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Huge impact of subtle law changes on mining and oil & gas industries

Analysis of proposed change to financial provisioning laws

Financial provisioning laws require mining and petroleum companies to set aside an amount of money for the management, remediation and rehabilitation of environmental aspects arising from mining and petroleum operations. Financial provisioning is a legislative attempt to promote a greener and healthier environment by holding mining and petroleum companies responsible for the rehabilitation of the environment impacted by their operations. For example, when applying for a mining right, a mining company is required to indicate the manner in which they are going to rehabilitate their mining area after the mine is closed and set aside an amount of money for this rehabilitation, before the Department of Mineral Resources (DMR) will grant a mining right.

History of financial provisioning

Financial provisioning and rehabilitation was initially regulated under section 41 of the Mineral and Petroleum Resources Act, 2002 (MPRDA) which required an applicant for a right or permit to make prescribed financial provision for the rehabilitation or management of negative environmental impacts associated with the operation. The quantum of the financial provision was determined in accordance with Regulation 53 and 54 of the MPRDA Regulations, 2004 (“MPRDA Regulations“) and the guideline document provided by the DMR. These provisions have now been superseded by the Financial Provisioning Regulations published under Government Notice Regulation 1147 in Government Gazette 39425 on 20 November 2015 (“Financial Provisioning Regulations“), in terms of section 24P of the National Environmental Management Act, 1998 (NEMA).

The NEMA provisions and Financial Provisioning Regulations are in line with the move towards the ‘One Environmental System’ which looks to transfer environmental governance of the mining and petroleum industries from the MPRDA to the NEMA. The Financial Provisioning Regulations are more onerous than the previous financial provisions under the MPRDA. The Financial Provisioning Regulations came into effect on 20 November 2015, but the transitional provisions (as amended) indicate that existing holders of mining rights will only need to comply with the Financial Provisioning Regulations by 19 February 2019.

Under the MPRDA, financial provisioning was required to take the following into account: costs for the rehabilitation of the surface area of operations; costs for the decommissioning and final closure of the operation and post-closure management of residual and latent environmental impacts. These requirements provided for a broad description of the types of rehabilitation and remediation that were to take place. However, no detail was provided as to exactly what this would entail or what closure standards should be achieved. Under the Financial Provisioning Regulations, there is more certainty surrounding what should be considered as part of a mines financial provisioning. The Financial Provisioning Regulations now require the holder of a right / permit to ensure that an Annual Rehabilitation Plan, an Environmental Risk Assessment Report and a Final Rehabilitation, Decommissioning and Mine Closure Plan, as set out in the Financial Provisioning Regulations, (the Three Plans) are undertaken and submitted prior to the right being granted. The Three Plans require specific actions for annual and progressive concurrent rehabilitation to take place.

NEMA Bill, 2017 and financial provisioning

Similar to the provisions of the MPRDA, section 24P(3)(a) of NEMA requires the holder of a right / permit to perform an annual review of their environmental liabilities and increase their financial provisioning accordingly. The National Environmental Management Laws Amendment Bill, 2017 was published under Government Notice 245 in Government Gazette 40733 on 31 March 2017 (the NEMLA Bill) and was tabled in Parliament on 24 May 2017. The NEMLA Bill introduces a significant proposed change in relation to financial provisioning and the required annual assessments of same.

The NEMLA Bill looks to amend section 24P(3)(a) of NEMA to read that the holders must “..annually assess his or her environmental liability in a prescribed manner and must adjust his or her financial provision accordingly…” This change brings section 24P(3)(a) in line with Regulation 11(2) of the Financial Provisioning Regulations which already provides for an annual adjustment of financial provisioning as opposed to a forced increase, which has previously been required under the MPRDA and NEMA.

This change from “increase” to “adjust” is very significant for the mining and petroleum industries and may present a number of opportunities that allow for operations to decrease their financial provisioning over the life of the operation, instead of unnecessarily having to increase it for no reason other than avoiding contravening the financial provisioning legislation.

New opportunities for the mining industry

The Financial Provisioning Regulations are more onerous than previous financial provisioning requirements, because they stipulate a comprehensive minimum content for each of the Three Plans to inform the quantum of financial provisioning. This itemised and detailed approach to financial provisioning presents as an extra cost for the mining and petroleum industries, however, it also allows for adjustments to the mine’s financial provisioning to be made based on the mine’s actual operational requirements. Furthermore, it ensures that the on-going annual rehabilitation that is required to take place as per the Annual Rehabilitation Plan will be taken into account and the financial provisioning can be adjusted and decreased accordingly.

The change proposed to be implemented by the NEMLA Bill presents an opportunity for mining and petroleum companies to decrease their rehabilitation liability by implementing effective and innovative mechanisms that promote rehabilitation and remediation throughout the life of operations and not only at the closure of the operation. This on-going remediation and rehabilitation will result in a reduced financial provision being required at the closure of the operation. Initiatives such as captive power and captive water should accordingly become more appealing to mining and petroleum operations.

A captive power plant is a power generation facility that allows for an industrial or commercial energy user to produce its own electricity. Captive power presents an opportunity to the mining and petroleum industries by putting them in a position to produce their own power. Electricity generally amounts to up to 40% of a mines annual budget. A captive power facility would alleviate the dependence on the grid and studies show that over time, the cost of captive power will be at parity with grid power. In addition to this commercial benefit, laying out the capital cost for such a plant during the operational phase of an operation will reduce the liability of the closure phase as the plant can continue to supply power to the operation well into the closure and post-closure stages. It is believed that by establishing a captive power plant, an operation could adjust and decrease its rehabilitation provisioning over time.

Captive water is a similar concept to captive power, in that it presents an opportunity to create a cost-effective, reliable and high quality supply of water to an operation. Captive water introduces the idea of an operation constructing an internal treatment facility. This entails dirty water produced during operations being recycled and treated on-site to be re-used by the operation. For operations which anticipate having to pump and treat water well into the closure phases of their life, a captive water solution will be particularly attracted to reduce the rehabilitation costs associated with this latent or residual environmental risk.

Both captive power and captive water solutions could be pursued on either an EPC or an Independent Power/Water Producer basis.

Conclusion

Initiatives such as captive power and captive water are not only beneficial for the environment, but they are also perfectly positioned to take advantage of the opportunity presented by the proposed amendment in the NEMLA Bill, which provides operations with the ability to decrease financial provisioning, as they assist in necessitating lower rehabilitation costs for a mine. This proposed amendment should be welcomed by the mining and petroleum industries as it presents an opportunity to implement numerous initiatives that may reduce their financial provisioning over time.

By Hillary Botha (Candidate Attorney), Tamzyn Cooper (Associate) and settled by Garyn Rapson (Partner) of Webber Wentzel

Along South Africa’s East Coast, Locals Take On Mining Industry

A 14-mile stretch of sand dunes along South Africa’s breathtaking east coast is the battleground between big mining interests and the local community. The dunes hide a wealth of titanium.

ROBERT SIEGEL, HOST:

Mining is a mainstay of South Africa’s economy. It’s also been a curse, claiming lives and spoiling the environment. An Australian mining company has been trying to get a license to dig an open pit mine on the country’s remote east coast. The locals, or the Amadiba people, have been fighting against it for a decade. Sarah Birnbaum has the story of a traditional community willing to die to keep its land.

UNIDENTIFIED CROWD: (Singing in foreign language).

SARAH BIRNBAUM, BYLINE: Bazooka Radebe campaigned fiercely to stop the Australian mining company MRC from mining on his people’s land. In March, he was gunned down by men dressed as police officers. Thousands of people from across the country have made their way over dirt roads to the funeral on Radebe’s homestead. Pallbearers weave through the crowd carrying his casket while members of his church sing funeral dirges in Xhosa.

Nonhle Mbthuma was in the anti-mining activist group, the Amadiba Crisis Committee, with Radebe. She looks tired and shaken. She says Radebe called her an hour before he died to tell her that his name was on top of a hit list and she was number two.

NONHLE MBTHUMA: When I speak to him he said, hey, guys, our struggle is bigger than we thought. Now, Nonhle, you need to watch your back.

BIRNBAUM: Violence against anti-mining activists in the Amadiba area has been ramping up. In 2003, headman Mandoda Ndovela was murdered after speaking out against the mine. In December, community members who opposed the mine were beaten with clubs and bush knives. Mbthuma says she and her community will die to protect the land.

MBTHUMA: It’s our mother Earth to us. It’s holding us. If we let the land go, that means we lose the identity, the roots, because where you don’t have a land, you don’t even know who you are.

BIRNBAUM: At stake is 14 miles of sand dunes on what’s called the wild coast, a stunningly beautiful stretch along South Africa’s Eastern Cape.

(SOUNDBITE OF RUSHING WATER)

BIRNBAUM: The mining company MRC says underneath the sand is one of the world’s largest deposits of titanium. The company has applied for mining rights from the government. The project will require digging a huge pit mine and building infrastructure like roads, pipelines, storage facilities and electricity pylons up and down this unspoiled area.

Now, there’s the ocean, sand dunes and grassy hills with clusters of huts here and there. There are a few paved roads, no running water, no electricity. It’s the tribal land of about 300 or so families. They say the mining development threatens to destroy their way of life and undermine their livelihood, which revolves around subsistence farming. Nonhle Mbthuma.

MBTHUMA: We use land for everything – for farming, livestock, buried people. Everything.

BIRNBAUM: She says the Amadiba have been defending this land against outside development for generations. In the 1960s, when the apartheid government tried to group the scattered homesteads here into villages, fence off the grazing land and arable plots and impose quotas on livestock, the community revolted in what’s known in history books as the Pondo revolt. Mbthuma sees her fight against mining as a continuation of that anti-apartheid struggle.

MBTHUMA: My own grandfather, he was involved during the Pondo revolt. Now, I’m still following the steps of my forefathers.

BIRNBAUM: The CEO of the mining company, Mark Caruso, has refused NPR’s requests for interviews, but he briefly appeared of South Africa’s Talk Radio 702. He says the company is not involved at all in intimidation of activists or in the murder of Bazooka Radebe.

(SOUNDBITE OF ARCHIVED RECORDING)

MARK CARUSO: The company has continued to support non-confrontation. It has continued to act within the law and with restraint in relation to inciting any further violence.

BIRNBAUM: Caruso insists the majority of the community wants the mining because it will deliver over 600 jobs. The application for mineral rights is still pending, and the Department of Mineral Resources says it’s not prepared to take a position yet. But protesters like Mbthuma say they’ll keep fighting no matter what. For NPR News, I’m Sarah Birnbaum in Mdtaya, Eastern Cape, South Africa.

Source: npr


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S. Africa Mines Dispute Extended by Empowerment Case Delay

A South African judge postponed a case on whether mining companies are compelled to permanently ensure their assets are at least 26 percent black owned, heightening uncertainty in an industry that accounts for almost half of South Africa’s exports.

High Court Judge Pierre Rabie reserved judgment in Pretoria on whether Malan Scholes Inc., a Johannesburg law firm, will be allowed to consolidate its case with that of the Chamber of Mines, which has taken the Department of Mineral Resources to court. Malan Scholes wants the Mining Charter, which includes the empowerment clause, declared unconstitutional.

The chamber “does not want to see the charter destroyed,” said Chris Loxton, senior counsel for the mining group. “Scholes wants to put it to the sword,” which will create a conflict between the two groups, he said.

The case pits the need to decrease racial inequality 22 years after the end of apartheid against shareholder rights as the DMR’s clause would increase shareholder dilution. South Africa’s push for increased black ownership of the mining industry is part of an effort to address the legacy of whites only rule that deprived the black majority of economic opportunities.

The chamber planned on presenting its arguments about the issue of black shareholding on Tuesday, Roger Baxter, the chief executive officer of the chamber, said after court proceedings.

“The delay is obviously something that does affect us,” Baxter said. “This is a critically important issue and our focus is on resolving the issue around uncertainty.”

Irrelevant findings

The chamber brought the case against the Department of Mineral Resources by mutual agreement after the two parties couldn’t agree in negotiations on whether the DMR’s 2010 addition to the charter that the empowerment requirement was permanent was legally enforceable. The two sides have been in dispute over that clause for six years.

 Malan Scholes seeks a consolidation of the cases because a ruling in its favor “could make a lot of the findings in the chamber application” irrelevant, Leon Bekker, senior counsel for the law firm, said in court. “If the charter is taken away,” then the relief that the chamber is looking for won’t be necessary.

The Centre for Applied Legal Studies, a legal group based at Johannesburg’s University of the Witwatersrand, was admitted to the case as an amicus, or friend of the court as it argues that Scholes’ position is not transformative.

“CALS intervenes in the public interest and in pursuit of its objectives to highlight the importance of transformation in the extractive industry which it deems a constitutional imperative,” said Nomonde Nyembe, an attorney for the organization.

Serudomo SA Rona, a community-based organization, was also admitted as an amicus. It is represented by the Legal Resources Centre and supports the DMR’s viewpoint.

South Africa is the world’s biggest producer of platinum and manganese and Africa’s biggest coal, chrome and gold producer. The world’s three biggest platinum companies are based in the country and Glencore Plc, South32 Ltd. and Anglo American Plc have assets in the country.

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Source: bloomberg


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Water in Mining 2016 will cover water sustainability issues in mining.

The 5th International Congress on Water Management in Mining, Water in Mining 2016, creates a space to identify trends, better practices, methodologies and technologies that are used in the water management in mining.

November 13 2015

The 5th International Congress on Water Management in Mining, Water in Mining 2016, that will take place from May 18-20 in the Hotel Grand Hyatt, Santiago, Chile, will focus on the development of a much more sustainable water management in the mining cycle.

The Conference will address topics relating to integral water management throughout the mining life cycle:; desalinization and seawater use; alternative water supply; efficient water use and water recycling; water accounting; mine dewatering; acid rock drainage prediction, prevention and treatment; water footprint and cost-effective water management.

The Executive Committee of Waterinmining 2016, will be preceded by Mauricio Gironás, Concentrator and Port Manager, Candelaria and Ojos del Salado Mines, Lundin Mining; while Neil McIntyre, Director of the Centre for Water in the Minerals Industry, (SMI), The University of Queensland; and Virginia Ciminelli, Director of the National Institute of Science and Technology on Mineral Resources, Water and Biodiversity, INCT-Acqua, Brazil, will participate as Co-chair.

Water in Mining 2016 is organized by the Centre for Water in the Minerals Industry, Sustainable Minerals Institute (CWiMI), University of Queensland; the National Institute of Science and Technology on Mineral Resources, Water and Biodiversity; and Gecamin.

The last version of Water in Mining that took place in 2014, brought together over 440 participants from 21 countries and there were more than 60 presentations.

Source: gecamin


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The Chinese scramble to mine Africa

A more than twenty-five fold jump in investment in fewer than 10 years. That’s how fast China is gaining control over Africa’s mining industry. And Beijing’s push is not ending any time soon. 

China’s growing economy is thirsty for sustainable supplies of mineral resources. Despite beingthe number one mining nation in the world, China is facing a rapid depletion of its local mineral resources. Reserves-to-production (R/P) ratio that represents the “burn rate” of proven reserves of mineral commodities when applying current levels of domestic mine production shows that China is in the “red zone” for future supplies of nearly all crucial minerals (Figure 1).

figure1

Figure 1. R/P (“burn rate”) ratio for China in comparison to world average R/P, years. Sources: compilation of USGS, BP, country and other reports.

In order to overcome shortages of essential mineral commodities, as well as to secure long-term sustainable supplies for its ambitious economic development strategy, the Government of China empowered and encouraged a number of domestic state-owned and private companies to actively pursue mining deals throughout the world.

Since this strategy, also known as “Two Resources, Two Markets”, launched in 2006, Africa quickly  became the most desirable region for China and Hong Kong-based companies hunting for mining deals globally.

The scale of China’s expansion in Africa is just a mind blowing. In less than 10 years since Chinese authorities called for mineral resources diversification globally, the number of major mining/mineral processing assets in Africa with China-headquartered companies interest, increased from only a handful in 2006 to more than one hundred and twenty in 2015 (Figure 2). And those are only assets in advanced stages of their development, i.e. the figures exclude early exploration and other greenfield projects.

figure2

Figure 2. Evolution of major mining/mineral processing assets in Africa with China-based companies’ interest, cumulative numbers. Source: IntelligenceMine.

Keeping in mind that many of China-Africa deals are not always made public, an adjusted number of China-controlled mining assets in Africa could be even more impressive.

From the regional point of view, Chinese companies became firmly anchored to the Southern African countries and now quickly spreading to the north from Equator (Figure 3).

figure3

Figure 3. Countries in Africa, where mining interest of China-based companies exists, evolution from 2006 to 2015. 

A wide variety of corporate entities have contributed to this formidable expansion, including mining, mineral processing, metallurgical, manufacturing, power generation, infrastructure development companies, as well as investment banks, research institutes and even individuals.

The forms of mining deals that China employs in Africa are also very diverse and involve direct investments in mining projects, infrastructure investments–to-mineral resources “trade-in” deals, joint ventures, indirect investments, off-take agreements, options and a variety of other structures.

These examples give some insight into the vast scope of China’s involvement in Africa’s resources and mining industry.

In 2012, China General Nuclear Power Corporation (CGNPC) acquired Husab project in Namibia (Figure 4), which is one of the biggest uranium deposits in the world, and now is finishing construction of a huge uranium mine there. In under three years since earthmoving activities first began at Husab, CGNPC built and is now commissioning the world’s third largest uranium mine.

Another notable project is a massive Kamoa copper deposit located in the Democratic Republic of Congo (DRC), which is recognized as the world’s biggest undeveloped high-grade copper deposit. Zijin Mining Group recently completed a half a billion dollars deal with Ivanhoe Mines that allows Zijin to control this advanced project. No doubt  Zijin, which is not lacking of governmental funds and in-house mining expertise, is going to commission this mine as soon as possible.

figure4

Figure 4. Husab and Kamoa projects location. Source: IntelligenceMine online mapper.

There are a many more world-class mining assets located in Africa acquired by Chinese companies in recent years.

Why has Africa became a priority destination for China? First and foremost, it’s the continent’s rich endowment of mineral resources with many world-class deposits discovered  in recent years. Secondly its untapped mineral resources provides excellent greenfield development potential.

For example:

  • South Africa produces 52% of world’s chromium,  is the world leader in production of manganese and platinum group metals, controlling about 95% of global PGM reserves. It is also the biggest producer of ilmenite, second biggest producer of vanadium and in Top-5 of global rutile and zirconium producers. South Africa is also a renowned producer of gold and controls world’s largest in-situ gold reserves.
  • Democratic Republic of the Congo (DRC) produces approximately 50% of global cobalt and hosts about half of global reserves. DRC is also in top-5 producers of copper, diamond and tantalum (second place).
  • Botswana is the global leader in diamond production by value and in top-5 of other gemstones’ producers.
  • Guinea is in top-5 of biggest bauxite producers, being the world leader in bauxite reserves.
  • Zimbabwe is the fifth biggest producer of lithium and in top-5 of world’s largest PGM producers.
  • Morocco is the second biggest producer of phosphates and controls 75% of global phosphate reserves.
  • Mozambique is in the top-5 global producers of tantalum, ilmenite and zirconium.
  • Rwanda is the leader in production of tantalum.

figure5

Western companies have tended to be more cautious about investing on the continent which is still grappling with serious infrastructure deficiencies, political turmoil, weak institutions and corruption.

Chinese companies have shown greater tolerance for risk and have proven to be adept at navigating political and economic upheaval. Not least because the country’s mining majors enjoy the firm backing of the government in Beijing and the country is able to take a long term strategic view.

In recent years, African countries increased output of nearly all major mineral commodities (except PGMs) as this table shows. With the backing of China, do not expect the pace of development to slow any time soon.

Source: mining


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Tripartite deal to save mining jobs

Johannesburg – The government, mining companies and labour unions adopted a plan yesterday in an attempt to curb job losses in an industry where more than 11 700 people are at risk of losing their employment.

However, the Association of Mineworkers and Construction Union (Amcu) decided against committing to the pact.

The government received notice of plans to cut up to 11 798 jobs, but unions say the figure could be as high as 19 000.

The formation of the pact, which was led by Mineral Resources Minister Ngoako Ramatlhodi, comes as mining houses plan to cut thousands of jobs with commodity prices such as platinum, coal and iron ore having hit long-term lows.

“We recognise that we may not be able to save all the jobs,” Ramatlhodi said.

“That’s why other measures kick in, such as what has been referred to as a government contribution towards retraining and reskilling.”

Crucial sector

The government has been under pressure to intervene in the jobs crisis in the mining sector, which contributes 7 percent of the gross domestic product.

On Sunday, President Jacob Zuma said the “economy is sick” and appealed to business and organised labour to prioritise saving jobs over profits and strikes as the economy faced challenges when he launched unit 6 at Eskom’s new Medupi power station in Limpopo.

DA finance spokesman David Maynier said yesterday that it was “bizarre” given the fact that the government, rather than the private sector, was probably the biggest “binding constraint” on economic growth and job creation in South Africa.

“President Zuma should be supporting the private sector, rather than blaming the private sector for job losses. In order to do so, Zuma should be tackling the fundamental roadblocks to economic growth to boost economic growth and create jobs in South Africa, including policy uncertainty, the energy crisis, inflexible labour laws, failing state-owned enterprises; and over-burdensome red tape regulation,” the DA said.

Ramatlhodi told journalists ahead of the signing of the pact in Pretoria yesterday, that there were potentially 11 798 job cuts in the mining industry, and the agreement was aimed at minimising these retrenchments.

Yet, National Union of Mineworkers (NUM) deputy president Joseph Montisetse, who was also at the meeting, said the industry envisaged retrenching potentially about 19 000 employees.

Lonmin, the world’s third-biggest platinum producer, previously announced it planned to cut 100 000 ounces of production a year which would put 6 000 jobs at risk, while Anglo American said it would divest in 15 assets and about 50 000 jobs in the next three years.

Chamber of Mines deputy president Andile Sangqu said the agreement would go a long way in rebuilding confidence in the struggling industry.

The declaration sounded good on paper, but Ramatlhodi said the signing of the agreement did not mean there would be no moratorium on job cuts.

“We have not used the word moratorium in the agreement. We are saying if there are retrenchments there has to be inclusivity in the process and there must be active participation of all stakeholders. We recognise that we may not be able to save all the jobs,” Ramatlhodi said.

The agreement is still at risk as Amcu, which led a five-month platinum belt strike, has not signed the agreement.

Amcu deputy president Sanele Myeza, who spoke at the meeting yesterday, said the union was behind the process of saving jobs and would first get a mandate from members before committing.

Amcu also did not commit to former deputy president Kgalema Motlanthe’s framework agreement for a sustainable mining industry signed by the industry to rebuild confidence after the Marikana massacre of August 2012.

“We are fully behind the process. Our membership is so large. We have not yet reached out to them,” Myeza said.

The deal comes after a tripartite technical task team identified a 10-point intervention plan and recommendations to save jobs.

Part of the agreement includes the setting up of a development fund to create alternative jobs for thousands of retrenched miners, and facilitating the sale of distressed mines to save jobs.

Source: iol


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Mining companies threaten fragile ecosystems

WAKKERSTROOM, Mpumalanga – The insatiable hunger for mineral resources means mining companies are starting to encroach on more vulnerable ecosystems.

With energy and jobs high on the national agenda, government departments are failing in their environmental mandates.

Mpumalanga’s rural communities are caught in the middle of this political power play, with more than 60 percent of the province mined, or reviewed for possible mining, in the past 15 years.

It took more than five years of consultation and negotiation to have Mabola’s grasslands declared a protected environment.

Eight months later, the Department of Mineral Resources started granting mining licences in the area.

Mining companies may have operating permits, but many don’t have water licences.

Water Minister Nomvula Mokonyane estimates nearly 100 mines aren’t complying.

Conservationists have accused government of sacrificing vital ecology to promote mining.

Catherine Horsfield of The Centre for Environmental Rights said, “Other departments such as the DEA and DWS are under pressure too, and confuse their mandates in the process of water protection, environmental protection with economic development and job creation.

“There is a reluctance to be perceived to be anti-development and anti-job creation.”

The mines are also polluting what little these communities have.

Samson Sibande has invested his life savings in this farm, but a mine on the property is poisoning the water and his animals are dying.

Sibande claims he was promised it would be rehabilitated.

But when he approached the department, he says officials couldn’t track down the company responsible.

Louis Snyman of the Centre for Applied Legal Studies said, “We have a perfect storm that’s arising out of poor capacity within department, with the regulations going straight towards the Department of Mineral Resources.”

The Mpumalanga Tourism and Parks Agency, which oversees biodiversity, says it’s being asked to comment more regularly on applications for mining licences.

The agency is adamant the damage to the environment mustn’t outweigh the benefits of the mines.

Source: enca


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South Africa allocates $1.4bn for mining communities

The South African Government has allocated ZAR18 billion ($1.4bn) in an effort to improve the socio-economic conditions of distressed mining communities across the country.

The money will be spent on housing and wellness projects and will be headed by the Inter-Ministerial Committee (IMC) in charge of revitalising mining communities.

“Overall ZAR18 billion has been dedicated to ongoing work in distressed mining communities, benefitting the following provinces: Eastern Cape; Free State; Gauteng; KwaZulu-Natal; Limpopo; Mpumalanga and North West,” says Jacob Zuma, South African President.

“The bulk of this funding is from government, with mining companies contributing approximately a third of the funding.”

The Marikana tragedy, which claimed the lives of 44 people during labour unrest at the Lonmin mine in the North West town during 2012, prompted Zuma to appoint the committee.

IMC will work with business, labour and other sectors and oversee the implementation of integrated and sustainable human settlements.

It will also work to improve living and working conditions of mine workers and determine the development path of mining towns.

In order to better understand the challenges and determine the appropriate actions to address them in each town, the government has undertaken a socio-economic diagnostic study of the 15 prioritised mining towns and 12 prioritised labour sending areas.

As part of the projects, the Department of Human Settlements is implementing about 66 public sector housing projects in the mining towns.

More than ZAR419m ($34m) was spent on informal settlement upgrading in prioritised mining towns in Limpopo, Free State, Gauteng, Mpumalanga and North West provinces during the 2014/15 financial year.

About ZAR1bn ($81m) has been earmarked for the current financial year.

With regard to the wellbeing of the miners, the Department of Health, together with the Departments of Labour and Mineral Resources, is working towards the alignment of the industry’s occupational health and safety policy.

“The Department of Mineral Resources is employing mine accident and occupational diseases prevention mechanisms through improved mine inspections, audits, investigations and monitoring of occupational exposure levels,” says Zuma.

Also, the Department of Mineral Resources and the Department of Health are employing strategic interventions to promote healthy as well as safe working conditions.

Source: biznisafrica


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South Africa grants 36 new mining licences

The Department of Mineral Resources approved 36 new mining licences in the past year, Minister Ngoako Ramatlhodi told Parliament at the tabling of his department’s budget on Thursday. Depsite the recent challenges, including a tough economic climate, the department had approved more than 36 new mining rights

Attend the Sustainability in Mining Seminar in Pretoria in June.
Attend the Sustainability in Mining Seminar in Pretoria in June.

projects in the past 12 months, with a potential to create about 6 000 jobs, he said.Ramathlodi said the country’s economy was recovering after last year’s protracted mining strike. In the first quarter of 2014, growth slowed to 0.6%.Tabling his budget vote on Thursday, Ramatlhodi called on the mining sector to respect and implement the framework agreement for a sustainable mining industry.”Last year, we had to deal with the aftermath of the protracted platinum strike arising from wage disputes,” he said. “I am aware that wage negotiations are currently underway within the gold sector and urge stakeholders to draw lessons from experience and avoid a repeat scenario.”

Mineworkers’ monuments

Ramathlodi said the government would continue to honour the memory of workers who lost their lives in mine-related incidents. Mineworkers would always be acknowledged for the role they have played in shaping the economy of the country, he said.He said the National Union of Mineworkers had recently drawn the department’s attention to a gravesite near Evander in Mpumalanga province, where about 1 000 workers were buried during the apartheid era and whose names and origins remain unknown. The minister said his department would ensure “decent monuments” would be erected for them.

Fatalities drop

Ramatlhodi said the intensified monitoring and enforcement measures at mines was helping the department inch closer to its goal of esuring zero harm on mineworkers.Improved health and safety of workers at the mines had led to a reduction of about 86% in fatalities reported by the mines. From the 615 fatalities in 1993, the rate now stands at 84 in 2014, Ramathlodi said.”In fact, 2014 was the safest year ever for the mining sector with the lowest fatalities of 84 recorded. This year up to 31 March, figures show that there has been a 41% reduction in fatalities when compared to the similar period during 2014,” he said.

Source: SA.info


 

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Transformation slow in mining sector

Pretoria – The majority of companies in South Africa’s vast mining sector have not met their transformation responsibilities in the ten years to 2014, Mineral Resources Minister Ngoako Ramatlhodi said on Tuesday.

Releasing an interim report into the mining sector’s compliance with the Mining Charter, Ramatlhodi told reporters in Pretoria that there was no agreement on the transformation levels in ownership and that the courts were asked intervene.

“There is no consensus on the applicable principle and the courts are being approached to resolve the matter on an urgent basis,” said Ramatlhodi.

He said the Supreme Court would have to make a ruling on the matter.

Regarding housing and living conditions, Ramatlhodi said 63 percent of mining rights holders with hostels had converted to either family and/or single units.

“The drive to improve the living standards of the mineworkers has not been fully realised. More needs to be done to address the broader objective of ensuring that mineworkers live in decent accommodation,” he said.

Ramatlhodi said only 36.8 percent of companies have met the target of spending five percent of their total annual payroll on training.

On mining communities development, Ramatlhodi said only 47 percent of the mining companies’ projects are between 75 and 100 percent complete.

Regarding procurement and enterprise development, Ramatlhodi said 42 percent of companies met the target of procuring capital goods from historically disadvantaged South Africans.

“A total of 33 percent met the target of procuring services from historically disadvantaged South Africans and 62 percent companies met the target of procuring consumables from the historically disadvantaged South Africans,” he added.

He said his department would be moving in to strengthen the efficacy of the Mining Charter through a review process to accelerate the transformation imperative in the mining sector. It was hoped this would create a conducive environment for the sustainable growth of the sector.

“Government values the contribution of the mining industry to the South African economy. However, we expect the investors in the industry to behave in a responsible manner, and to abide by the laws and policies of the country,” said Ramatlhodi.

“From the statistics, it is clear that there is still some way to go before we can truly transform the industry, and fully realise the objectives set out in the Charter and the MPRDA (Minerals and Petroleum Resources Development Act). We appeal to the industry and labour to continue to work with us.”

The Charter was adopted in 2004. It was amended in 2010 with a revised scorecard to strengthen and sharpen its efficacy in driving transformation and competitiveness in the mining sector.

The Mining Charter attaches conditions to which mining right-holders are expected to comply with in terms of the MPRDA.

Source: IOL


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