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Mine closure, rehabilitation getting more attention from regulators

Wits Centre for Sustainable Mining and Industry director professor Caroline Digby discusses the global challenges in mine closure. Camerawork and Editing: Nicholas Boyd.

27th May 2016

By: David Oliveira

Creamer Media Staff Writer

  

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Regulators worldwide are starting to pay more attention to mine closure and rehabilitation strategies because there are more unplanned closures in this economic cycle and far greater public awareness of the issues concerning mine closure and rehabilitation.

This is according to an international compara-tive assessment of mine closure undertaken in ten jurisdictions, including South Africa and various US and Australian states.

Sharing the study’s findings at a Centre for Environmental Rights seminar on mine closure and rehabilitation earlier this month, University of the Witwatersrand (Wits) Centre for Sustainability in Mining and Industry director Professor Caroline Digby highlighted that regulators had been considering closure strategies only in the past 15 to 20 years, whereas mines simply “locked the gate and walked away” previously, leaving many of the legacy issues that are problematic in mining jurisdictions today.

Some of the challenges revealed by the international comparison included the different cost models, which produced widely different estimates of closure costs and, subsequently, emphasises the need for a standard approach to the calculation of adequate financial provision for rehabilitation. Moreover, there are very few examples of successfully relinquished or closed mines, which, required further scrutiny.

Digby emphasised that, internationally, mine closure had largely focused on environmental impacts, while there had been very little progress in dealing with the social impacts. According to her, South Africa was, in many respects, further advanced than most countries in dealing with the social impacts of mine closure, despite its challenges.

Meanwhile, Department of Environmental Affairs (DEA) integrated environmental manage-ment chief director Dee Fischer discussed the new regulations pertaining to financial provision for prospecting, exploration, mining or production operations published under the National Environmental Management Act (Nema) last year.

She highlighted how the one environmental system, with mining now regulated under Nema, required a new regulatory approach to mine closure.

The new regulations incorporated a much broader view of the life cycle of a mine, including yearly rehabilitation, rehabilitation at closure and rehabilitation of latent or residual impacts that might arise long after mining has stopped.

Nema regulations are more specific about the accurate calculation of financial provision and, importantly, now require a mine at any point of its life to have funds available to pay for rehabilitation costs within a ten-year timeframe. Mining companies traditionally held far less funds in trust for rehabilitation.

The regulations also require involvement of more independent specialists, regular reviews and audits, as well as publication of financial provision and audits on mining companies’ websites. Financial provision should also be signed off by the CEO of a mining company to ensure accountability at the highest level.

Fischer acknowledged that there was resistance from the mining industry to the new regulations, particularly the tax implications of some of the new rules.

However, she indicated a willingness on the part of the DEA to hear criticism from mining houses and civil society stakeholders to clarify and improve the regulations.

Wits School of Law associate professor Tracy Humby said the DEA had “struck out on a bold path” with the new regulations and should be commended for its work.

She highlighted some of the tax complexities and implications for insurance products for mine closure and rehabilitation and elaborated in detail about the challenges of rehabilitation in the context of business rescue and insolvency, particularly the social costs incurred by communities, owing to the lack of proper rehabilitation.

Humby described recent changes in the Environmental Impact Assessment and Financial Provision regulations as a “wave of transparency washing over the mining industry”, owing to the requirement for mining companies to put their environmental authorisation, audits and financial provisions on their websites for affected communities to see.

She commented that South Africa did not have a good model for deciding where not to mine, which caused major problems for closure in places where the environmental or social context should have prohibited mining from taking place at all.

Fischer agreed that regulation through licensing was a way of mitigating inevitable environmental and other damages. She argued, however, that a more proactive approach was needed to identify areas where mining should not be allowed and to better plan the development of mineral resources.

Humby proposed the possibility of doing a strategic environmental assessment to make an informed decision on where mining should and should not take place, as was the case for solar and wind energy projects, as well as fracking currently under way in the Karoo, in the Northern Cape.

She reminded speakers of the “myth” of mine closure, arguing that land restoration to a state similar to what it was before mining started was a denial of the reality that, despite mining being temporary land use, it transformed the geology, ecology and society in the area.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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