Mintails's gold plant and water tanks for treatment in Krugersdorp. Picture: FREDDY MAVUNDA
Embattled mining company Mintails was placed into final liquidation by the Johannesburg High Court this week leaving behind a massive R460m environmental liability.
Because there is only R28m in the company's environmental rehabilitation fund, the Department of Mineral Resources will now join a long line of Mintails creditors hoping to recover money to clean up the areas in which it operated.
The department of mineral resource is responsible for compliance and enforcement of the environmental law in the mining sector but has come under intense criticism from environmental lobby groups for its failure to effectively enforce it.
The company, which was majority-owned by Australian-listed group Mintails Limited, initially applied for business rescue - a provision under the Companies Act to rehabilitate financially distressed corporations - in October 2015. But with little prospect of this succeeding, it was placed into provisional liquidation in August this year. Mintails Limited, itself, has since been liquidated.
On Wednesday Mintails Mining SA and Mintails Gold SA were placed into final liquidation, attorneys for the liquidators, Webber Wentzel, confirmed. A third entity, Mintails SA Randfontein Cluster, remains in provisional liquidation for now.
Most of Mintails’s business involves extracting gold from old dumps on the West Rand of Johannesburg and treating material for other small gold miners. It also operated mines in the Krugersdorp area.
The department of mineral resources's regional manager for Gauteng, Sunday Mabaso, told the parliamentary committee on mineral resources last week the company had operated without ever having a valid mining licence, an environmental management plan or the funds to fulfil these obligations.
The company had three mining rights applications granted, but these were never in fact issued as it failed to comply with several conditions, such as providing for the environmental liability, Mabaso said.
Because the company employed 750 people, the department made numerous concessions and provided several extensions to assist it to comply although Mintails never did.
The department has a budget for the rehabilitation of ownerless and derelict mines, administered by Mintek, but in line with the polluter must pay principle, it wants those responsible for the environmental degradation to foot the bill.
It told the parliamentary committee it was considering prosecuting the directors of Mintails in their personal capacities. But both the department and environmental activist group Federation for a Sustainable Environment, have raised concerns that this could drag on because of backlogs at the National Prosecuting Authority.
Federation CEO Mariette Liefferink said liquidation papers and the business rescue plan showed there was delinquency by the Mintails directors and proposed this could allow for the Companies and Intellectual Property Commission to deregister them.
Mark Brune, former chairperson of Mintails Limited, said he was saddened by the news that the South African company had been placed into final liquidation.
“For me it is quite a sad day to see that it has been placed in liquidation, particularly the time spent with the people that were and have been involved with Mintails and grappling with the plethora of issues that affected not only the company, but the staff, local communities and the local environment. Despite my personal conviction of what could be achieved, I did step out of the business in October 2016 and formally resigned in March 2017.”