October 2009 saw the release of the “report of the Auditor General to Parliament on a performance audit of the rehabilitation of abandoned mines at the Department of Minerals and Energy [DME]”. This stated that, as of the end of May 2008, there were 5 906 abandoned mines in South Africa, most of which had been abandoned before the coming into effect of the 2002 Minerals and Petroleum Resources Development Act (MPRDA). The number of abandoned mines was calculated by the Council for Geoscience, in a report to the DME. The Council further calculated that rehabilitating these abandoned mines would cost about R30-billion – a figure that excluded all costs associated with the treatment of acid mine drainage (including the construction and operation of the necessary processing facilities).

These mines were officially classified as abandoned because no closure certificate had been issued for them and no legal owners for them had been traced. Under the MPRDA, a mine could only be considered closed if a closure certificate was issued for it.

The Auditor General pointed out that abandoned mines were sources of serious risk, including air pollution (dust), combustion in mine workings and dumps and the resultant combustion products, groundwater and surface water contamination by acids as well as metals and salts, and the physical dangers presented by open shafts and unstable slopes. Moreover, there was a high degree of correlation between the location of abandoned mines and areas of high population density. Little wonder that the report stated that “abandoned mines pose a huge health risk to a large section of the South African public.”

“[D]espite the significance and extent of the environmental impact of unrehabilitated abandoned mines, measures were not in place to ensure that abandoned mines were rehabilitated effectively and timeously,” highlighted the report. “This resulted in the environmental and social impacts of these mines not being addressed, a lack of accountability, delays with the progress of planned projects, and inefficient service delivery. … The DME did not have an integrated information system to record and report on the status of mines. This resulted in a lack of accurate, complete and relevant information to classify and systematically target those mines that posed the highest risk to the environment. … The DME did not have policies and procedures on budgeting for rehabilitation projects. The organisational structure of the DME did not support the internal control objectives of the department for the rehabilitation of abandoned mines. … There was no approved strategic or business plan for the rehabilitation of abandoned mines in South Africa.”

That same year – 2009 – the DME was split into two separate ministries – the Department of Mineral Resources (DMR) and the Department of Energy. Until 2014, the environmental  impacts of mining fell under the MPRDA. In that year, the environmental aspects of mining were placed under the National Environmental Management Act (NEMA). Also in 2014, the DMR, the Department of Environmental Affairs (DEA) and the Department of Water and Sanitation began to cooperate more effectively under the “One Environmental System” policy. NEMA was amended to give effect to these changes, which also covered mine closure and rehabilitation issues. In November 2015, regulations (subsequently amended in October 2016) were issued by the DEA under NEMA for financial provisioning for (in the words of the 2016 regulations) “costs associated with the undertaking of management, rehabilitation and remediation of environmental impacts from prospecting, exploration, mining or production operations through the lifespan of such operations and latent or residual environmental impacts that may become known in the future.”

Meanwhile, the requirement to properly close and rehabilitate mines in South Africa is only increasing. In 1980, mining was responsible for 21% of the country’s gross domestic product (GDP); now, it accounts for just 7% of GDP. In 1987, the sector employed more than 760 000 people; today, the figure is less than 400 000. Almost 30 000 mining jobs have been lost since 2014. Fixed investment in South African mining has been declining during the past decade.

As recently as 2016, Witwatersrand University (Wits) Professor Caroline Digby told a Centre for Environmental Rights (CER) seminar that she perceived strong resistance in both the mining industry and the Government to discussing mine closure, as neither wanted mines to close. One area, however, in which South Africa was ahead of much of the rest of the mining world was in considering the social effects of mine closure, as well as the more usually considered environmental impacts.

At the same seminar, Wits Law School Prof Tracy Humby described mine closure as being the equivalent to a hangover. She described the new DEA regulations as being bold, and commended the Department on this. She highlighted that improper or non-existent mine rehabilitation inflected severe social costs on the affected communities. She also noted that the country did not have a good system regarding the determination of locations at which mining should not be allowed. Mining in socially or environmentally inappropriate places only complicated later closure and rehabilitation issues.

The 2015 regulations brought in a series of changes, as far as mine closure and rehabilitation were concerned. Under the MPRDA, to obtain a prospecting or mining right or mining permit, the applicant had to put aside a prescribed amount of money for the rehabilitation process or the management of adverse environmental impacts (otherwise the required Environmental Management Plan would not be approved). But the amount was calculated (and annually updated and reviewed) by the mining company (using DMR guidelines). Also, under the MPRDA key reports could be prepared in-house by, or by external consultants of, the mining company.

Under the amended NEMA, an applicant for prospecting, exploration, mining or production authorisations must meet the required funding provision for rehabilitation, closure and post-closure management of adverse environmental impacts. All licence holders must assess their environmental liabilities every year, and in a prescribed way and, if necessary, increase their financial provisions to the “satisfaction” of the Minister of Mineral Resources.  The financial provision by the mining company must cover annual remediation and rehabilitation as well as the final closure and decommissioning actions, at the conclusion of prospecting, exploration, mining or production activities. It must also cover the management and remediation of residual or latent environmental impacts which might only emerge in the future (including pumping and treating polluted or extraneous water).

There were, of course, other changes in requirements. Under NEMA, an exploration or mining rights holder must have three plans (for each licence): an annual rehabilitation plan; a final decommissioning, mine closure and rehabilitation plan and an environmental risk assessment report (covering residual and latent effects). The above plans have to be compiled and reviewed and assessed by independent external experts. The financial provision for rehabilitation, etc., must be audited by an independent auditor every year. The use of trust funds to provide financially for these obligations are restricted. There is also much more stress, and explicit reporting requirements, regarding water treatment, liabilities, and latent risk assessments. And, not least, the financial provisions must be able to cover a period of ten years after the closure of the mine.

Another important element of the 2015 regulations concerned “care and maintenance” status for mines. These required a mining company to apply to the Minister for an operation to be put into care and maintenance, the application having to contain a detailed explanation of why this was necessary as well as a care and maintenance plan. The Minister could then approve the application, for a period of not more than five years (at which point the approval would have to be renewed), or give written instructions to the mining rights holder to implement measures, with any terms and conditions, determined by the Minister.

DEA Chief Director: Integrated Environmental Management Dee Fischer, also addressing the 2016 CER seminar, pointed out that the One Environmental System had necessitated this new regulatory framework regarding mine closure. The new framework had a significantly wider perspective on a mine’s lifecycle. This wider view included annual rehabilitation as well as rehabilitation at the closure of the mine and the rehabilitation of any residual or latent impacts that could appear, even years after mining had stopped. The new regulations also required the greater use of independent specialists, regular audits and reviews and the publication of these audits and of the financial provisions for closure and rehabilitation on mining company websites. CEOs would also have to sign off these financial provisions. She reported that there had been some resistance to the new regulations from the mining sector (particularly regarding tax implications) but assured that the DEA was willing to listen to criticism from both the industry and civil society groups, to improve the regulations.

The then Chamber of Mines (now the Minerals Council South Africa) did indeed have concerns that it raised. These included the cost of having to retain funds for ten years, the restriction of the use of trust funds to make the financial provision for latent defects, the inclusion of the annual rehabilitation obligation in the financial provision that had to be set aside (this was viewed as amounting to double accounting) and public access to key financial provision documents. Furthermore, regarding care and maintenance, the provisions of the 2015 regulations were, the Chamber warned, possibly “ultra vires” – that is, beyond the powers and authority of the Minister.

Those criticisms were taken onboard by the DEA and in November 2017 amended regulations were published for public comment. The amendments included removing annual rehabilitation costs from the calculations of the financial provisions; re-allowing the use of trust funds for decommissioning, closure and final rehabilitation activities; introducing required methodologies to calculate the financial provision for current and new developments; and the decrease of the period for which financial provision must be made from ten years to three years (or one year with regard to mining permits). Other important amendments were the addition of an obligation to the DMR that it had to notify rights holders if it planned to call up their financial guarantees and state in writing why it was doing so, before it actually issued the demand; the wording for financial guarantees was revised; the care and maintenance provisions were removed; and, regarding the oil and gas sector, minimum content for rehabilitation plans, transitional arrangements and time frames were introduced.

These proposed amendments, in turn, stimulated further concerns, particularly among environmental groups. They objected in particular to the reduction of the period for which financial provision had to be made from ten years to three years, and to the scrapping of the care and maintenance regulations. Care and maintenance is seen as a loophole which allows companies to effectively close mines without rehabilitating them.

As a consequence, this current amendment and consultation process is still under way, and it is not clear if it will be concluded, as hoped, this year. In the meantime, the 2015 regulations remain in effect.

Meanwhile, further NEMA amendment legislation is expected to be gazetted in the near future. (This legislation must not be confused with the regulations which implement the law.) Mine closure and rehabilitation is thus an area that is evolving quite rapidly in South Africa. Its importance to the mining industry, the environment and the economy is clearly significant.