appointed project manager Trans-Caledon Tunnel Authority, to use its pumps to dewater and maintain the Central basin.

The DMR and CRG found mutual ground and a lengthy court battle was avoided.

Gunn also cites two cases in which communities in Mpumalanga successfully opposed new coal mining operations.

Coal miner Anker Coal was found guilty of wrongfully and negligently committing an act which was likely to cause significant degradation of the environment when it drilled prospecting holes in a sensitive area, consisting of riverbanks, a riverbed and a wetland near the Steenkoolspruit farm, in the Nkangala district municipality, in Mpumalanga.

The other case involved Golfview Mining, which was fined for mining in a wetland in 2009; diverting the Holbankspruit river, in Mpumalanga, and a tributary; inadequate on-site pollution control and failing to control the evaporation levels of dams; failing to sepa- rate dirty water from clean water; and constructing a washing bay on a downslope to the Holbankspruit river.

The company had also dumped rocks in the river, constructed offices within the ten-year flood line, built canals and damaged three hectares of indigenous vegetation.

MPRDA Uncertainty

Meanwhile, Gunn says that several newly proposed amendments to the MPRDA present challenges.

He explains that companies and interested parties need to be aware of the sections that have recently came into effect and those that have not and then to read them in conjunction with Nema. The intention is to transfer the environmental regulation sections of the MPRDA to Nema and, as such, the MPRDA will require mining activities starting after December 7, 2014, to be in possession of an “environmental authorisation” issued under Nema by the DMR.

He notes that previously the Department of Environmental Affairs and Tourism issued ‘environmental authorisations’ under Nema.

“The intention was to simplify the environmental permitting regime applicable to mining activities but it may have had the opposite effect,” he suggests.

Further, Gunn points out that companies have to take into account the MPRDA Amend- ment Bill of 2013.

“It becomes incredibly complex and creates more uncertainty for businesses, which need to adapt their business models accordingly,” he says, adding that the levels of uncertainty are manifold, as the industry seeks clarity in terms of policy.

Meanwhile, he cautions that the DMR, in terms of the MPRDA, has the authority to issue a mining company with a directive to change or improve certain aspects of the mine’s operations.

“Usually, this will involve a mining company’s mine works programme, where it has underperformed in terms of the ton- nages it undertook to produce; a mining company not complying with its social labour plan; or a company not complying with environmental laws. If the company complies, the directive will usually be withdrawn,” states Gunn.

Seeking Stability

Government, business and labour recently agreed to ratify a draft document on ensuring sustainable mining in South Africa.

Government, organised labour and business also committed to continue meeting quarterly over a 12-month period or as frequently as required, under the leadership of Deputy President Kgalema Motlanthe, to ensure common action to address blockages and new issues, should they arise.

Gunn emphasises that the ongoing Farlam Commission of Inquiry into the Marikana tragedy, which is chaired by retired judge Ian Farlam, will be crucial in ensuring long-term stability in the mining sector.