Government task team on mine closure and water management
A government task team on mine closure and water management was established by the directors-general of the Departments of Minerals and Energy (DME) and Water Affairs and Forestry (DWAF) in August 2005 to facilitate decision making on water management and related problems. It was also set up to implement safe and sustainable mine closure options within mining areas in South Africa.
Three government departments are represented on the task team. They are DME, the DWAF and the Department of Environmental Affairs and Tourism (DEAT). Currently, the task team is chaired by the DME. It may co-opt other members from other government departments as may be required from time to time.
To achieve its objectives, the task team will facilitate high-level decision-making on water management and related problems, as well as the implementation of sustainable mine closure options within the following identified areas:
- Klerksdorp-Orkney-Stilfontein-Hartbeestfontein (KOSH) gold-mining area;
- Witwatersrand gold-mining area; and
- Other areas of concern to be identified within South Africa.
Members of the task team will be responsible for making recommendations to the Directors-General and top management of the relevant government departments on policy and legislative issues as well as any other intervention that may be required.
The task team is responsible for establishing short-, medium- and long-term goals for the mining industry in addressing the challenges of mine-water management and the implementation of sustainable mine closure options. These decisions are then filtered down to those responsible for administering and implementing the legislation in various regional or provincial government departments and other relevant bodies.
The establishment of the task team strengthens all communication between the relevant government departments.
Click here to see the communication structure [PDF, 21kb].
Following the main objective of the task team, the members will also:
- Make decisions on applicable legislative tools and strategies;
- Oversee the establishment of working groups and the execution of functions through the differentiation between operational and policy issues and the implementation thereof; and
- Facilitate the integration of existing and new research programmes being undertaken by government departments and share this information.
Through research, a series of guidelines was developed to enable this directorate to strategically advise on mine environmental management matters. These guidelines include:
State assistance to marginalised gold mines
To fully understand State assistance to marginalised gold mines, and the conditions under which state subsidies are made, it is necessary to revisit history. In 1967, the Cabinet of South Africa established a grant to assist economically marginal gold mines that were hard hit by a vastly fluctuating Rand/dollar exchange rate and gold price.
The gold reef in the old Transvaal, or what is today Gauteng, has been undermined extensively and almost all the gold mines are connected. The gold reef is also characterised by significant amounts of water occurring naturally in the reef and surrounding rock. This water collects in the underground excavations made by mines. As the mines are interconnected, the water follows its gravitational inclination and collects at the lowest point. It follows then that some mines, to the south of the gold reef and at deeper levels than others, suffer the consequences of this upstream mining. The effect is so large that the pumping of this water to allow access to the reef and to ensure the safety of workers, becomes a major capital expense for the mine involved. Simply put, the mines on the south side of the reef spend a lot of money installing pumps and paying for electricity to keep mining.
As a result, these costs are major part of the operating expenses of the mines in these regions. This was already the case in 1967. Thus the motivation for Cabinet to allow the grant for pumping assistance for such mines which, because of fluctuations in the gold price and exchange rate, become temporarily unprofitable. Even in the sixties, it was more desirable to support such mines than to allow the surrounding communities to absorb the social and economic effects of thousands of labourers losing their jobs.
This decision by the government is still in place and an annual budget is set aside for such pumping assistance.
However, a mine that has historically dealt with the brunt of upstream water underground does not automatically qualify for the grant. The grants are made on a case-by-case basis by the Interdepartmental Committee (IC Committee) for State Assistance to Marginalised Mines. This committee is made up of officials from the departments of Minerals and Energy (DME), Water Affairs and Tourism (DWAF), Land Affairs (DLA), the National Treasury, the South African Revenue Service and others.
The guidelines, within which the committee may consider grants to marginal mines, are very clearly laid out. In terms of the Cabinet instruction, the panel must consider 13 different fields, each with its own subdivisions. Factors considered include:
- Social and economic impact;
- Mine economic management;
- Labourer safety;
- Environmental impacts;
- Rand/dollar exchange rate;
- The gold price; and
- The cost of production.
It should be noted that this committee only recommends the grant to the
Director-General of Minerals and Energy, who is then responsible for taking a final decision.
Grants for water subsidy are considered on a case-by-case basis during the course of each financial year. These grants are paid out monthly against verified expenses for actual pumping. This is merely assistance with the pumping bill, in terms of the Cabinet mandate, and no other expenses may be claimed against this account.
Until Cabinet changes its mandate on the State assistance or grants, the DME must continue to assess applications for grants and the recommendations made by the IC Committee. Obviously, fluctuations in the Rand/dollar exchange and the gold price as well as serious socio-political considerations with regard to possible unemployment will weigh heavily on future decisions with regard to further grants to any mine for that matter.
The pumping subsidy is merely administered by the DME because much of the local knowledge and expertise that go into the preparation of assistance recommendations and the evaluation of economic conditions, reside within the department. The department is, in this regard, the tool of the Cabinet.
See the top of the page for more about the government task team on
mine closure and water management.
