For many mining companies, water shortage is a principal risk, not only for those located in resource-scarce areas that have to protect the little they have.
This is also true for companies with excess water challenges that require innovative solutions to manage this water risks both pre and post closure. CHANTELLE KOTZE spoke to Johannesburg-based law firm Warburton Attorneys managing partner CATHERINE WARBURTON on the importance of managing the residual and latent risks that mine water can pose during and after mine closure.
We are moving into a phase in South Africa in which many mines are nearing the end of their lives, where mine closure is becoming of critical importance.
The main acts of application that relate to on-going liabilities for mine closure are the National Environmental Management Act (NEMA), the Mineral and Petroleum Resources Development Act (MPRDA) and the National Water Act.
Section 43(1) of the MPRDA states that:
“The holder of a prospecting right, mining right, retention permit or mining permit remains responsible for any environmental liability, pollution, ecological degradation, the pumping of extraneous water, compliance to the conditions of the environmental authorisation and the management and sustainable closure thereof, until the Minister has issued a closer certificate in terms of this Act to the holder or owner concerned.”
Section 35(5) of the MPRDA states that:
“No closure certificate may be issued unless the Chief Inspector and each government department charged with the administration of any law which relates to an matter affecting the environment have confirmed in writing that the provisions pertaining to health and safety and management of pollution to water resources, the pumping and treatment of extraneous water and compliance to the conditions of the environmental authorisation have been addressed.”
Section 24(R)(1) of NEMA says:
“The holder remains responsible for any environmental liability, pollution or ecological degradation, the pumping and treatment of polluted or extraneous water, the management and sustainable closure thereof notwithstanding the issuing of a closure certificate by the Minister responsible for mineral resources.”
While some may believe these sections of the MPRDA and NEMA are in conflict with one another and do not clearly state where the liability ends, Warburton says that Section 24(R)(1) of NEMA now makes it very clear that notwithstanding the issue of a closure certificate, which is in itself an unusual occurrence, these liabilities and responsibilities persist post closure – despite the perception in the mining industry in the past that once issued with a mine closure certificate, one was no longer responsible for any additional liability thereafter.
“These two sections can and should be read together in a way that gives effect to both pieces of legislation,” Warburton advises, noting that when read together, it is clear that the holder is responsible for these liabilities both pre and post closure despite the issue of a closure certificate, which may lead to the risk of potentially limitless liability.
Having said this, Warburton believes that there are amendments required to bring the MPRDA into line with the new requirements of NEMA, particularly in the case of closure, noting several inconsistencies between the MPRDA and NEMA when dealing with mine closure.
Moreover, in tandem with these sections in the MPRDA and NEMA, which deal with on-going liabilities, including those responsibilities relating to water, one also has to also note the wide ranging duty of care provisions in Section 19 of the National Water Act (NWA), which specifically refers to the pollution of water, and Section 28 of the NEMA, which applies to any significant environmental degradation, says Warburton.
“These two sections impose duties to take reasonable measures to prevent pollution in any event, and are applicable to historical pollution, that may have occurred before NEMA commenced.
“This duty of care provision applies even in the event that the duty of care responsibility may have been assigned to another party. In such case, the holder of the mining right may still be held liable in terms of the duty of care provision,” Warburton notes.
Meanwhile, the Financial Provisioning Regulations, within NEMA, which stipulate the manner in which mining right holders and mining permit holders must provide for and then conduct rehabilitation of the environmental impacts incurred by their activities, are very clear in how to properly assess residual and latent risks and make financial provision for them.
A crucial consideration for mining companies in preparation of closure is to accurately cost these risks in order to make sufficient provision and start planning for the management of the risks prior to closure.
Warburton says that whilst many mining companies have made a concerted effort to understand and plan for the Financial Provisioning Regulations coming into effect, it remains a challenge for certain mines in the tough economic climate, compounded currently by labour issues, which may have made putting aside sufficient funding in terms of the new financial regulations a difficult task that may take longer than anticipated.
Warburton highlights the success of Anglo American’s eMalahleni water reclamation plant, a project commissioned in 2007 to mitigate excess water risks at its operation.
The plant treats mine water to produce potable water, returning on average 16 Mℓ/day to the eMalahleni municipality. The project exemplifies how an environmental liability – mine water – can be transformed into an asset with benefits for the local community, while also mitigating the company’s post-closure liabilities.
One of the reasons Anglo American has been as successful as it has in establishing the water reclamation plant has been because it initiated the project during the operational life of the mine, Warburton notes.
“It is often difficult to establish a treatment plant when the mine has already closed, from a capital and regulatory point of view as these projects require upfront capital and require authorisation and commitment from a host of government departments,” she explains.
Consequently, the forward planning required for successful and sustainable mine closure and post-closure water management is crucial and is a process that should start at the earliest stage in the mine’s life and progress as the mine proceeds along its life cycle, says Warburton.
Often because of the interconnectedness of mines and several stakeholders involved – a solution that takes into consideration all stakeholders and their possible contribution to the solution should be considered, most often to the benefit of the post closure solution rather than to its detriment.
In order to ensure feasible and sustainable mine closure, Warburton calls on government to be more proactive in terms of its intergovernmental participation and consultation on the challenges concerning the regulatory requirements and to develop strategies to facilitate mine closure.
Certain of the issues that mining companies face during closure require regulatory intervention in order to broker a feasible and sustainable solutions, rather than companies abandoning their responsibilities – to the detriment of those companies trying to lawfully implement practical and sustainable solutions.