The current version of the National Mine Closure Strategy, released for comment by the Department of Mineral Resources and Energy (DMRE) in May 2021, aims to improve the efficiency of water management at mine sites and develop a post-closure mine water strategy.
Environmental organisation the Federation for a Sustainable Future CEO Mariette Liefferink stresses that the organisation has identified and engaged with government to address loopholes in the current closure requirements of the Mineral and Petroleum Resources Development Act (MPRDA), which will be affected by the final National Mine Closure Strategy draft.
“An improved mine closure policy will emanate from this strategy. The 2008 Regional Mine Closure Strategy for the Witwatersrand goldfields was not published, and this delay has had some undesirable impacts,” she stresses.
She adds that this strategy identified the current challenges of local gold miners Sibanye-Stillwater and Gold Fields, specifically regarding the closure application by the Ezulwini mine – owned by Sibanye-Stillwater subsidiary Ezulwini Mining – which is adjacent to Gold Field’s South Deep mine.
She explains that this challenge focuses on the interconnection of mines and how the closure of a mine has a significant impact on the remaining mines in a region.
The cumulative impacts from all the mines closing in a region could potentially be imposed on the last active mine in the area, which, in this case, may be South Deep.
Liefferink says there are several current loopholes in the existing legislation, such as a lack of articulation among the closure requirements in the MPRDA and the process for closing companies, set out in Chapter 14 of the Companies Act (1973).
The MPRDA also places no specific obligation on the court to determine whether a company applying for liquidation has applied for a closure certification; ensured the transfer of environmental liabilities, such as water management; or actually compensated for any shortfall of funds.
Further, the duties and potential liability of the business rescue practitioner (BRP) and liquidators are unclear; this lack of clarity pertains to whether the liquidator is obligated to apply for a closure certificate.
Liefferink does, however, point out that the Department of Forestry, Fisheries and the Environment’s 2021 Draft Regulations for Financial Provisioning propose to address this lack of clarity.
These provisions state that BRPs and liquidators must now also implement the closure plan and mine rehabilitation objectives when a mining company is in liquidation or business rescue.
These provisions are a direct result of the contributions and engagement of the FSE and other similar organisations, she notes.
Liefferink stresses, however, that one of the most serious consequences of liquidation is that the company ceases to exist as a “legal person”.
“The environmental obligations specified in the MPRDA are linked to a holder of a mining right, and this, in turn, is defined with reference to a person. If no person legally exists, these obligations, by extension, cannot be enforced.”
She points out that a common practice for miners to avoid closure commitments is to ‘pass the buck’. This involves selling mines that are close to closure to companies that have fewer resources, which consequently relieves the original miner of the challenges associated with mine closure liability.
This approach, in terms of the custodianship of the closure plan, results in mines being owned by companies that, ultimately, do not have the resources, will or intention to manage mine closure responsibly, she avers.
Another loophole is the complex corporate structures of mining companies that obscure responsibility for mine closures, as listed miners can exit a liability-escalating venture by changing the controlling interest of the corporate entity holding the right.
There is currently no State oversight of this process, Liefferink adds.
“We’ve engaged extensively with the DMRE, and University of Cape Town strategist for the draft mine closure strategy Michael Solomon on the National Mine Closure Strategy.
“We’ve been part of panel discussions and we’ve submitted our written comments on the strategy. “These have been favourably received, and we hope that our comments will be included in the mine water management component of the final mine closure strategy,” she concludes.