Harvard Report: The Cost of Gold

Written by  Thursday, 13 October 2016 11:23
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A report has been published by the Harvard Law School International Human Rights Clinic titled "The Cost of Gold: Environmental, Health, and Human Rights Consequences of Gold Mining in South Africa’s West and Central Rand.  

The reports states, "The complex web of responsible government agencies and repeated legislative changes to that organizational structure have impeded the development of a coordinated plan to deal with the negative effects of mining. The limited scope of action, inadequate attention to at-risk communities, and insufficient consideration of environmental concerns have undermined the completeness of any response."

 

The authors further recommend that given the severe and ongoing nature of the situation, "government should take immediate steps to rectify the inadequacies of its efforts. In particular, it should develop and implement a national-level program dedicated specifically to reducing the adverse effects of mining in the West and Central Rand. If coordinated and comprehensive, this program would help South Africa protect its communities and their environment, meet the country’s legal obligations, and promote realization of human rights." 

The report highlights that the people affected by mining do not have information about mining and its impacts, concluding this "has impinged on their awareness and understanding of the situation and thus magnified the threats they face. It has also deprived them of data necessary to identify better protections for the environment and their health."

"In many cases, local people have not been informed in advance of mining projects that directly relate to their lives. Parliamentarian Gareth Morgan, shadow minister of water and environmental affairs, told IHRC in 2012 that “the most common email I get from communities about mining is that ‘there is a mine going in down the street from me and nobody told me about it.’

"Community members have also been left out of decisions about policies that affect the environment and their health, a corollary to the lack of notice of new projects discussed above. The government bears primary legal responsibility to ensure residents receive information, yet so far it has largely neglected its duty to “proactively put in the public domain Government information of public interest.” The main conduit of information about mining contamination in the region has been neither government nor industry, but civil society."

The full report may be downloaded. 

MINING

New blow for would-be Mpumalanga coal miner

NEWS | MPUMALANGA New blow for would-be Mpumalanga coal miner 29 January 2019 | By John Yeld Surprise move by MEC for Environmental Affairs Vusi Shongwe A new blow has been dealt to attempts to open a coal mine in protected Mpumalanga grasslands. Photo: supplied A surprise, flip-flop decision by Mpumalanga MEC for Environmental Affairs Vusi Shongwe has delivered another blow to an Indian mining company trying to establish a huge new coal mine in a critical water catchment area. Shongwe’s decision has reignited a vicious Twitter exchange about the proposed mine. Atha-Africa Ventures, a local subsidiary of India-based transnational mining and minerals company Atha Group, is attempting to develop the Yzermyn coal mine, an underground mine with a projected 15-year-lifespan that lies within the Mabola Protected Environment (MPE). The MPE was proclaimed in January 2014 to help protect a strategic water catchment and crucial biodiversity area of the highly threatened Mpumalanga grasslands and wetlands. In November last year, during a legal challenge to the mine, Shongwe suddenly published a Notice of Intention in the Provincial Gazette to exclude three of the properties that make up the proposed coal mine from the protected environment – a move that would have effectively paved the way for mining. In an affidavit, Shongwe explained that he had been approached during March 2018 by members of the local community with a request to exclude the protected properties. But in mid-December – and equally unexpectedly – Shongwe signed a new notice to withdraw his original Notice of Intention, with no reasons being given for his change of heart. That decision was published in the Provincial Gazette on 25 January. The Centre for Environmental Rights (CER) had filed a 22-page objection to the proposed excision of the coal mining properties from the MPE, pointing out that Shongwe’s plan was to facilitate the development of the proposed Yzermyn coal mine. The CER said that, as part of his initial rationale for wanting to excise the properties from the protected area, Shongwe had included a memorandum dated 6 March 2018 from a Volksrust-based civic organisation, the Voice Community Representative Council, that purported to represent the majority of people living in the Dr Pixley Ka Isaka Seme Municipality. The memorandum, that had raised “serious concerns” about declaring the Mabola Protected Environment, had been accompanied by a petition signed by some 8,500 community members, Shongwe said. However, the CER pointed out in its objection that the petition was dated 30 August 2013, and had been submitted to then environment MEC “Pinky” Phosa when she was considering declaring the Mabola Protected Environment. “The Petition is of little, if any, relevance to the Exclusion Notice presently before the Honourable MEC [Shongwe],” the CER argued. Responding to an invitation by GroundUp to comment, Atha-Africa said it had not made any representations on Shongwe’s original Notice of Intention and did not have any comment on the matter. “Atha is aware that the community of Dr Pixley Ka Isaka Seme opposed the declaration of the Mabola Protected Environment in 2014 and a petition was signed by over 9,000 community members against the declaration. Only the local community can comment if this latest decision to withdraw the notice of intention to exclude properties from Mabola Protected Environment has the community’s buy-in or not,” the company said. However, that careful response was in sharp contrast to what transpired on Twitter. Environmental journalist Elise Tempelhoff posed a question to Atha-Africa senior vice-president Praveer Tripathi on Twitter, asking whether Shongwe’s latest decision meant that Atha-Africa had now “given up” on Mabola. The head of the Voice Community Representative Council, Thabiso Nene, who tweets as @madlokovu15, jumped in with a reply, labelling Tempelhoff’s question “disgusting”. In a second tweet to Tempelhoff, Nene said: “Fun hw u have been absent when community was rejecting CER [Centre for Environmental Rights]. Bt not surprise yo kind tell the story of the elite. Watch the next move of the community. We will not rest till we have our democratic way. Even if Atha give up, community will not quite [quit].” Both Nene’s tweets also tagged Tripathi, who has waged a bitter Twitter war against opponents of Atha-Africa’s proposed coal mine but who insists that his tweets reflect his personal views and not his company’s. Tripathi tweeted several times, tagging both Tempelhoff and Nene. One of his Tweets reads: “If the community gives up it would mean that a handful of foreign funded anti-development anti-people CSO’s [Civil Society Organisations] with media in their support can stop any development and employment with their slick lies. Their tactics are abominable but what’s more sick is that media can’t see it.” In other tweets, he makes new derogatory and defamatory remarks about the CER, which is representing the eight members of a Coalition opposing development of the proposed coal mine. This was despite Tripathi telling the Minerals Council of South Africa (formerly the Chamber of Mines) – in response to a formal complaint to the council by the CER – last year that he would be “more sensitive” in his social media comments about those opposing his company’s attempt to mine coal at Yzermyn.

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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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