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Shirked responsibility
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Thebe Mabanga
Financial Mail
Friday, May 28, 2010
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SA could pay as much as R30bn to rehabilitate mines. This estimate does not include indirect costs, nor has it been adjusted for inflation. The real cost could soar to R50bn.
Though measures are in place to prevent huge escalation, there is no agreement on how costs should be shared between government and industry.
The portfolio committee on mineral resources has held hearings in parliament with the department of mineral resources and the Chamber of Mines. Last October, the auditor-general (AG) found the department lacked the capacity to monitor the rehabilitation of mines.
The AG discovered that between May 2005 and March 2008, the department issued tenders for nine contracts to clean up mines, but failed to appoint any of the contenders. His report recommends the establishment of a permanent officein the department to manage this work.
The audit also found up to 10 projects that went out to tender up to three times. This increased the cost of the projects from R23m to R34m.
Mosa Mabuza, acting deputy director-general for mineral policy & promotion, outlined the department’s rehabilitation plans to the committee.
A research programme on abandoned mines was begun in 2000, and a policy was drafted and approved by cabinet in December last year. The department’s strategy is centred on the constant monitoring of 6500 sites. At least 154 have been identified as requiring rehabilitation soon. Many are dormant asbestos mines.
Mabuza would not give details on who owns the mines. He says government tries to identify owners before developing a funding model for rehabilitation. Government believes the clean-up should be in collaboration with industry.
The research discovered shafts that can still be mined profitably. But as soon as an abandoned mine is identified as profitable, an owner claims it but the mining profits cannot be used for rehabilitation.
Nikisi Lesufi, senior executive for health & environment at the Chamber of Mines, told the committee an obstacle to rehabilitation was that companies applied for mining rights to two government departments — mining, and water & environmental affairs — which didn’t appear to be communicating with each other. The result is that companies simply “apply the decision that suits their needs”.
Rehabilitation is administered under the Mineral & Petroleum Resources Development Act of 2002 and the National Environment Management Act of 2004.
When applying for the conversion of old-order mining rights, companies have to outline how they plan to rehabilitate the area when the mine reaches the end of its life.
Chamber of Mines CEO Mzolisi Diliza says the cost of rehabilitation cannot be set aside before a project starts, as it would make investment unattractive. A popular model, in its early stages, is to set up a trust fund that accumulates contributions throughout the life of the mine. Diliza saysmining companies are also beginning continuous rehabilitation throughout a mine’s operation.
ANC MP and chairman of the portfolio committee on mineral resources Fred Gona is unhappy with the department’s inability to provide updated figures on how many trusts have been established, or how much has been contributed. He insists the department has no “clear strategy” to address rehabilitation. The R52m allocated to clean up mines in the current financial year is for administration, not for rehabilitation, he says.
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