The launch of Wood on 9 October 2017 represented a significant occasion for all who have been part of the legacy organisations.
Both Wood Group and Amec Foster Wheeler have been evolving for a number of years. For Wood Group, this journey gained momentum in 2015 following the decision to restructure the company around its service offering in July 2016. Amec’s acquisition of Foster Wheeler in November 2014 and subsequent transformation programme were key stages in Amec Foster Wheeler’s development.
The need for the Wood Group’s fundamental change was brought into sharp focus with the deteriorating market conditions within the oil and gas sector that started in 2014. The services industry has been forced to respond to greatly reduced levels of activity in some of the most mature basins, and ways to reduce volatility caused by commodity price fluctuations have come into focus.
In March 2017, the Wood Group approached Amec Foster Wheeler to combine the two world-class organisations. “It was an opportunity to execute a broader strategy by greatly increasing the company’s exposure to non-oil and gas end markets and adding new capabilities,” says Martin Smith, Senior Vice-President: Mining & Minerals, EMEA region and country manager for Wood South Africa.
“For Amec Foster Wheeler, it was the opportunity to increase its size and scale in a tough market. The possibilities of creating something new that is more competitive and compelling than either legacy organisation alone was what led to the decision to form Wood from the combination of both companies.”
In South Africa, the new entity will see the legacy MDM Engineering and Amec GRD, already combined in 2016 under the Amec Foster Wheeler banner, grow from strength to strength with support and access to high value technical expertise – specifically in automation and control and digital solutions which can be applied to mines of the future.
Wood has the capability to deliver projects from concept to closure in a broad range of commodities, to support some of the most logistical and technically challenging mining projects in the world. The business has many global offices with main execution centres in Vancouver, Santiago, Johannesburg and Perth, providing front-end geology, process and environmental design through conceptual and detail design, project management, construction, operations and mine closure.
In the EMEA region, Mining & Minerals are led from the Johannesburg office. Following on from the Husab uranium project in Namibia, the office is now getting ready to start the execution of another uranium project, Berkeley’s Salamanca, in Spain.
Gold and diamonds are two other commodities that feature heavily in Wood’s Africa portfolio with the recently completed Petra Diamonds Cullinan project (plant expansion and upgrade) in South Africa and the Tasiast Phase 2 project (EPCM) for Kinross Gold in Mauritania.
Although the commodity market remains under pressure, some signs of recovery are noticeable. Mining & Minerals, under the new Wood brand, intends to increase market share in 2018 onwards and expand its capabilities with global support and skills.
By harnessing the “power of three” – being the inherent strength of the Wood Group, Amec and Foster Wheeler – Wood aims to be the new global leader in technical, engineering and project services, operating in more than 60 countries, with a revenue of over US$11 billion and over 160 years’ experience. In Africa, Mining & Minerals will continue through its unique “fit-for-client” approach to service both larger and smaller clients.
It has been more than a decade since the accident, but Vincent Mashinini can’t forget the moment his underground world collapsed.
His right leg still bears the scars from the rocks that fell and temporarily pinned him underground, his livelihood nearly becoming a death trap.
Mashinini spent 15 years as a small-scale illegal miner, toiling in the abandoned coal mines that pockmark Ermelo and the surrounding Mpumalanga countryside. Along with agriculture and tourism, coal mining sustains the town’s economy as it feeds the nearby power stations generating some of the country’s electricity.
“We’ve lost brothers and sisters and mothers,” Mashinini said. “But there is no employment. If you want to put food on the table, you must come here.”
The traditional coal majors that have dominated the sector for decades are looking to leave South Africa as uncertainty surrounds Eskom contracts and the world slowly moves away from fossil fuels. As a result, the country’s coal industry is welcoming more and more junior miners who rarely complete environmental or social rehabilitation, causing a proliferation of abandoned mines around towns such as Ermelo.
Xavier Prevost, a senior coal analyst with the mining consulting company XMP Consulting, said Eskom’s policies of signing long-term contracts and buying only from 51 percent black-owned companies were pushing large mining houses away.
“Most of the majors are not investing in coal due to the current government politics. Another reason for their retreat is their inability to negotiate new agreements with Eskom,” Prevost said, adding that many of Eskom’s contracts with large miners would expire by 2020.
BHP Billiton spun off its South African coal and other lower-value assets to South32 in 2015. Anglo American is also in the process of disposing of “lower-margin, shorter-life assets”, including some South African coal, the company’s media team said in a statement sent to The Star.
“In terms of Anglo American’s Eskom-tied mines, the company has initiated a process to exit its Eskom-tied mines (Kriel, New Denmark and New Vaal). We believe these assets would be better served under new ownership that can provide more focused capital and management to continue to create value,” the statement said.
The growth of alternative energy sources has also affected South African coal by shrinking certain export markets.
The US’s Energy Information Administration predicts renewable energy production will increase worldwide from 22 to 29% between 2012 and 2040. The predictions see coal concurrently falling from 40 to 29%.
In many cases, new solar and wind projects are cheaper than coal. South Africa, the world’s sixth largest coal exporter, was beginning to feel the impact of this trend, Prevost said.
“Environmentalists have affected coal heavily. The biggest example is China. The change in policy in China has caused havoc in coal. China, the largest importer of coal in the world, suddenly changed its policies and is stopping importing,” Prevost said.
The price of coal rose from less than R300 per ton in 2000 to more than R2000 a ton in 2008, which in part caused a surge in applications for mining and prospecting rights. The coal price is now down at least 40% from its peak, and smaller miners who entered the industry looking for a quick profit have in some cases abandoned their operations.
Several Ermelo coal operations where Mashinini once laboured were abandoned during this period. Owned by Golfview Mining, a subsidiary of the Anker group based in the Netherlands, the sites are worked by small-scale miners, while unrehabilitated waste dumps and remnants of mining infrastructure sit derelict.
One partially rehabilitated portion lies in the centre of Johan Vos’s farm. “They’re getting away with murder,” Vos said of Golfview, which rented his land and guaranteed rehabilitation.
“I didn’t sell the land to them because they were just going to mine that one piece. They mine the piece, they rehabilitate and then I can go on. That was the whole idea. It didn’t happen,” Vos said.
Several years after taking a plea agreement and fine for its environmental practices, Golfview submitted a business rescue plan in 2015.
The company’s plan estimates the cost of rehabilitation at R29 million but reveals that only R5m is held in trust funds specifically for that purpose. Additionally, at the time the plan was submitted, the company owned more than R622m in liabilities, meaning additional funds for rehabilitation would be extraordinarily difficult to procure.
With no legal power to deny mining on his property, Vos has a second coal mine on his farm that feeds the nearby Camden power station.
He has not seen any rehabilitation at a third mine since operations abruptly halted six months ago, while a fourth mine is set to begin operations on his property, as contract details are being finalised.
Only 10 years ago, six companies accounted for 90% of South Africa’s production and eight collieries mined more than 60% of the country’s coal. While 93 coal mines produced all of South Africa’s coal in 2016, that number increased 59%, to 148 mines, by 2016. Production, however, increased by only about 10%, indicative of a trend towards smaller mines.
But with smaller mines and shorter lifespans, mining companies are targeting new areas for coal mining.
Although some grasslands and wetlands in the Mpumalanga Highveld have gained legal protection in recent years, companies continue to lodge mining applications. More than 60% of Mpumalanga falls under applications for rights to either mine or prospect.
According to the Department of Environmental Affairs, by the end of 2013, prospecting rights already covered 25.4% of Mpumalanga’s wetlands, 32.2% of its freshwater ecosystem priority areas and 41.8% of its grasslands.
Documents emerged last month showing that the ministers of environmental affairs and of minerals and energy had signed off on a coal mine within the Mabola Protected Environment near Wakkerstroom, part of a strategic water source area in Mpumalanga.
Koos Pretorius, director of the Federation for a Sustainable Environment, said high-potential agricultural land often coincided with coal deposits, and the mining industry encroaching on these lands was creating concerns for food security.
“The soil gets destroyed from the opencast mining, and much of it is opencast. The reason for that is simple. If you do an underground mine you leave roughly 35 to 40% of the mine, so they tend to do as much opencast as possible,” Pretorius said.
Recent periods of drought and sporadic weather patterns, likely attributable to climate change, have also had an impact on agriculture.
It is estimated that South Africa’s operational and abandoned coal mines together can release greenhouse gases equalling the warming effect of more than 4 million tons of carbon dioxide per year, roughly the same as consuming 1.8 billion litres of petrol.
Proper rehabilitation could minimise the release of these gases.
The Star recently obtained documents from the Department of Mineral Resources that shed light on the money held in financial provisions for rehabilitation. As of 2015, R45bn was held around the country in these funds.
While Mpumalanga and Limpopo – the country’s two most important coal mining provinces – refused to hand over their data, KwaZulu-Natal and Free State – two other provinces with coal mines – did release theirs.
Free State holds more than R5bn in financial provisions for rehabilitation, but the largest 5% of funds accounts for 99% of the money.
This means smaller operations, which are more likely to close or be abandoned than large sites, have an average of less than R60 000 in their funds.
KwaZulu-Natal is a similar story, with the largest 5% of funds holding 80% of the money.
Thulani Mnisi is a ward councillor in the Wesselton township in Ermelo. With so many residents living in poverty in the township and surrounding informal settlements, he said, mining could be tolerated if it brought jobs and some semblance of environmental responsibility.
Instead, the Imbabala Coal Mine sits abandoned and adjacent to the township.
Mine tunnels extend under the community, and illegal miners chip away at the underground pillars supporting the mine. Numerous people have died during cave-ins. “Those miners, after they mined, they just left the place like that,” Mnisi said.
The appeal by the country’s biggest gold mining companies against last year’s decision by the South Gauteng High Court to allow sick gold miners to fight for compensation as a group is to be heard in the Supreme Court of Appeal in May.
The Court ruled in May last year that some 100 representatives of mineworkers affected by silicosis and TB could bring a class action against 80 gold mining operators and mining houses.
The Occupational Lung Disease Working Group, (OLDWG), consisting of the chief executives of the largest gold producers – African Rainbow Minerals, Anglo American SA, AngloGold Ashanti, Gold Fields, Harmony, and Sibanye – has appealed the decision.
If the Supreme Court upholds the certification by the High Court, OLDWG will likely appeal to the Constitutional Court.
The mining companies’ strategy is to use appeals to delay any trial on the merits of the case for as long as possible while they manage a negotiation process away from judicial oversight. This process brings together senior negotiators and administrators from the Departments of Labour, Health, and Mineral Resources, the five biggest mining trade unions and the gold producers.
The process began under the auspices of the Presidential Task Team on Distressed Mining Communities set up by acting President Kgalema Motlanthe and now under the custodianship of Minister Jeff Radebe, who in turn has entrusted it operationally to Deputy Minister of Mineral Resources, Godfrey Oliphant.
The mines have commissioned the large International law firm Bowman Gillfillan’s John Brand to facilitate this complicated and cumbersome settlement process. The objective is an out-of- court financial settlement with the claimants’ legal representative, with the money to be used to set up a 10 to 15 year Trust Fund. The fund would pay “top-ups” to workers who have been compensated by the Department of Health for silicosis and/or TB contracted on the mines in terms of the Occupational Diseases in Mines and Works Act (ODIMWA).
The fund would also be used to help the Department of Health identify and find eligible sick workers through the “one-stop shops” in gold mining and rural areas, and process their claims.
Through the Ku-Riha project, the fund would also help the Department sort out the colossal mess which is the Mining Compensation Fund with a backlog of around 100,000 unpaid claims for silicosis and TB.
And, crucially, all future mineworkers would be brought under the Compensation for Occupational Injuries and Diseases Act (COIDA) and the Department of Labour, instead of ODIMWA and the Department of Health.
This shift is to take place without any loss of benefits under ODIMWA. These include lifetime free medical examinations for silicosis/TB, and benefit payouts for these diseases on the basis of heart and lung autopsies when miners die, of any cause, during or after their mine service. These benefits do not currently apply under COIDA.
The move to COIDA would improve the paltry level and type of benefits provided to mineworkers by ODIMWA, by entitling some of them to lifetime pensions, payouts to dependents when they die, and higher compensation in general. But it would also tie them into a cast-iron “no fault” compensation system, which would close the door on any future civil litigation for damages for employer negligence causing silicosis and TB.
As far as OLDWG is concerned, the creation of the Trust Fund implies moving silicosis and TB liability from ODIMWA to COIDA for the future, and the sick workers dropping their class action suit. The main stakeholders in the negotiation appear to agree on the main points above.
After discussions with unions and government last year, OLDWG was confident that the move to COIDA could be achieved by the end of 2016. That deadline has come and gone, and has not been replaced by a new estimate. However, the normal procedure for mining-related legislation is that a draft bill is discussed between the Department of Mineral Resources and the Chamber of Mines, after which it is gazetted for public comment for 30 days, and then goes to NEDLAC for finalisation. Current amendments to the Mines Safety and Health Act – much less complex than the Working Group proposal – have been there for two years, while a badly-drafted amendment to COIDA in 2012 never saw the light of day. From NEDLAC, the Cabinet considers the draft bill, and refers it to Parliament for deliberation, in this case involving the Labour and Health portfolio committees.
So far, the first step, a draft bill, is conspicuous by its absence.
The question of how long it will take is crucial because the death rate of the sick workers involved in the litigation is high, and their claims will die with them, unless the Trust Fund settlement is expedited.
OLDWG has stated that is “possible” by the end of 2017, and that it may include settlement for dependents of claimants who die without receiving anything, despite the fact that OLDWG has appealed the ruling to this effect along with every other aspect of judgement on the class action certification by the South Gauteng High Court. Death of claimants without settlement was the main reason why their lawyers settled for R464 million for 4,365 former mineworkers with silicosis in the Qubeka versus Anglo American and Anglogold case in 2016, establishing the Qhubeka Trust to pay out the workers in that litigation. Similarly, in Blom versus Anglo American in 2013, the first-ever private settlement of a silicosis damage suit in South Africa, 23 silicotic former mineworkers were paid out an undisclosed sum with no admission of liability on the part of Anglo, again because they were dying fast.
Delays to compensation for mineworkers are built into the complex negotiations under way. If the “top-up” payouts by the Trust are to be combined with compensation via ODIMWA, this would greatly extend the period of waiting for financial relief.
GroundUp put this question to Alan Fine of Russell and Associates, the public relations firm hired by OLDWG to liaise with the media and public over its silicosis/TB class action resolution strategy. “Payouts of the ‘top-up’ will be dependent on proof of compensable illness, but claimants will not necessarily have to go through the entire ODIMWA award process,” he said. This implies that the “top up” may be paid to claimants before they receive – at some unspecified future time – what they are owed under ODIMWA. “Down payment” would seem a more appropriate term in this instance than “top-up”.
Fine also said that OLDWG and the Chamber of Mines had put tens of millions of rands into the Ku-Riha project and the one-stop shops, into funding staff positions in the Mines Compensation Commissioner’s office in the Department of Health, and had seconded a chief operating officer, project manager, and medical staff to the Commissioner’s office, as well as financing digitalisation of hundreds of thousands of mineworkers’ records, and assisting with one- stop shops to find and help claimants. “The combined effect of this has been to triple the rate of payments to claimants between the years 2014-6,” he said.
This statement should be interpreted however with caution, because to this day, there are still only two “one-stop shops” up and running, with others promised in Burgersfort and Kuruman not yet operational. Worse, Dr Barry Kistnasamy, the Mines Compensation Commissioner, told the Parliament’s portfolio committee on Health on 7 September 2016, that it would take 19 years to get through the backlog of unpaid medically certified claims sitting at the Commissioner’s office. And, he said, compensation would cost not tens, but hundreds of millions of rands – his estimate to the Committee was R500 million.
Graham Briggs, former CEO of Harmony, speaking at the recent International Mining Indaba in Cape Town, said that although an academic study had estimated the number of potential claimants at 280,000, the figure was likely too high. He did not explain which study he was referring to, and exactly how it was flawed, or perhaps outdated because of death of potential beneficiaries from their occupational disease. Even an estimate of 100,000 was too high, he said.
This suggests that the amount of money the mines are considering putting into the Trust Fund will be based on a very conservative estimate of the number of eligible claimants, rather than on what the in-principle criteria should be for payouts irrespective of the actual number of claimants who come forward. A court would consider, for each claimant, factors like income lost both by former mineworkers and by those who care for them due to their disease, and medical and transport costs already incurred, as well as pain and suffering. That is the crucial difference between a negotiated settlement out of court, and a court determination of damages.
The snail’s pace at which the ODIMWA machinery is being fixed despite OLDWG’s limited financial and other assistance, and and similarly halting progress on identifying beneficiaries because of the slow roll-out of one-stop shops suggest that the number of ultimate beneficiaries identified will be a small proportion of those who are sick and dying.
The immense backlog in silicosis/TB benefit disbursement is not the only backlog in social security money owed to ex-mineworkers. The other is the matter of mineworkers’ provident fund payouts. On 30 May 2014, Deputy Minister Oliphant estimated that the Mining Industry Pension Fund, negotiated by the NUM with the Chamber of Mines in the 1980s, had accumulated R30 billion in unpaid pension and provident fund payments for around 200,000 retired or retrenched mineworkers. Pilot projects were underway to find the mineworkers, Olifant said, but cautioned that despite inquiries to TEBA (which possesses 1.5 million records of African ex-mineworkers going back decades) and a public radio campaign in the Eastern Cape, Limpopo, Kwazulu, the North West Province, Botswana, Mozambique and Swaziland which yielded 25,500 responses, less than one hundred back-payments of provident fund benefits had been made. He promised to redouble efforts to reduce the backlog, in a mirror image of the same situation around the silicosis/TB issue.
Huge numbers of living ex-mineworkers and their families therefore continue to wait to be paid what they are owed in social security benefits due to rampant disease and long service in the gold mines. They are the descendants (literally in many cases) of people from all over the region who built modern industrialised South Africa. They are owed a lot of money by the mines and by the South African state. It is to be hoped that neither will sneak out of the restaurant after their century-long slap-up meal of profit, foreign exchange, and fiscal treasure, without settling the bill.
In a world where the demand for water continues to grow and the resource is finite, a new United Nations report argues that wastewater, discarded into the environment every day, once treated, can help meet the needs for freshwater as well as for raw materials for energy and agriculture.
Needless to mention, treating wastewater and removing pollutants can also remarkably reduce the impact on the environment as well as on health.
“Improved wastewater management is as much about reducing pollution at the source, as removing contaminants from wastewater flows, reusing reclaimed water and recovering useful by-products [as it is about increasing] social acceptance of the use of wastewater,” noted Irina Bokova, the Director-General of the UN Educational, Scientific and Cultural Organization (UNESCO) Director-General in her foreword to the World Water Development Report 2017 – Wastewater: An untapped resource.
The report, launched today in Durban, South Africa, on the occasion of World Water Day, also highlights that improved management of wastewater is essential in achieving the 2030 Agenda for Sustainable Development.
“It’s all about carefully managing and recycling the water that runs through our homes, factories, farms and cities,” said Guy Ryder, the Director-General of the UN International Labour Organization (ILO) and the Chair of UN-Water, urging for reducing and safely reusing more wastewater.
“Everyone can do their bit to achieve the Sustainable Development Goal target to halve the proportion of untreated wastewater and increase safe water reuse by 2030.”
Sustainable Development Goal 6 (SDG6) has specific targets on halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally (target 6.3) as well as supporting countries in wastewater treatment, recycling and reuse technologies (target 6.a).
Health and environmental dimension – particularly stark for low-income countries
The report also revealed that low-income countries are particularly impacted by the release of waste water into the environment without being either treated or collected, where, on average, only 8 per cent of domestic and industrial wastewater is treated, compared to 70 per cent in high-income countries.
As a result, in many regions of the world, water contaminated by bacteria, nitrates, phosphates and solvents is discharged into rivers and lakes ending up in the oceans, with negative consequences for the environment and public health.
For instance, in Latin America, Asia and Africa, pollution from pathogens from human and animal excreta affects almost one third of rivers, endangering the lives of millions of people.
Furthermore, growing awareness on the presence of hormones, antibiotics, steroids and endocrine disruptors in wastewater poses a new set of complexities as their impact on the environment and health have yet to be fully understood.
These set of challenges underscore the need for urgent action on collection, treatment and safe use of wastewater.
Wastewater as a source of raw materials
In addition to providing a safe alternative source for freshwater, wastewater is also a potential source of raw materials, noted the report.
Owing to developments in treatment techniques, certain nutrients, like phosphorus and nitrates, can now be recovered from sewage and sludge and turned into fertilizer. It is estimated that nearly 22 per cent of the global demand for phosphorus (a depleting mineral resource) can be met by treating human urine and excrement.
Use of treated wastewater has long been practised by astronauts, such as those on the International Space Station who have been reusing the same recycled water for over 16 years
Similarly, organic substances contained in wastewater can be used to produce biogas, which could power wastewater treatment facilities as well as contribute to energy needs of local communities.
In addition, use of treated wastewater is growing for agricultural irrigation. At least 50 countries around the globe are now using treated wastewater for this purpose, accounting for an estimated 10 per cent of all irrigated land.
Lastly, the report also mentioned that treated wastewater can augment drinking water supplies, although this is still a marginal practice. Cities such as Singapore, San Diego (United States), and Windhoek (Namibia) have been treating wastewater to supplement drinking water reserves.
A great example is use of treated wastewater, long practised by astronauts, such as those on the International Space Station who have been reusing the same recycled water for over 16 years.
Sustainability has always been a key consideration in the mining industry and will continue to shape activity today and beyond.
Tord Svensson, head of TOMRA Sorting Mining
Activity in the mining industry is integral to modern life, with minerals and commodities mined across the world playing a crucial role the way in which both businesses and consumers operate.
As with any industry providing essential products and services, a significant amount of attention is placed on its processes and their impact from both an environmental and economic perspective.
Figures compiled by the United Nations’ Sustainable Development division show that, in the 20th century, extraction of construction minerals increased by 34 times, while that of ores and industrial minerals increased 27 times, which significantly outpaced the quadrupling of the global population and even the 24-fold increase in worldwide GDP.
The dramatic increase in activity naturally placed strain on resources and also created questions around sustainability, but the fact is that sustainable practices have long been an important consideration in mining, stretching back more than 50 years.
In an industry where developments take place across decades and decisions being made now could only come to fruition in half a century, it is essential that the potential impact of any move is taken into account.
A global report carried out by professional services firm Deloitte into the constant challenges and constraints affecting sustainability in mining found that that the ever-increasing demand for mined resources remains a major concern, as well as the consumption of resources such as energy and water, which are required throughout the extraction process.
Increasing pollution generated by the extraction process must also be factored into thinking, with these principles applying to both large-scale, multinational corporates, as well as smaller-scale operations.
In many cases, the sustainability of extraction can vary greatly depending on the industry, but regardless of the processes and techniques being employed and implemented, these operations are still associated with negative environmental and social impacts in some markets.
The ever-present challenge for the sector is strengthening the relationship with local communities and reinforcing the importance of mining to both revenue and employment in many nations, particularly developing countries.
The non-renewable nature of mined resources is also at odds with sustainability, which further illustrates how crucial the efficient use of resources for development remains.
Of course, questions around how to maximize the developmental benefits of mining while also contributing to both environmental and social sustainability are nothing new.
It was given the spotlight in the Johannesburg Plan of Implementation, agreed at the 2002 UN World Summit on Sustainable Development, where three priority areas were identified, including addressing the environmental, economic, health and social impacts and benefits of mining throughout the entire lifecycle, encompassing issues such as the health and safety of workers.
Another key aim outlined was to enhance the participation of stakeholders, including local communities and – just as crucially – fostering sustainable mining practices through the provision of financial, technical and capacity-building support to all countries.
At its core, the practices that will be central to maintaining and improving the sustainability of global mining is the management and reduction of energy and resources used in extracting materials.
Although new sites are being discovered and means of extracting materials are being developed, the nature of the work can have a significant number of side-effects on the surrounding area both in the short and long term. This necessitates the use of the most effective possible methods and machinery, as well as approaches to reducing water and energy use.
Minimizing the use of water that is diverted for mining activity – and can impact both the quantity and quality of water available downstream – has proven highly effective in countries such as Canada, where figures from the National Round Table on the Environment and the Economy show that water intake used in mining fell by a third in just ten years.
Reducing energy consumption is also paramount if the impact of the mining industry is to be mitigated; it is estimated that three per cent of the world’s energy is used to mine natural commodities, while land disruption remains a key issue as land that could potentially be used for vegetation may be spoiled.
The use of technology that can play a key role in reducing the industry’s impact on the planet in both the long and short term is therefore paramount, and TOMRA’s range of sorting technology is playing a crucial role in this.
Sensors are able to recognize the target material according to typical characteristics such as color, atomic density, transparency and conductivity and then selectively extract it using a pulse of pressurized air to minimize waste.
A strong emphasis is placed on reducing eventual water and energy consumption when designing all TOMRA machinery, and sensor-based material handling sorters are no exception.
Sorting has a direct effect on reducing the downstream energy consumption in relation to the amount of mass removed by the sorter. If a sorting machine removes 15 per cent of waste by mass, then downstream processes will use approximately 15 per cent less energy, and the same applies to water consumption.
However, processing a ton of sorted ore will consume the same amount of energy as unsorted material; the key factor being that you will be able to produce the same amount of final concentrate treating less material.
Sustainability continues to be at the heart of the mining industry, and maintaining this focus will ensure that new methods of extraction are being complemented by sustainable processes that help to maintain the integrity of the area being mined and its local population and offer tangible business benefits.
It is no secret that Africa is rich in minerals and other natural resources, resources that have been commercially exploited for centuries. Africa ranks first or second in the world’s global reserves in bauxite, cobalt, coltan, phosphate rock, platinum, vermiculite, manganese, soda ash and zirconium. The continent also has most other minerals and precious metals.
The continent also accounts for three-quarters of the world’s platinum supply. Half of the world’s diamonds and chromium comes from the continent, which also accounts for one-fifth of global gold and uranium supplies. Africa is also home to at least 33 countries with oil and gas. With recent discoveries, its importance as producer of iron ore is growing.
Although expenditure on exploration has grown dramatically over the last decade, the continent remains amongst the least explored regions of the world. Despite these riches and potentials, the continent’s people are amongst the poorest in the world and the continent has some of the most glaring inequalities.
This paradox of rich Africa, poor Africans is best characterised by the systematic inconsistency between a continent with a young, growing and fast urbanising population, rich natural resources and productive land with the most diverse flora and fauna, and yet the countries that make up the continent are in the majority of the least developed economies in the world.
We have the collective responsibility to reverse this paradox. Lessons from some of the most developed medium and large economies in the world show that most of these economies grew through the utilisation of resources, even though most of those countries do not have the resources locally. But they used these resources. One can therefore draw another paradox that has favoured the most developed economies.
This paradox sees rich countries not having the resources but recording exceptional economic progress. This second paradox is largely driven by the exploitation of the developing world, including Africa. The paradox is also driven by the aid dependency discourse which often sees some of our ministers of finance discussing aid for breakfast, lunch and dinner, despite the fact that fuel and mineral exports from Africa are more than seven times the value of aid.
We know no country that has ever developed through aid. Our development ought to be informed by what is in our possession and comparative advantage — in our case our riches lie in our abundant resources which include (1) human resources, which sees the continent having the world’s youngest population, (2) renewable resources, which include water, forests, oceans, fauna, flora, diverse ecosystems and sunshine, and (3) non-renewables, which include our mineral, gas, coal and oil resources.
Africa’s abundant resources should be used to spur on our industrialisation, economic modernisation and diversification towards an integrated and peaceful Africa with shared prosperity. In order to meet this objective we must address the factors that have perpetuated the paradox of a rich Africa, poor Africans by consistently and constantly changing the mind- set.
In order to change mindsets and receive better benefits from our resources we must strengthen our knowledge on the resources available to us by (amongst others) strengthening our mapping systems so that we can explore our own resources in a more sustainable manner.
We must change the mindsets so that we may move away from the current corrupt and rent seeking tendencies. This would ensure that we negotiate contracts that put African interests first and create sustainable linkages with local economies. The mindset change must increase the value add to our natural resources from 15 percent to at least 30 percent or more so that we can create jobs for millions of Africans who are currently excluded from the economy. In the end this will ensure that we cease to be a net exporter of raw materials.
We will ensure that we stop exporting jobs due to not processing our raw materials thus securing for us better economic opportunities and revenue generation. Every time we export raw material — we export jobs The changing of mindsets will require strong institutions and management, which will strengthen our strategies and facilitate for cohesive policies and implementation.
In this regard, we have also mooted an African Minerals Development Centre that will provide a framework for countries to negotiate better terms and contracts.
This centre will also complement our Commodity Strategy. Through strengthened institutions we will also ensure that we improve the picture in relation to domestic savings, resource mobilisation, tax collection and the patterns of ownership in the sector.
These strong institutions will assist in reversing illicit financial flows. Ultimately all these actions will improve the position of the fiscal base of African countries whilst facilitating for a more equitable redistribution of wealth and securing a better quality life for all Africans.
It is for these reasons that we developed and are implementing our 50-year vision for the Africa we want, through Agenda 2063. As an overarching development framework, it seeks to focus on developing much needed skills so Africans can take charge of their own resources, and use them to industrialise our econ- omies.
This will require that we provide energy to mines, industries, homes, farms, cities, businesses and rural areas. Through Agenda 2063 we will also connect Africans through ICT and transport networks; and we will improve the beneficiation and value addition to our natural resources.
More specifically, Agenda 2063 urges us to accelerate the implementation of the African Mining Vision, which advocates for “transparent, equitable and optimal exploration of mineral resources to underpin broad-based sustainable growth and socio-economic development”.
As Dr Carlos Lopes, Executive Secretary of the UN Economic Commission for Africa, wrote in his blog: At the core of the African Mining Vision is the realisation that Africa’s mineral resources can be better utilised to address the continent’s social and economic needs; the focus on environmental and social sustainability, the advantages of regional and international integration with attendant hard and soft infrastructure challenges, the emphasis of building of backward, forward and sideward linkages from the core mining sector and equitable principles of fairness in benefit sharing and use of resource revenues.
The business that small-scale miners are in can and must therefore contribute towards the realisation of these aspirations, most specifically in the following areas:
(1) The development of a critical mass of relevant African skills in the sector, the geologists, geophysicists and engineers so essential to small-scale mining, but also towards all skills necessary not only for exploration, but production and value addition.
(2) Linking the development of mining to the development of infrastructure. The classical picture of mining in Africa is that of a small island of efficiency (with water electricity, transport linkages) whilst communities around them are in the dark (no schools, no transport).
In addition, the transport and other infrastructure it develop, are aimed at taking whatever its mines, out of the continent by the quickest possible route. We must move away from this model, and ensure that there are the backward and forward linkages to the local and regional economies.
(3) The mining sector counts amongst those responsible for the illicit financial flows from the continent. You are in the sector and can help us to stem this tide of capital needed for developing the continent;
(4) Last, but not least, the need to also focus on the link to beneficiation of all the resources we are currently exporting.
Within Agenda 2063, we are also paying particular attention to Africa’s blue economy. Within this, deep-sea exploration is of course one component.
Today, We have a window of opportunity, where a number of economic, social and political factors have coincided and cohere in our favour. We cannot expect to do the very same things over and over again and expect different results. We cannot afford to continue on the same path, which has treated our resource heritage inappropriately and without a common purpose or vision. We must instil a mind-set change away from the misuse of our resources towards seeking benefits for all our people: the poor and marginalized majority.
We must use these resources to the benefit of our countries, these resources must not only benefit the companies where the countries come from as these resources are our common heritage they are ours we must have a win-win situation. We must use these resources towards a shared prosperity and inclusive development, as shown by the example of the “so called” Asian Tigers.
*Dr. Nkosazana Dlamini Zuma is the Chairperson of the AU Commission.- African Executive
Women have been known to break boundaries which have persisted to box them into certain classifications of occupations, mining has also been one of those jobs.
The Democratic Republic of the Congo (DRC), like many other African countries is rich with mining minerals including the ASM sector, however, Congolese women in Kivu, east of DRC, are deprived of a share in this wealth, says the World Bank.
The group’s report, ‘Resources and resourcefulness. Gender, conflict, and artisanal mining communities in Eastern Democratic Republic of the Congo’ compiled between 2012 and 2014, highlights the issues associated with the Artisanal and small-scale mining (ASM) sector in the Central African country.
According to the analysis, due to the mid-1990’s post wars, the ASM sector became the primary source of economy for inhabitants of the Kivu region, but the research found that gender discrimination, including sexual abuse is common in the region’s mining towns.
The majority of people directly involved in the extraction of minerals at mining sites were described as extremely poor and vulnerable with women subjected to sexual and economic predation.
Economic footprint – ASM sector
Two of the three intended mine sites were visited in Kalehe and Walungu, focus group discussions and key informant interviews including an analysis of the Congolese legal framework revealed the realities surrounding the ASM sector in the Kivu region. While mining jobs are supposed to be open to everyone, corruption is reported to be high in this sector. Acquiring a job for many women meant transactional sex was often their only means to gain an economic foothold in mining industry.
The analysis found that among other pressing issues such as corruption, there was also a lack of education on rights and limited availability of social forms of organisation for women and others. A significant number of both men and women were found to be not aware that there was a mining code in DRC with provisions to protect their right to work.
In light of this the following are the highlights of the report’s suggestions to better DRC’s ASM sector:
- Assist women access jobs other than sex work
- Address corruption and fraud in the mining sector resulting from increasing efforts at government regulation of this industry
- Provide technical assistance in the modernisation of ASM
- Engage in education around mining code and rights of those in mining towns
- Strengthen the capacity of local associations to advocate for their own rights
Myanmar’s government currently collects much of the trillions of kyat generated by oil, gas, gemstones and other minerals each year, primarily through its state-owned economic enterprises (SEEs). In the face of such centralized control over revenue, many ethnic groups have long asserted their right to make decisions over resource management in their states. In fact, combatants in areas of active conflict and leaders from several ethnic minority parties—particularly those associated with Kachin, Rakhine and Shan states—have openly called for greater resource revenue sharing.
These appeals are only expected to get louder as the NLD forms a new government. In its election manifesto, the party promised to “work to ensure a fair distribution across the country of the profits from natural resource extraction, in accordance with the principles of a federal union.” This statement implies at least two things: First, that the party intends to transform Myanmar into a federation, where states and regions have true sovereignty over some government responsibilities; and second, that it intends to enact a natural resource revenue sharing system.
A resource revenue sharing system will undoubtedly be on the table during evolving discussions on federalism. However, as we have seen in other countries, these systems come with considerable risks. In the most extreme cases, such as Peru, they can actually exacerbate conflict, encouraging local leaders to use violence to compel greater transfers from the central government or gain control over mine sites. While these experiences are atypical, natural resource revenue sharing often leads to financial waste, local inflation, boom-bust cycles and poor public investment decisions.
Myanmar is particularly susceptible to these risks as overall resource revenues officially recorded in the budget remain small—due to smuggling, underreporting, weak tax collection, and revenue retention by SEEs, among other causes. This means that there are limits to how much revenue sharing can help affected communities without the government first putting effort into capturing a bigger share of profits for the state.
How much money is at stake today? According to conservative estimates from Myanmar’s first Extractive Industries Transparency Initiative (EITI) report, the government collected nearly 2.6 trillion kyat in oil and gas tax and non-tax revenue and another 442 billion kyat in mining revenues in fiscal year 2013/14. Together, oil, gas and mineral revenues made up 47.5 percent of government revenues (excluding the significant sums that SEEs retain for themselves) in the same year.
However, official revenue figures vastly underestimate the true size of the non-renewable resource sector. EITI figures only cover a portion of jade sales. And illegal mining and smuggling of minerals, especially jade, has been well documented. Some independent estimates put the true size of the mineral sector at more than 10 times official figures.
Currently, the 42 percent of resource revenues that are not retained by SEEs in their own so-called “Other Accounts” are pooled with other fiscal revenues in the Union budget. Some are then distributed directly to state and regional governments, which are responsible for financing local infrastructure, agriculture and some cultural institutions.
As part of the government’s effort to decentralize fiscal responsibilities, the amount of the overall budget allocated to all states and regions has increased in recent years, from 3.4 percent in 2013/14 to 7.6 percent in 2014/15 to 8.7 percent in 2015/16. The government now says that it is using population, poverty and regional GDP indicators to determine how much it gives each state or region from this pool of money.
Research from the Natural Resource Governance Institute’s (NRGI) new report “Sharing the Wealth: A Roadmap for Distributing Myanmar’s Natural Resource Revenues,” generally corroborates this claim, but with qualifications. Our research indicates that, in practice, the Union sends more money per capita to regions and states that have greater development needs, are conflict-affected, and whose politicians are more assertive. This year, for instance, Chin, Kayah, Tanintharyi and Kachin received the highest per capita allocations, while Ayeyarwady, Bago, Mandalay, and Yangon received the lowest.
But just because more money is going to states and regions does not mean that there is more accountability or that social services and infrastructure are improved relative to other parts of the country. Nor does this fiscal decentralization address local demands for greater autonomy over natural resource revenues.
Most state and regional officials still report to Union authorities in Naypyitaw. Furthermore, state and regional governments still have low capacity to develop and implement budgets effectively. This means that state and regional spending is not necessarily efficient or linked to a coherent economic development plan.
While true federalism—partial sovereignty for states and regions—would require constitutional reform, there are three steps the new government can take now to “ensure a fair distribution across the country of the profits from natural resource extraction.”
First, the government can start building national consensus on a natural resource revenue sharing formula. This way, all parties would have clarity on the issues and feel a sense of ownership over natural resource governance. This is the principle means through which resource revenue sharing can help stop violent conflicts. Indonesia spent nearly two years negotiating a resource revenue sharing deal with conflict-affected Aceh before coming to an agreement. The ongoing Union Peace Dialogue could be one forum for discussion of how a revenue sharing system could be administered. This discussion would not be a substitute for formal parliamentary and public discussions, but could support government efforts to build peace.
Second, the government could further decentralize by making state and regional politicians and officials accountable to local residents. It could also delegate resource management and expenditure responsibilities to these officials slowly, so they have time to learn how to perform these new roles. This can be done even without constitutional change. The Colombian and South African experiences offer some lessons for how decentralization can be achieved in unitary states (though neither case is an unmitigated success).
Third, the government could improve the transparency and oversight of natural resource revenues by cracking down on smuggling and illegal mining and publishing project-level information on all extractive projects. Without this information, state and regional governments cannot verify the value of minerals being extracted on their land and therefore cannot trust that they would receive their due under any revenue sharing formula. Myanmar could look to Bolivia and Mongolia, which lead the way when it comes to extractive sector transparency. For instance, the Bolivian government publishes, in a clear and understandable format, online data on transfers to and between subnational authorities and on hydrocarbon production by province, field and company.
Natural resource revenue sharing can be a key component of peace-building and decentralization in Myanmar. Mineral-rich Kachin, Mandalay, Sagaing and Shan, and onshore oil-rich Magway and Bago would undoubtedly benefit. Governments in other states and regions with pipelines that transport offshore gas may also profit. But unless done properly, resource revenue sharing can help perpetuate conflicts that have gone on for far too long.