Mines duck environment dues

It’s an old trick of the mining game: when it comes to paying for rehabilitation of mined land, duck the liability by selling the mine or declaring insolvency. Or put it under indefinite “care and maintenance”.

New research by the Centre for Environmental Rights’ (CER) and Intellidex shows just how opaque local mining rehabilitation is. Eleven mining companies were assessed on rehabilitation funding, and the findings were not good.

The information disclosed by companies is unclear, inconsistent, and in some cases unreliable. Nor does it allow for cross-company comparisons.

“This means it’s impossible to check if the estimated costs of rehabilitation given by mining companies are accurate, if enough money has been set aside to pay for it, and if rehabilitation is actually being carried out,” says CER’s Christine Reddell.

The law requires mining companies to set aside and ring-fence enough money for rehabilitation of land and water damaged by mining. If the company fails to rehabilitate, the state is supposed to be able to access that money and carry out the process.

Some companies are better at disclosure than others. Exxaro and Atlatsa Resources top the list in terms of disclosure. Down at the bottom are Lonmin, MC Mining and Wesizwe Platinum.

A cursory glance around Johannesburg reveals just how little rehabilitation is actually undertaken. Old mine dumps are visible from Springs in the east to Krugersdorp in the west. While some are still being worked, others have been abandoned.

Companies historically evaded rehabilitation liabilities by selling operations to smaller miners, unwilling or unable to fulfil obligations.

The department of mineral resources does not allow public participation when it authorises these sales, as it should in terms of the Promotion of Administrative Justice Act, so these transactions take place without public scrutiny.

Some declare insolvency or place the operation under care and maintenance. “Seven out of the 11 companies we looked at had at least one operation under care and maintenance,” says Reddell, which leaves the door open to continue operations, while avoiding liability for rehabilitation.

Part of the problem is the complex reporting and regulatory system. Historically, financial provision for rehabilitation was regulated under the Mineral and Petroleum Resources Development (MPRD) Act and regulations. This system has been replaced by amendming the MPRD and the National Environmental Management Act (Nema), and new Nema financial provisioning regulations issued in 2015.