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The Mabola Protected Environment is an area of high biodiversity and a strategic water source area The Mabola Protected Environment is an area of high biodiversity and a strategic water source area WWF

Coalition defending Mpumalanga water source area

Written by  Centre for Environmental Rights Thursday, 03 August 2017 13:27
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Last week, the coalition of eight civil society and community organisations that has been resisting the proposed coal mine inside a protected area and strategic water source area in Mpumalanga launched further proceedings in the Pretoria High Court.

These new proceedings are a judicial review application to set aside the decisions of the Ministers of Mineral Resources and Environmental Affairs to allow a coal mine to be built inside a declared protected environment, coupled with an interdict preventing the start of any activities at the proposed mining site pending the outcome of that review.

The two Ministers gave their approval for the 15 year underground coal mine proposed by Indian owned mining company Atha-Africa Ventures Pty Ltd (Atha) inside the Mabola Protected Environment outside Wakkerstroom in Mpumalanga. They did so despite a series of court challenges and appeals pending against each of the licences given for this mine, and without any public participation.

In terms of the National Environmental Management: Protected Areas Act, commercial mining is prohibited in declared protected environments unless both the Ministers of Mineral Resources and Environmental Affairs give their permission.

The coalition consists of the Mining and Environmental Justice Community Network of South Africa, Federation for a Sustainable Environment, Earthlife Africa Johannesburg, Birdlife South Africa, the Endangered Wildlife Trust, groundWork, Association for Water and Rural Development (AWARD) and the Bench Marks Foundation, and is represented by the Centre for Environmental Rights.

The Mabola Protected Environment also falls within a strategic water source area that has been identified as incredibly important and strategic to protect in the interests of all South Africans. The proposed mine area is located in that part of the Enkangala Drakensberg strategic water source area which constitutes the headwaters of the Usutu River System, via the Assegaai River. The Assegaai River flows into the Heyshope Dam, from which water is inserted into the Vaal River System via inter-basin transfer. Accordingly, the mine area is a water source of the Vaal River System, which supports Gauteng’s water needs. The Usutu River flows through Swaziland and, after joining the Pongola River, flows into Mozambique, where it is known as the Maputo River. Accordingly, the health of the Usutu River System is also relevant to South Africa’s international obligations to Swaziland and Mozambique. All of these users will all be affected if the sources of those rivers are compromised.

Atha was granted a mining right by the Minister of Mineral Resources in 2015, shortly after the declaration of the Mabola Protected Environment by the Mpumalanga MEC. Since then, Atha has received licences and approvals from the Mpumalanga environment department, the Department of Water & Sanitation, and the Department of Mineral Resources. All these approvals have been challenged by the coalition through internal appeals, and a High Court judicial review of the mining right.

The coalition believes it has good prospects of success in all these proceedings, and that the approvals will be set aside by the courts in due course. If necessary, the coalition will take this matter to the Constitutional Court.

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THE FSE’s COMMENTS ON THE ENVIRONMENTAL IMPACT ASSESSMENT AND ENVIRONMENTAL MANAGEMENT PLAN REPORT BLYVOOR GOLD MINING PROJECT BVG 4880   Find the document attached for download.

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Mintails placed into final liquidation

BUSINESS DAY Mintails placed into final liquidation Department of Mineral Resources will join long line of creditors hoping to recoup money 20 September 2018 - 17:27 Lisa Steyn

BUSINESS DAY EXCLUSIVE: Liquidation allows Mintails to shirk environmental liabilities

21 August 2018 - 05:04 Mark Olalde   Pollution: Water resource management consultant Anthony Turton, with the Mintails gold plants and water treatment tanks in the background. Picture: BUSINESS DAY/FREDDY MAVUNDA Mintails Mining and several related companies have announced their liquidation, throwing into question the environmental rehabilitation of highly polluting operations near Johannesburg. Mintails mines and processes gold from a sprawling 1,715ha complex of waste piles and open pits in Krugersdorp and has for years been flagged for noncompliance. Its operations are bordered by informal settlements and suburbs housing thousands of residents, many of whom have complained of health effects, which they blame on radioactive dust and water pollution from Mintails’ mines. Records show that the cost to clean up the environment would be about R330m, but there is only R25.6m available. Observers fear that the situation could deteriorate further, as happened at the Blyvooruitzicht Gold Mine, an abandoned large-scale operation on the West Rand. A case study in the country’s deeply flawed mine closure system, Mintails teetered on the verge of collapse for years and entered business rescue in October 2015. Mariette Liefferink, the activist CEO of the Federation for a Sustainable Environment, tracked Mintails for more than a decade and is now working to intercede in the liquidation proceedings as the legal voice for what she labels the "mute environment". "There was poor planning. [Mintails’] due diligence was flawed. They overestimated the gold grade and the resource that could be reclaimed. "They continued to exploit the resource, to reclaim only the profitable parts and never top up the financial provisions," Liefferink says. As the company slips into liquidation, it passes the brunt of its environmental liability to taxpayers and, to an extent, to other mining companies. After Mintails fought for nearly three years to save the company, business rescue practitioner Dave Lake notified the Johannesburg high court in early August of his intention to liquidate the company. Provisional liquidation was granted on August 17 and a liquidator is expected to be appointed soon. THERE IS NO LONGER A REASONABLE PROSPECT OF RESCUING THE COMPANY. The business rescue plan called for the refurbishment of a gold ore processing plant but, according to a memo dated August 1 that Lake sent to the court and to affected parties, it failed when multiple investors ceased funding Mintails. "There is no longer a reasonable prospect of rescuing the company," the memo read. The liquidator will now decide how to pay back creditors with the remaining assets. Environmentalists fear this process could leave environmental liabilities low on the list of what deserves money. According to the business rescue plan, written in December 2016, Mintails owed various creditors more than R1bn, including a shortfall of about R300m in reclamation funding. Due to a web of involved companies, it remains unclear if a large portion of the already insufficient financial provisions can be accessed for environmental cleanup. DRDGold formerly held one of the mining rights and the corresponding trust fund, which are now in the Mintails group. DRDGold CEO Niël Pretorius says he believes that the trust fund contained R18m but he did not identify the trustees, whose consent is vital to unlocking the money. Documents show the Mintails group acknowledged that rehabilitation would probably cost between R300m and R336.5m, but it declined to top up financial provisions. According to the environmental management programme from one of Mintails’ mining rights: "These liabilities are also historic and predate Mintails’ involvement and should thus not be for Mintails’ account." Experts debate this narrow interpretation of the law. Lake wrote in the business rescue plan: "The Mintails group’s rehabilitation liabilities have remained largely unfunded for some time, and there are simply no free funds available to the [business rescue practitioner] to enable him to immediately provide such funding." Legal Resources Centre attorney Lucien Limacher is representing the Federation for a Sustainable Environment. "This is a trend that has been occurring for a couple of years where mining companies have undertaken a business rescue plan or have applied for liquidation because they have failed to really look after the rehabilitation fund," he says. The Legal Resources Centre sent letters to several government agencies, including the department of mineral resources, the department of water & sanitation and the department of energy, asking them to intervene in the situation and threatening to pursue legal action if the department of mineral resources fails to act. Department of water & sanitation spokesperson Sputnik Ratau says they are "engaging Mintails so that the immediate measures can be put into place to ensure water resources protection. A longer-term plan is required to ensure rehabilitation of the mining-impacted areas." Lake declines to answer questions about the failed business rescue and the liquidation but he wrote for Moneyweb in January 2017 and laid out his argument for Mintails’ use of business rescue: "Mintails was sick – but it wasn’t terminal." Now the situation has become what Liefferink calls "pass the parcel", with Mintails playing the part of a "scavenger company", a term coined by researchers to describe under-resourced outfits that buy the scraps left over from larger mining companies and ultimately abandon them. Large gold, coal and platinum mines rarely, if ever, properly close in SA and there wasn’t one large-scale mine in Gauteng that achieved full, legal closure between 2011 and 2016. Mintails’ case will not affect the law that ring-fences financial assurances for reclamation, Limacher says. "But it is precedent-setting in that mines might now start applying for liquidation to avoid paying the cost of rehabilitation." Mintails’ West Rand concessions came in part from DRDGold, which also remines waste piles, and from Mogale Gold, which was in judicial management when Mintails acquired it in 2006. Since then, Mintails engaged in a pattern of environmental degradation. For example, the department of water & sanitation found in an August 2014 inspection that Mintails transported "slurry/sludge" in unlined trenches, completed insufficient monitoring, spilled slurry from pipelines and implemented no storm water management system at a pollution control dam. In December 2016, polluted runoff from waste piles was found to be seeping through a dam wall into the Wonderfonteinspruit, which has immediate downstream agricultural uses in the community of Kagiso. Now it will largely be up to the liquidator and regulators to protect the environment and public health. "That is the pattern that seems to be followed in the gold mining industry, and, I assume, would be followed in the coal and platinum mining industries, as well. "As soon as a mine is no longer very profitable, it transfers its assets," Liefferink says. "That seems to have the tacit support of the department of mineral resources." However, the department of mineral resources sent a statement that reads: "The department will engage with the appointed provisional liquidators with the intention to safeguard the environmental and social responsibilities." Mintails former CEO Johan Moolman declined to comment except to say he quit on June 26 when he learned a new investor had bought the company. Mvest Capital agreed to purchase Mintails from Paige, a vehicle of the UK-based Harbour family, with the understanding that Mvest would inject R30m into the beleaguered company to stimulate the business rescue plan. Mvest decided against handing over the full amount, paying only R5.5m. Mvest director Matthew Moodley acknowledges the initial agreement and the R5.5m. He says that after a month it became apparent the deal would require more investment to succeed. "With the increased need for working capital in July, Mvest took a decision to withdraw from the transaction," Moodley says, adding that Mvest did not "conclude a transaction with Paige". Liefferink says these companies are all "jumping from a sinking ship". She fears Mintails will go the way of the abandoned Blyvooruitzicht Gold Mine, which was once one of the country’s most productive gold operations and is now a source of pollution, violent illegal mining gangs and headaches for adjacent mines. Mintails has followed a strikingly similar pattern. In the Blyvooruitzicht case, two companies, DRDGold and Village Main Reef, almost completed a business deal to sell the nearly exhausted mine and both walked away, claiming the other carried responsibility. "That whole area, just like Blyvooruitzicht, will be left like it is," Liefferink said. While neighbouring mining companies will probably have to pump water from the void in Mintails’ absence, the consequences of "the dust fallout and the toxic water in the river systems" will be carried by communities and by the municipality. oxpeckers.org Additional reporting by #MineAlert manager Tholakele Nene https://www.businesslive.co.za/bd/companies/mining/2018-08-21-liquidation-allows-mintails-to-shirk-environmental-liabilities/

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