The call for transparency by the CER focuses in particular on Anglo’s plans, as announced by the company on 16 February 2016, to sell off its South African coal and iron ore assets, and public participation in the transfer of any of its mining rights.
The CER addressed the letter in the context of the woeful legacy of unrehabilitated mining operations in South Africa, and the common trend for large companies to transfer mining rights to smaller companies which cannot comply with the rehabilitation obligations attached to the rights.
Anglo American was one of the companies assessed by the CER in its September 2015 report, titled: Full Disclosure: The Truth about Corporate Environmental Compliance in South Africa. Full Disclosure revealed that over the period assessed (2008-2014), many of South Africa’s biggest listed companies, praised for their “socially responsible” credentials, had in fact committed serious breaches of environmental laws, and that the level of disclosure of these breaches to shareholders was in most cases extremely poor. [quote]
In relation to Anglo American, Full Disclosure raised concerns regarding the paucity of data on the company’s environmental non-compliances and incidents available to its shareholders. We also noted that what little information was provided raises serious concerns, in particular in relation to unauthorised water discharges and other water contamination.
CER notes that because of the significant environmental impacts of Anglo American’s mining operations, the the organisation has called on Anglo American to inform it – and the public – of the company’s plans for public participation in relation to the various sales forming part of its restructuring in South Africa, and to undertake to publish on its website copies of the documents relating to these sales and transfers.
Asset disposal trend
South Africa has seen a trend of larger mining companies selling mines, usually with significant environmental liabilities, to smaller mining companies after most of the reserve has been exhausted. The trend sees these smaller companies going insolvent shortly after the sale – before any of the prescribed rehabilitation of environmental damage has taken place.
Environmental disasters seen in the Pamodzi and Blyvooruitzicht cases (as detailed in the CER’s open letter) serve as stark reminders of the importance of transparency and public participation in the sale of mining rights, CER says.
“Transparency and public participation in this process are imperative to ensure that the environmental liabilities of these operations are not in due course added to the burden of the 6 000 derelict and ownerless mines already borne by the South African public. The cost of closing these mines and treating polluted water has been estimated at close to R60 billion,” the CER said in a statement.
Anglo American acknowledged receipt of the CER’s letter on 1 March 2016 and has indicated that it is preparing a response to the letter.