Nuclearisation of Africa - Conference in pictures

Mintails collapse: a case study in how not to close mines Featured

Saturday, 11 August 2018 13:36
Rate this item
(0 votes)

Liquidation leaves a R330-million environmental mess for Gauteng residents, government and other mining companies to clean up. Mark Olalde investigates

Mintails Mining South Africa (Pty) Ltd and several related companies have announced their liquidation, throwing into question the environmental rehabilitation of highly-polluting operations near Johannesburg.

Mintails mines and processes gold from a sprawling, 1,715ha complex of waste piles and open pits in Krugersdorp and has for years been flagged for noncompliance. Its operations are bordered by informal settlements and other communities housing thousands of residents, many of whom have complained of health impacts they blame on radioactive dust and water pollution from Mintails’s mines.

Records show the cost to clean up the environment would be about R330-million, with only an estimated R26-million available, leading observers to fear the situation could deteriorate further as happened at the infamous Blyvooruitzicht Gold Mine, an abandoned large-scale operation on the Far West Rand.

A case study in South Africa’s deeply flawed mine closure system, Mintails teetered on the verge of collapse for years and entered business rescue in October 2015.

Mariette Liefferink, the activist chief executive of the Federation for a Sustainable Environment, has tracked Mintails for more than a decade and is now working to intercede in the liquidation proceedings as the legal voice for what she labels the “mute environment”.

“There was poor planning. [Mintails’s] due diligence was flawed. They overestimated the gold grade and the resource that could be reclaimed,” Liefferink said. “They continued to exploit the resource, to reclaim only the profitable parts and never top up the financial provisions.”

As the company slips into liquidation, it passes the brunt of its environmental liability to taxpayers and, to an extent, to other mining companies.

Business rescue and liquidation

 

After Mintails fought for nearly three years to save the company through business rescue, Dave Lake, the business rescue practitioner, notified the South Gauteng High Court last week of his intention to liquidate the company. A court hearing was scheduled for Tuesday, and a liquidator will be appointed soon.

The business rescue plan called for the refurbishment of a gold ore processing plant, but, according to a memo dated August 1 that Lake sent to the court and to affected parties, it failed when multiple investors ceased funding Mintails.

“There is no longer a reasonable prospect of rescuing the company,” Lake wrote in the memo.

The liquidator will now decide how to pay back creditors with the remaining assets. Environmentalists fear this process could leave environmental liabilities low on the list of what deserves money.

According to the business rescue plan, written in December 2016, Mintails owed various creditors more than R1-billion, including the roughly R300-million shortfall in reclamation funding.

Due to a web of involved companies, it remains unclear if a large portion of the already insufficient financial provisions can be accessed for environmental cleanup.

DRDGOLD Limited formerly held one of the mining rights and the corresponding trust fund that are now in the Mintails group. DRDGOLD chief executive Niël Pretorius said via email he believed that trust fund contained R18-million, but he did not identify the trustees, whose consent is vital to unlocking the money.

Documents show the Mintails group acknowledged rehabilitation would likely cost between R300-million and R336.5-million, but it declined to top up financial provisions.

According to the environmental management programme from one of Mintails’s mining rights: “These liabilities are also historic and pre-date Mintails’s involvement and should thus not be for Mintails’s account.” Experts debate this narrow interpretation of the law.

Lake also wrote in the business rescue plan: “The Mintails Group’s rehabilitation liabilities have remained largely unfunded for some time, and there are simply no free funds available to the [business rescue practitioner] to enable him to immediately provide such funding.”

Rehabilitation fund

Lucien Limacher, an attorney with the Legal Resources Centre, is involved in the proceedings as the Federation for a Sustainable Environment’s counsel. “This is a trend that has been occurring for a couple of years where mining companies have undertaken a business rescue plan or have applied for liquidation because they have failed to really look after the rehabilitation fund,” he said.

On Monday, the Legal Resources Centre sent letters to several government agencies, including the DMR, the Department of Water and Sanitation (DWS) and the Department of Energy, asking them to intervene in the situation and threatening to pursue legal action if the DMR fails to act.

Lake declined to answer questions about the failed business rescue and the liquidation, but he did pen an opinion column in January 2017 for Moneyweb about the case. In it, he laid out his argument for Mintails’s use of business rescue, saying, “Mintails was sick – but it wasn’t terminal.”

Now, though, the situation has become what Liefferink calls “pass the parcel”, with Mintails playing the part of a “scavenger company”, a term coined by researchers to describe under-resourced outfits that buy the scraps left over from larger mining companies and ultimately abandon them.

Oxpeckers previously uncovered evidence that large gold, coal and platinum mines rarely, if ever, properly close in South Africa and found that zero large-scale mines in Gauteng achieved full, legal closure at least between 2011 and 2016.

Mintails’s case will not impact the law that ring-fences financial assurances for reclamation, Limacher said, “But it is precedent-setting in that mines might now start applying for liquidation to avoid paying the cost of rehabilitation.”

Mintails’s West Rand concessions came in part from DRDGOLD, which also re-mines waste piles, and from Mogale Gold (Pty) Limited, which was in judicial management when Mintails acquired it in 2006.

Since then, Mintails engaged in a pattern of environmental degradation.

For example, DWS found in an August 2014 inspection that Mintails transported “slurry/sludge” in unlined trenches, completed insufficient monitoring, spilled slurry from pipelines and implemented no storm water management system at a pollution control dam.

In December 2016, polluted runoff from waste piles was found to be seeping through a dam wall into the Wonderfonteinspruit, which has immediate downstream agricultural uses in the community of Kagiso.

Now, it will largely be up to the liquidator and regulators to protect the environment and public health.

“That is the pattern that seems to be followed in the gold mining industry, and, I assume, would be followed in the coal and platinum mining industries, as well. As soon as a mine is no longer very profitable, it transfers its assets,” Liefferink said. “That seems to have the tacit support of the Department of Mineral Resources.”

The DMR and DWS did not respond to requests for comment on Mintails’s liquidation.

Sinking ship

 

Johan Moolman, the former chief executive of Mintails, declined to comment except to say he quit on June 26 when he learned a new investor bought the company.

That investor, Mvest Capital (Pty) Limited, agreed to purchase Mintails from Paige Limited, with the understanding that Mvest would inject R30-million into the beleaguered mining company to stimulate the business rescue plan.

Mvest decided against handing over the full amount, only paying R5.5-million.

Matthew Moodley, a director at Mvest, responded to questions via email and acknowledged the initial agreement and the R5.5-million payment. He said that after only a month it became apparent the deal would require more investment to succeed.

“With the increased need for working capital in July, Mvest took a decision to withdraw from the transaction,” Moodley said, adding that Mvest ultimately did not “conclude a transaction with Paige”.

“They’re all jumping the sinking ship,” Liefferink said.

Those in civil society fear Mintails will now go the way of the abandoned Blyvooruitzicht Gold Mine, which was once one of the country’s most productive gold operations and is now a source of pollution, violent illegal mining gangs and headaches for adjacent mines.

Mintails has followed a strikingly similar pattern. In the Blyvooruitzicht case, two companies, DRDGOLD and Village Main Reef, almost completed a business deal to sell the nearly-exhausted mine, and both ultimately walked away, claiming the other carried responsibility.

“That whole area, just like Blyvooruitzicht, will be left like it is,” Liefferink said. While neighbouring mining companies will likely have to pump water from the void in Mintails’s absence, consequences from “the dust fallout and the toxic water in the river systems will be carried by communities and by the municipality.” – oxpeckers.org

Additional reporting by #MineAlert manager Tholakele Nene.

Mark Olalde is an Oxpeckers associate and a freelance investigative journalist.

Aerial photography was made possible by The Bateleurs

Link: https://oxpeckers.org/2018/08/mintails-collapse/

Read 14171 times Last modified on Saturday, 11 August 2018 13:52

MINING

Notification of the Withdrawal of the Application of an Amendment of the Environmental Authorisation and Environmental Management Programme for the Sweet Sensation Sand Mining Operation in Free State

The concerted efforts and submissions to the Department of Mineral Resources and Energy (DMRE), the Applicant and its appointed Environmental Assessment Practitioner (EAP) by the Protect Vaal Eden Committee, Vaal Eden community, and the Federation for a Sustainable Environment have resulted in the withdrawal of the application of an amendment of the environmental authorisation and environmental management programme for the Sweet Sensation Sand Mining operation adjacent to the Vaal River.  The EAP was notified by the DMRE that further specialist studies would be required to determine the impact the application for a screening plant and process would have on the environment and that a Regulation 31 amendment process, which involves a public participation process, must be undertaken.  The FSE welcomes the DMRE’s notification. Notification letter attached for download

Pelicam Award for Jozi Gold

The Pelicam Film Festival in Rumania has awarded Jozi Gold a Special Mention.  ...

PRESS RELEASE: REPORT BY SOMO - MINTAILS' STRATEGIES OF DISENGAGEMENT IN SOUTH AFRICA

Mind the Gap consortium launched the new website www.mindthegap.ngo featuring fi...

SA NEWS

"Varkies" gou op hok, maar als nie pluis | Beeld

Article also available for download as an attachment.

Radon Alert - Carte Blanche

Millions of South Africans are exposed to radioactive radon gas in their homes and workplaces every day, as the naturally occurring gas escapes through cracks in the earth. The second leading cause of lung cancer in several countries, radon breaks down and when inhaled, decaying atoms emit alpha radiation that can damage the DNA. There are no safe levels of radon concentration. The United States Environmental Protection Agency emphasises any radon exposure has some risk of causing lung cancer. Carte Blanche investigates why South Africa has no regulations to protect against radon accumulation in the home and what you can do to test your home and prevent lung cancer.   Watch the video here.

WITS Economics & Finance Courses: Mining for Development: The Taxation Linkage

Economics & Finance Courses at the University of the Witwatersrand. Mining for Development: The Taxation Linkage - Understand taxation for development and sustainability in mining. View the course here. Enrolment starts on the 7th of October 2019.

Mining activists in SA face death threats, intimidation and harassment - report

SATURDAY STAR | 19 APRIL 2019, 7:41PM | SHEREE BEGA Picture:Yvette Descham On August 13 2013, Billy M heard gunshots at the gate of his house. He didn't know who fired the gun, and, worried that local traditional leadership might be involved, he didn't report the incident to the police. For the next five years, the community activist from Fuleni, a small rural village in KwaZulu-Natal bordering one of SA's oldest and largest wilderness areas, the Hluhluwe iMfolozi Park, continued to receive threats.  "We know our lives are in danger. This is part of the struggle," he says, simply. Billy M's account is contained in a new report released this week, 'We know Our  Lives Are in Danger’: Environment of Fear in South Africa’s Mining-Affected Communities, which documents how community activists in mining areas face harassment, intimidation and violence. The report details how in Billy M's case, mining company Ibutho Coal had applied for rights to develop a coal mine in Fuleni in 2013. The development would have required the relocation of hundreds of people from their homes and farmland and destroy graveyards. "The mine's environmental impact assessment estimated that more than 6000 people living in the Fuleni area would be impacted. Blasting vibration, dust, and floodlights, too, could harm the community," says the report."During the environmental consultation processes, Billy M led opposition that culminated in a protest by community members in April 2016."The company reportedly abandoned the project in 2016 while another firm, Imvukuzane Resources is reportedly interested in mining in the area.The 74-page report, compiled by Human Rights Watch, the Centre for Environmental Rights (CER), groundWork, and Earthjustice, describes a system designed to "deter and penalise" mining opponents.The authors conducted interviews with more than 100 activists, community leaders, environmental groups, lawyers representing activists, police and municipal officials, describing the targeting of community rights defenders in KwaZulu-Natal, Limpopo, Northwest, and Eastern Cape between 2013 and 2018. They report intimidation, violence, damage to property, the use of excessive force during peaceful protests, and arbitrary arrest for their activities in highlighting the negative impacts of mining projects on their communities. "The attacks and harassment have created an atmosphere of fear for community members who mobilise to raise concerns about damage to their livelihoods from the serious environmental and health risks of mining and coal-fired power plants," write the authors."Women often play a leading role in voicing these concerns, making them potential targets for harassment and attacks."But municipalities often impose barriers to protest on organisers that have no legal basis while government officials have failed to adequately investigate allegations of abuse."Some mining companies resort to frivolous lawsuits and social media campaigns to further curb opposition to their projects.  The government has a Constitutional obligation to protect activists," write the authors. Picture: Shayne Robinson, Section 27 Authorities should address the environmental and health concerns related to mining "instead of harassing the activists voicing these concerns,” remarks Matome Kapa, attorney at the CER.The report starts with the high-profile murder of activist Sikhosiphi “Bazooka” Rhadebe, who was killed at his home after receiving anonymous death threats in 2016. Rhadebe was the chairperson of the Amadiba Crisis Committee (ACC), a community-based organisation formed in 2007 to oppose mining activity in Xolobeni in the Eastern Cape.  "Members of his community had been raising concerns that the titanium mine that Australian company Mineral Commodities Ltd proposed to develop on South Africa’s Wild Coast would displace the community and destroy their environment, traditions, and livelihoods. More than three years later, the police have not identified any suspects in his killing."Nonhle Mbuthuma, another Xolobeni community leader and spokesperson of the ACC, has also faced harassment and death threats from unidentified individuals. "I know I am on the hit list.… If I am dying for the truth, then I am dying for a good cause. I am not turning back," she says.But other mining areas have had experiences similar to that of Xolobeni. "While Bazooka’s murder and the threats against Nonhle have received domestic and international attention, many attacks on activists have gone unreported or unnoticed both within and outside the  country."This is, in part, because of "fear of retaliation for speaking out, and because police sometimes do not investigate the attacks", the authors found.The origin of these attacks or threats are often unknown. "So are the perpetrators, but activists believe they may have been facilitated by police, government officials, private security providers, or others apparently acting on behalf of mining companies. "Threats and intimidation by other community members against activists often stem from a belief that activists are preventing or undermining an economically-beneficial mining project. In some cases, government officials or representatives of companies deliberately drive and exploit  these community divisions, seeking to isolate and stigmatize those opposing the mine."The Minerals Council South Africa, which represents 77 mining companies, including some in the research areas, responded that it “is not aware of any threats or attacks against community rights defenders where (its) members operate”.The authors state that while the mining sector and the government emphasise how mining is essential for economic development, "they fail to acknowledge that mining comes at a high environmental and social cost, and often takes place without adequate consultation with,or consent of, local communities".The absence of effective government oversight means that mining activities have harmed the rights of communities across South Africa in various ways. "Such activities have depleted water supplies, polluted the air, soil, and water, and destroyed arable land and ecosystems."Researchers also documented cases of police misconduct, arbitrary arrest, and excessive use of force during protests in mining-affected communities, "which is part of a larger pattern in South Africa".Last year, the Centre for Applied Legal Studies (CALS) at Wits University documented various efforts by traditional authorities to stifle opposition to mines in their communities. "In some cases, traditional authorities label those opposing mines as anti-development and troublemakers, thus alienating and stigmatising them.As a result, community members are often afraid to speak out against a mine in open consultations," CALS found.Research by the SA Human Rights Commission, too, has found that community members sometimes “are afraid to openly oppose the mine for fear of intimidation or unfavourable treatment (by the Traditional Authority)."The SAHRC says many mining-affected communities are experiencing “the creation of tension and division within communities as a result of mining operations.Sometimes, threats and intimidation against activists come from community members who have been promised economic benefit from the proposed project or are politically allied with the government or traditional authority."Local communities often do not benefit from mining activities, says the report. "Although South African law requires the development of social and labour plans (SLPs) that establish binding commitments by mining companies to benefit communities and mine workers, CALS has documented significant flaws in the development and implementation of SLPs."Despite the environmental and social costs of mining, the government is not adequately enforcing relevant environmental standards and mining regulations throughout South Africa. The SAHRC has found that the Department of Mineral Resources (DMR) often fails to hold mining companies accountable, "imposing few or no consequences for unlawful activities and therefore shifting the costs of pollution to local communities."Compliance with regulatory obligations, as well as monitoring and enforcement of such responsibilities, remains a crucial concern in the context of mining activities," says the SAHRC, noting how the DMR and other governmental agencies often do not respond to complaints filed against mines by community members.The report's authors describe how the lack of government action and oversight has also helped make the mining industry one of the least transparent industries in South Africa. Information that communities require to understand the impacts of mines and to hold mining companies accountable for harmful activities is often not publicly available. "Such information includes environmental authorisations, environmental management programs, waste management licences, atmospheric emission licences, mining rights, mining work programmes, social and labour plans, or compliance and enforcement information."The only way to access such information is through a request under South Africa’s access to information law, a procedure that the World Health Organisation has called 'seriously flawed' and which the DMR regularly flouts. In addition, mining companies and the government rarely consult meaningfully with communities during the mining approval process, resulting in uninformed and poor government and industry decisions that do not reflect community perspectives or have their support," says the report.The authors assert how the threats, attacks, and other forms of intimidation against community rights defenders and environmental groups have created an environment of fear "that prevents mining opponents from exercising their rights to freedom of opinion, expression, association, and peaceful assembly, and undermines their ability to defend themselves from the threats of mining".In its November 2018 review of South Africa’s compliance with the International Covenant on Economic, Social and Cultural Rights, the UN Committee on Economic, Social and Cultural Rights expressed concern about “reports of human rights defenders, particularly those working to promote and defend the rights under the Covenant in the mining and environmental sectors, being threatened and harassed". It recommended that South Africa provide a safe and favourable environment for the work of human rights defenders to promote and protect economic, social, and cultural rights, including by "ensuring that all reported cases of intimidation, harassment, and violence against human rights defenders are promptly and thoroughly investigated and the perpetrators are brought to justice". Mining activist Mariette Liefferink, who made submissions to the UN committee, tells how it has become increasingly difficult to work as an environmental rights defender in South Africa.   "There is an overwhelming body of evidence of intimidation, whether it is by means of frontal attacks or more insidious attacks on activists."International and South African law requires South Africa to guarantee the rights of all people to life, security, freedoms of opinion, expression, association, and peaceful assembly, and the rights to health and a healthy environment, say the authors."The attacks, threats, and obstacles to peaceful protest described in this report prevent many community activists in South Africa from exercising these rights to oppose or raise concerns about mines, in violation of South Africa’s obligations." 

WATER

Development of the National Eutrophication Strategy and Supporting Documents

Attached documents:1. DWS Eutrophication SA & GA PSC 1 BID2. PSC 1 Meeting Agenda - Eutrophication Strategy3. Issues and Response Register - Inception Report Comments

Fears of long term damage to SA's water supply as eutrophication strangles rivers and dams | IOL

Toxic green algae in the Vaal River is caused by eutrophication, which harms wat...