‘Early access to funding could improve mine rehabilitation’

9th December 2016 By: David Oliveira - Creamer Media Staff Writer

Clarity on mine rehabilitation requirements and access to rehabilitation funds have been significant hurdles to effective restoration of the environment while mining takes place, says independent environmental auditor Dr Mike Mentis.

He explains that the National Environmental Management Act regulations on mining rehabilitation and closure funding require an annual rehabilitation audit with updated closure plans and costing. “To access rehabilitation trust funds, a mine needs a comprehensive review of what it has done and a plan of what it intends to do. These are financial and technical challenges.”

The reports comprising the review are used to revise the financial provisions of the rehabilitation trust to ensure economic factors such as escalation and inflation have not rendered it insufficient.

Mines currently receive access to funds that are equal to a company’s contribution to a trust fund or a financial guarantee from a financial institution once a closure certificate has been granted by the Department of Mineral Resources (DMR). This places the financial burden of concurrent rehabilitation on mining companies.

“Containing the costs of concurrent rehabilitation is difficult for mining companies, particularly since profit margins have thinned significantly, owing to the current depressed commodities market,” Mentis highlights.

However, he notes that the DMR’s stance on releasing funding only upon receipt of a mine closure certificate is understandable, as there have been instances of fly-by-night mining companies that have “vanished” without conducting any rehabilitation to their mine sites. This leaves the land scarred and unusable and, if rehabilitation does ultimately take place, tax payers’ money is used to restore land for agricultural or grazing use.

“The present legal arrangement that the DMR has set up makes a lot of sense. We know that, in the past, rehabilitation was inadequate and companies walked away from their obligations,” Mentis laments, adding that the situation of funding and ensuring that land rehabilitation takes place often leads to a Mexican standoff between mining companies and the DMR.

He suggests that companies might be more willing to rehabilitate mines if access to funding was made while concurrent rehabilitation takes place, which could also lead to better rehabilitation.