Data released by national statistical service Statistics South Africa indicate that the mining sector continues to contribute substantially to the country’s gross domestic product, owing to the high commodity prices of gold, platinum-group metals and iron-ore, says Vahlengwe Mining Advisory CEO Sunday Mabaso.

Economic growth stemming from the gold mining industry over the last two years has seen various mining houses declare healthy profits in yearly performance reports, which indicates that mining companies can pursue abandoned gold mining assets that have closed, owing to liquidation and grade-related reasons, he explains.

“Blyvoor Gold Operations, Central Rand Gold Mine and Mintails are examples of gold mining assets that were abruptly discontinued owing to liquidation, which subsequently exposed local communities to environmental and social risks. The adverse effects they pose remain unaccounted for, causing challenges for stakeholders, namely regulators, local municipalities, landowners, property developers and communities at large.”

Mabaso cautions that the primary challenge facing stakeholders is that these mines were closed without financial commitment towards rehabilitation of the area after the closure of the mine, despite this being a requirement of the Department of Mineral Resources and Energy (DMRE).

He adds that there is a disconnect between the Minerals and Petroleum Resources Development Act (MPRDA) and the Companies Act regarding liquidated mining companies, which has, consequently, limited the DMRE’s ability to enforce post-closure requirements.

He argues that Section 28 of the National Environmental Management Act (Nema) empowers the DMRE as a competent authority to hold the directors of the liquidated mining companies to account for environmental damages; however, this has to-date not proven to yield the required accountability owing to reasons such as transitional arrangements in the MPRDA and Nema.

Mabaso notes that the draft Mine Closure Strategy proposes strategic plans that can be implemented to remedy the challenges caused by current mine closures in terms of ensuring future sustainable development – an issue that remains challenging for regulators to resolve, owing to abandoned mines.

“It is encouraging to see that companies, such as Pan African Resources and Amatashe Mining, have shown an interest in pursuing some of the assets mentioned. “This will grant regulators the opportunity to rectify the loopholes and ensure that there is a full implementation of closure requirements to allow for sustainable livelihoods post-mine closure, as proposed in the draft Mine Closure Strategy which has been published by the DMRE for comments.”

He adds that interest shown by mining companies in reviving gold mining assets should be welcomed by all stakeholders, owing to the opportunities this can create, such as job creation, implementation of mine closure strategies by the DMRE and for prospective miners to advance environmental, social and corporate governance strategies (ESG) and investments.

Mabaso also explains that the gold mining industry has aided economic development in Johannesburg and that stakeholders are encouraged to support ESG investments to mitigate economic hardships caused by the Covid-19 pandemic through job creation, local economic development and enabling sustainable livelihoods in local communities.

The support for ESG investments in the gold mining industry can potentially attract investments in the gold sector to “return glory to what was previously the cornerstone of South Africa’s mining industry”, he concludes.