S U S TA I N A B I L I T Y
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VOLUME 14 NO. 04
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NOVEMBER 2021
Renewable Energy A key enabler for African mines
Mine Closure Identifying key challenges
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anywhere, anytime with
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Illegal Mining The vicious circle of unfair competition ISSN 1999-8872 • R55.00 (incl. VAT)
Despite the dynamics of and challenges experienced while operating under the far reaching impact of the COVID-19 pandemic, the National Energy Regulator of South Africa (NERSA) has been able to continue with its operations to ensure the orderly development of the energy sector, mainly through licensing, setting and approving of prices and tariffs, compliance monitoring and enforcement, and dispute resolution in the electricity, piped-gas and petroleum pipelines industries. With the realisation that this pandemic will be prevalent for the foreseeable future, NERSA endeavours to be more innovative and agile in ensuring that we continue to make a valuable contribution to the socioeconomic development and prosperity of the people of South Africa, by regulating the energy industry in accordance with government laws, policies, standards and international best practices in support of sustainable development.
Mr Smunda Mokoena
Adv Nomalanga Sithole
Chairperson
Chief Executive Officer and Full-Time Regulator Member
NERSA is a regulatory authority established as a juristic person in terms of section 3 of the National Energy Regulator Act, 2004 (Act No. 40 of 2004). NERSA’s mandate is to regulate the electricity, piped-gas and petroleum pipelines industries in terms of the Electricity Regulation Act, 2006 (Act No. 4 of 2006), Gas Act, 2001 (Act No. 48 of 2001) and Petroleum Pipelines Act, 2003 (Act No. 60 of 2003). NERSA’s mandate is further derived from written government policies and regulations issued by the Minister of Mineral Resources and Energy. NERSA is expected to perform the necessary regulatory actions in anticipation of and/or in response to the changing circumstances in the energy industry.
Nhlanhla Gumede
Nomfundo Maseti
Full-Time Regulator Member: Electricity
Full-Time Regulator Member: Piped-Gas
The Minister of Mineral Resources and Energy appoints Members of the Energy Regulator, comprising Part-Time (Non-Executive) and Full-Time (Executive) Regulator Members, including the Chief Executive Officer (CEO). The Energy Regulator is supported by staff under the direction of the CEO.
@NERSAZA
@NERSA_ZA
Muzi Mkhize
Ms Zandile Mpungose
Full-Time Regulator Member: Petroleum Pipelines
Part-Time Regulator Member
Kulawula House, 526 Madiba Street, Arcadia, 0083 P O Box 40343, Arcadia, 0007 Tel: 012 401 4600 | Fax: 012 401 4700 Website: www.nersa.org.za Email: info@nersa.org.za
Fungai Sibanda Part-Time Regulator Member
THE SUSTAINABILITY ISSUE | 2021
CONTENTS FRONT MATTER Editor’s comment............................................................................................................................2 Contributors......................................................................................................................................4 Foreword.............................................................................................................................................6 COVER STORY Power up anywhere, anytime with EcoFlow .................................................................8
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EQUIPMENT Weighing systems for accurate loading..........................................................................................10 ENERGY African power project boon?................................................................................................ 12 Renewable energy a key enabler for remote mines in Africa............................ 15 Ergo’s surface tailings retreatment.....................................................................................20
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MINE CLOSURE 3 mine closure challenges… and how to overcome them.................................. 21 Mine closure plan – a living, iterative effort..................................................................22 Identifying key challenges associated with mine closure........................................25 Responsible mine closure through research.................................................................29 Mine closure and rehabilitation – getting it right.......................................................30
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RESPONSIBLE MINING A partnership to keep girls in school...............................................................................33 Tighten the ESG focus or face litigation..........................................................................34 Shift towards sustainable mining increases....................................................................36 World Gold Council members commit to TCFD reporting..............................40 SLP projects for Rustenburg community....................................................................... 41
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SBPM initiatives to empower communities..................................................................43 Illegal mining: The vicious circle of unfair competition............................................44 Water projects to reduce fresh water usage...............................................................47 Advancing social and environmental sustainability with UNGC......................48 Global Industry Standard on Tailings Management..................................................50 Underground air quality management............................................................................. 51 Sustainable mining with DynaPrime liners.....................................................................52
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EDITOR’S COMMENT
MINERS step up TO ENHANCE SUSTAINABILITY The mining industry continues to show that it is no longer an industry with a reputation of digging holes, destroying the environment and leaving communities destitute. Mining companies walk the talk when it comes to sustainability in the industry.
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istorically, issues pertaining to sustainability in the mining industry were often considered a ‘nice to have’ rather than a requirement. This has unfortunately given the industry a bad reputation among communities and environmentalists globally. Even when mines were seen to be making a concerted effort to do right by the community and environment, some simply dismissed the efforts as a mere PR campaign. According to Sustainability Reporting in the Mining Sector – Current Status and Future, a report by the United Nations Environmental Programme (UNEP), the mining and metals industry was under a lot of pressure to improve its environmental and social performance during the mid-1990s to the early 2000s. It can be argued that there are still some companies who remember to do the right thing only when the eyes of the world and media are watching. This should not be the case, as mining companies have an obligation to the surrounding community and environment, as well as their employees.
Prioritising sustainable mining There is no denying that the mining industry has multiple benefits for economies and host communities across the world. Indeed, some economies have been built on the mining industry. Minerals Council South Africa’s recently released Facts and Figures 2020 shows EDITOR Dineo Phoshoko (dineo.phoshoko@3smedia.co.za) HEAD OF DESIGN Beren Bauermeister DESIGNER Janine Schacherl CHIEF SUB-EDITOR Tristan Snijders PRODUCTION & CLIENT LIAISON MANAGER Antois-Leigh Nepgen GROUP SALES MANAGER Chilomia Van Wijk PRODUCTION COORDINATOR Jacqueline Modise DISTRIBUTION MANAGER Nomsa Masina DISTRIBUTION COORDINATOR Asha Pursotham BOOKKEEPER Tonya Hebenton
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SUBSCRIPTIONS subs@3smedia.co.za ADVERTISING SALES Amanda De Beer Tel: +27 (0)72 600 9323 / +27 (0)87 802 5466 Email: amanda.debeer@3smedia.co.za PUBLISHER Jacques Breytenbach 3S Media 46 Milkyway Avenue, Frankenwald, 2090 PO Box 92026, Norwood 2117 Tel: +27 (0)11 233 2600 www.3smedia.co.za
that the mining sector employs approximately 451 427 people and contributed R361.6 billion to South Africa’s GDP. This is a clear indication of the importance of the mining sector, especially for developing countries. Despite these and many other benefits, the industry needs to increase its efforts when it comes to sustainability. The UNEP report further states that “mining and mineral extraction frequently comes at a high environmental and social cost”. Among these costs are soil erosion, climate change, gender inequalities and child labour. To a great extent, many such challenges are rooted in the mining industry and it is only fair that the industry works hard to address them. The mining industry has proven its commitment to sustainable mining through various initiatives in host communities. It is encouraging to see how mines are giving attention to social issues that are not directly related to their commercials. It is even more encouraging to see a collaborative approach between mines, employees, communities, unions, government and other important stakeholders when it comes to addressing the challenges that affect communities and the environment. Government’s engagement with mine companies and other stakeholders is key to achieve success when it comes to sustainability in the industry.
Dineo Novus Holdings is a Level 2 Broad-Based Black Economic Empowerment (BBBEE) Contributor, with 125% recognised procurement recognition. View our BBBEE scorecard here: https://novus.holdings/sustainability/transformation ISSN 1999-8872 Inside Mining. © Copyright 2021. All rights reserved. All material herein Inside Mining is copyright protected and may not be reproduced either in whole or in part without the prior written permission of the publisher. The views of the authors do not necessarily reflect those of the publisher.
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CONTRIBUTORS
A WORD FROM THE INDUSTRY EXPERTS Page 6
Page 12
“Everything we do in the mining industry today is geared towards ensuring a safer and more productive tomorrow.”
“Power generation is a naturally competitive business, and the ownership thereof should ideally be widely distributed – not monopolised by the state.”
Mongezi Veti, executive head: Sustainability at Exxaro
Shamilah Grimwood-Norley, head: Banking and Finance at Bowmans
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Page 22
“Most remote mines in Africa operating off-grid are dependent on fossil fuels as their main source of power.”
“Responsible mine closure remains a fundamental aspect of the mining sector’s sustainability approach.”
Leon Louw, editor and founder of WhyAfrica
James Lake, partner and principal scientist at SRK Consulting
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Page 25
“Truly transformative mine closure and rehabilitation processes will demand greater community inclusion as a prerequisite for legitimacy.”
“Artisanal and small-scale mining is a key issue that is not usually included in discussions of mining closure and rehabilitation.”
Louise Scholtz, senior programme manager: Urban Futures at WWF
Tracey Cooper, executive director of Mining Dialogues 360°
COVER SPONSOR This issue’s cover was sponsored by EcoFlow. Get in touch with Inside Mining’s sales team to sponsor the upcoming issue of the magazine. Contact Chilomia Van Wijk (+27 11 233 2627/ Chilomia.VanWijk@3smedia.co.za) or Amanda De Beer (+27 11 233 2612/Amanda.DeBeer@3smedia.co.za).
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THE SUSTAINABILITY ISSUE | 2021
CONTRIBUTORS
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Page 25
“South Africa is home to a range of systemic issues that bedevil orderly mine closure and rehabilitation.”
“Regulatory reform is needed to dissuade these practices and incentivise orderly and effective processes of closure and rehabilitation.”
Khodani Mulaudzi, former research and project coordinator: Policy and Futures at WWF
David Perkins, development economist at Mining Dialogues 360°
Page 34
Page 34
“Social and investor pressure on mining and energy companies to report on ESG and consider renewable energy is immense.”
“As ESG continues to grow in importance, the number of ESG litigation matters will become self-perpetuating.”
Merlita Kennedy, partner at Webber Wentzel
Tobia Serongoane, associate at Webber Wentzel
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Page 36
“Miners are also seeking to play a greater role in the communities in which they operate.”
“Sustainable finance solutions will play an important role in helping Africa’s mining industry to adapt and attract capital from an investor base.”
Mark Buncombe, former head: Mining and Metals at Standard Bank
Nigel Beck, head: Sustainable Finance and ESG at Rand Merchant Bank
Page 44 “Illegal, non-compliant operations have unsafe, unhealthy and dangerous working conditions.” Nico Pienaar, director of ASPASA
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FOREWORD
MINING FOR A
SUSTAINABLE FUTURE
As we approach the 2021 UN Climate Change Conference (COP26), I can unequivocally state that climate change is among the most pressing phenomena of our age. As a result, businesses have revisited the way they conduct their operations. By Mongezi Veti*
Mongezi has been in the mining industry for more than 30 years
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ver the course of history, the mining sector has been perceived universally as negligent in exploiting natural resources at all costs. I can therefore understand why mining companies have had a bad reputation considering the legacy of environmental damage and the socio-economic degradation of communities left in their wake, after the life of mine. As a historic carbon-based commodities producer, we are cognisant of the moniker ‘dirty coal’ and its perceived risks across the investor landscape, together with the pressure for decarbonisation and resource efficiency.
SDGs and clean energy In line with the UN’s Sustainable Development Goals (SDGs), the mining industry is committed to managing the risks that carbon emissions pose to climate change. For example, Exxaro is in favour of the Climate Change Response Strategy – which includes resource efficiency
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and decarbonisation. As an industry, mining can achieve this vision in a responsible, risk-adjusted and measured manner, to diversify earnings and thereby reduce its carbon footprint. Exxaro is no stranger to clean energy; we have been a player in the sector for the past 10 years through our investment in Cennergi – the second-largest independent power producer in South Africa. This move is part of our new focus to build a resilient, carbon-neutral portfolio by 2050 aligned to the Just Transition – a global framework that aims to secure the livelihoods of workers and their communities in the transition to a low-carbon economy. The company uses its mining expertise to supply low-carbon minerals that power a cleaner world while providing shareholders with solid returns. These mineral operations supplemented by the predictable increasing income from the renewable energy business will represent 50% of expected coal EBITDA within 10 years.
THE SUSTAINABILITY ISSUE | 2021
FOREWORD
Everything we do in the mining industry today is geared towards ensuring a safer and more productive tomorrow
Everything we do in the mining industry today is geared towards ensuring a safer and more productive tomorrow. Our sustainability should be founded on creative, mutually constructive relationships and common values with stakeholders. As miners, we conduct our business activities in a way that creates success, not only for our companies but for broader society, especially our host communities. From how we mine to what we mine – we’re stewarding our natural assets and social capital to uplift our communities by helping to provide access to healthcare, education, safety and environmental rehabilitation.
Sustainability initiatives Initiatives such as the Climate Change Response Strategy are integral to sustainable growth and impact strategies. Having regard for a holistic and integrated approach to the attainment of sustainability as a strategic imperative, the mining industry is committed to continuing its role
in effectively transitioning the economy towards a lowcarbon future. This focus is more important than ever, as developing countries – including South Africa – are particularly vulnerable to climate change, often suffering the most from the devastating impact of droughts, storms, floods and rising sea levels. I am confident that as we continue to maintain our unwavering support for good environmental, social and corporate governance by ensuring compliance with all relevant statutes and regulatory frameworks, we can build resilience and negate the pending environmental catastrophe. It is our enduring purpose to power better lives and lay the foundations for a more sustainable and equitable South Africa – and ensure a cleaner, greener planet in which all citizens can thrive. *Mongezi Veti is executive head: Sustainability at Exxaro.
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COVER STORY
Power up anywhere, anytime with Delta Max can handle devices up to 3 400 W
Consistent electricity supply is essential for mines to operate optimally. However, the availability of electricity is not always guaranteed – therefore, backup power supply is required. EcoFlow’s range of power generators equips consumers with clean, quiet and renewable power.
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ower supply challenges in South Africa have led to frequent blackouts, which have negatively impacted many industries including the mining industry. Any downtime – especially caused by power cuts – can lead to losses worth millions for mine operations. It is therefore imperative that backup energy be available for scenarios where there is no electricity.
How it all started EcoFlow was founded in 2017 by entrepreneurs who emerged from a leading drone developer where they had worked to perfect the drone battery to be lightweight, long-lasting and powerful. Now, EcoFlow leverages this knowledge and experience to build products that are thoughtful in design – creating industry-first, smart and powerful energy storage products. The EcoFlow team strives to reinvent the way people access power wherever they are. Using its latest unique technology, the company’s product offering equips the consumer with an industrial amount of clean, quiet and renewable power – which is the perfect backup power solution for various applications, including mining.
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River, Delta and Delta Max series The EcoFlow River can power up to nine devices simultaneously. With two pure sine wave AC outlets, the EcoFlow River can power some devices up to 1 800 W with the X-Boost mode on. With a capacity of 288 Wh, the EcoFlow River provides enough juice to run essential devices for hours, depending on the actual output. With EcoFlow’s patented X-Stream Technology, the smart inverter enables a fast rechargeability that takes less than an hour to charge from 0% to 80%, and is fully charged in 1.6 hours. There is an option to change to a quieter charging condition by turning on the ‘Quiet Charging’ status on the app. The capacity can be doubled from 288 Wh to 576 Wh with an extra battery. Designed for mobility, the 5 kg solid, yet lightweight, EcoFlow River is slightly larger than a toaster, which is perfect to carry around. The EcoFlow Delta power station represents the new standard of battery-powered generators. Compatible with a wide range of devices, one can stay powered for hours, whenever and wherever. This generator can be fully recharged by solar panels in about four hours, and fully charged through a 12/24 V car port in under 10 hours.
THE SUSTAINABILITY ISSUE | 2021
COVER STORY
Nine devices can be powered simultaneously by EcoFlow’s River generator
With four AC outlets (1 800 W total) and 1 260 Wh capacity, the large inverter load enables EcoFlow Delta to power most heavy-duty DIY tools under 1 800 W (3 300 W surge, pure sine wave). This generator can power up to 11 devices simultaneously. EcoFlow’s patented X-Stream technology enables the EcoFlow Delta to recharge at 10 times the speed of most portable power stations on the market. Ideal for tools below 1 800 W, both the EcoFlow River and Delta generators are suitable for power tools and accessories used in the mining industry. Common industry power tools and accessories include circular saws, LED lantern lights, grinders, as well as power drills and wrenches. For heavy-duty applications, there is the new EcoFlow Delta Max, which expands up to 6 kWh with smart extra batteries. With X-Boost, Delta Max handles devices up to 3 400 W with ease. It is ideal for tools such as the handheld rock drills and steel grinders commonly used in the mining industry.
Additional features EcoFlow’s technological innovation goes beyond generators. The team has developed an app that enables users to control and monitor the EcoFlow portable power station with real-time visuals on input, output and connected add-ons. The app has several functions, such as checking how much solar power is being drawn, turning off AC outlets to conserve battery, or ramping up recharging speed. All of these can be done remotely or on-site.
EcoFlow’s generators can be monitored using an app on a mobile phone
Another interesting feature is the battery management system (BMS). This feature measures real-time voltage, current and temperature precisely and controls the battery for best performance with an intelligent algorithm. Expandable power and capacity are available. Customers can have their modular power customised to suit their requirements. In addition, an optional extra battery is available for River, River Pro and Delta Max.
Perfect fit for mining and the environment Be it open-pit or underground mining, EcoFlow’s generators are ideal for the mining industry. Their portability means they can be conveniently carried around a mine site with ease and are great for hard-toreach places commonly found in underground mines. From a health and safety point of view, this generator has no emissions because it is battery powered. As such, mine workers operating in confined spaces will not be exposed to harmful emissions compared to diesel generators and will have access to better air quality. Being able to carry the generators around allows the user to place it close to the device that requires the power. This eliminates the need for too many extension cords – which could potentially lead to an incident or accident. This could also potentially reduce the number of incidents experienced at mines. Furthermore, the generators are also environmentally friendly, as they don’t emit any greenhouse gases and make minimal noise. South Africa continues to face challenges when it comes to electricity supply. Towards the end of October 2021, power utility Eskom implemented stage 2 and stage 4 load-shedding across the country. The reason cited was a shortage of generator capacity at the Medupi, Kusile and Matla power stations. Such instances show the need to have reliable backup power as and when needed. EcoFlow products are now available in South Africa and the wider continent. For more information, email: sale.rest@ecoflow.com
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EQUIPMENT
WEIGHING SYSTEMS FOR ACCURATE LOADING Loadtech’s LOADRITE has a range of weighing systems designed for wheel loaders, excavators and conveyor belts. The systems offer basic weighing information or greater accuracy and data capturing capabilities depending on the loader size.
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eighing systems play a crucial role in the overall production process of mine operations. Accurate weight data has numerous advantages such as reducing costs and process time, increasing production and minimising potential overloads.
LOADRITE L2180 Loader Scales Regardless of the application, the challenge for site and fleet managers is the same: achieve maximum value from existing equipment by utilising it in the most efficient manner. The key to making effective decisions is having the right information available. The LOADRITE L2180 is more than just an on-board scale. It provides an easy way to capture information on your loading process right where it takes place – on the loader. LOADRITE uses rotary position sensors to continuously monitor the boom position over the entire lift, allowing multiple measurement points. Multi-point weighing allows variations in weights calculated to be averaged out or even discarded if outside tolerance levels. These variances can be caused by inexperienced operators or weighing on rough ground. X2350 Excavator Scales The Trimble LOADRITE X2350 is an excavator productivity weighing system that helps optimise mass-haul and other loading operations, through payload tracking and real-time material movement visibility. With the X2350, your operators are more confident and empowered to excel in their loading performance. Tracking material movement helps prevent lost productivity before it starts costing your business money. With optional
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reporting software, management now has access to realtime visibility of mass haul project status on any mobile device or web browser at any time. The X2350 makes information management easy with a range of online or off-line reporting options, including Insight HQ, so you can access your data on a PC or mobile device. Choose either an in-cab printer, raw data export or from a range of pre-formatted/custom reports.
C2850 Belt Scales The LOADRITE C-Series conveyor belt weighing system for mobile applications is specifically designed to ensure accurate weighing for mobile crushers, screeners and stackers. The C-Series is not based on traditional conveyor belt scales. It has been designed especially for the mobile environment, with unique features such as a rugged printer, direct delivery of reports to email using cellular modems, weighing with chain idlers and tailor-made reporting. LOADRITE mobile belt scales give plant operators and managers a range of powerful tools to measure the actual production from screens and crushers, track final product stockpiles, analyse plant and machine downtime, and monitor loadout of trucks, port and rail and conveyor belt scales.
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In the next issue of INSIDE MINING Diversity and inclusion (D&I) remains a top priority of many industries, including the mining industry. The upcoming issue of Inside Mining magazine looks at the progress being made in D&I within the mining industry. This issue explores important features related to D&I including:
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CONTACT
ADVERTISING QUERIES Amanda de Beer c +27 (0)72 600 9323 t +27 (0)87 802 5466 Amanda.Debeer@3smedia.co.za Chilomia van Wijk c +27 (0)83 963 1240 t +27 (0)11 233 2627 Chilomia.VanWijk@3smedia.co.za CONTENT & EDITORIAL QUERIES MANAGING EDITOR: Dineo Phoshoko c +27 (0)83 768 8692 t +27 (0)11 233 2618 Dineo.Phoshoko@3smedia.co.za
ENERGY
AFRICAN POWER PROJECT BOON?
Shamilah holds BA and LLB degrees from the University of Cape Town and an LLM from Temple University in the USA
South African businesses that have endured on-off rolling blackouts for the past 12 years are not alone in their power supply woes. By Shamilah Grimwood-Norley*
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early 80% of businesses across Africa suffered up to nine interruptions to their power supply a month between 2006 and 2016, according to the African Development Bank. Almost half of businesses maintain their own generation equipment to keep operating during blackouts, which occur for an average of 90 days a year, the World Bank says. Adding insult to injury is the high cost of electricity for industry in sub-Saharan Africa (SSA) – at around US$0.20/kWh (R3.08/kWh), which is four times higher than industrial rates in the developed world. While African governments are acutely aware of the impact of energy insecurity on economic growth, they lack sufficient capital to invest in new power generation and network capacity. The Programme for Infrastructure Development in Africa estimates that the continent’s power sector needs an annual investment of $42 billion (R647 billion) across the supply chain, generation, transmission and distribution. As a result, governments are increasingly looking to private sector investment in independent power producer (IPP) projects.
IPPs vs PPPs IPPs are often referred to as public-private partnerships (PPPs), given the offtake arrangements between the IPPs and the power utility (usually wholly or partly state owned). Interestingly, recent large-scale IPP programmes have been procured outside the formal PPP regulatory frameworks, which generally entail the handover of the
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infrastructure assets built for the PPP to the procuring state authority at the end of the PPP term. PPPs entailing significant private investment in capital assets are typically structured as: build, own, operate and transfer (BOOT); build, operate and transfer (BOT); or build, transfer and operate (BTO) concessions (or variations of these) – with the mandatory handover of these assets occurring on expiry of the PPP term. In countries where the power supply chain is still largely vertically integrated and the private sector is seeking reform that will ultimately see widespread privatisation of power generation assets and end-consumer choice of generation supply, the structuring of IPPs as PPPs where the IPP assets are transferred to the state does not make much sense. Power generation is a naturally competitive business and the ownership thereof should ideally be widely distributed – not monopolised by the state.
A missed opportunity The transmission and distribution of electricity is a natural monopoly. Private ownership of network assets, particularly in developing economies – which require expansive building out and strengthening of network capacity and improved interconnection – is not optimal, given that the interconnected network system is a nationally strategic asset. Where public funds are constrained, though, private investment in the network system undertaken on a PPP basis should be considered. Although many governments across SSA have paid considerable attention to utility-scale IPP
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THE SUSTAINABILITY ISSUE | 2021
ENERGY procurement in the last decade, no procurement of private sector investment in national network systems has been undertaken by governments in the region. To my knowledge, no African jurisdiction has pursued the procurement of private sector investment in network services, through PPPs or otherwise, save very recently for Kenya, and this seems to be a missed opportunity. Although Kenya launched its first IPP procurement programmes two decades ago – being the first country in SSA to do so – it has only now commenced its first competitive procurement for the upgrade of its transmission system. If Kenya succeeds in banking the Kenya Transmission Project, it may be a game changer for new investment in the African power sector.
Bankability is key Given the capital-intensive nature of utility-scale infrastructure investment, private developers will be heavily reliant on third-party funding from financial institutions. It is clear from the utility-scale IPP projects that have achieved ‘commercial close’ in single buyer markets (being markets for utility-scale supply only to state-owned offtakers) that private investment in the form of shareholder
equity and third-party debt can be leveraged for new power generation. The litmus test for investment is bankability (i.e. the ability of the project to raise third-party debt). Third-party lenders want to be sure that the cash flows generated by the project (in the case of an IPP, the payments received for the electricity delivered or available to be delivered by it) from the utility off-taker will be sufficient to pay their costs, and that these are adequately protected against all project risks. In the case of a transmission PPP, the cash flows will principally be the unitary charges received by the private transmission contractor for the network services made available by it to the transmission system owner. In IPP projects with state utility off-takers, a prerequisite for raising third-party debt is for host governments to protect IPPs from credit risk – specifically the risk of nonpayment by the off-taker. Credit risk is a challenge for many African jurisdictions, where state utilities often have a sub-investment-grade credit rating, or close to it.
The importance of a structured approach Apart from government credit support, where there is a
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ENERGY
Power generation is a naturally competitive business, and the ownership thereof should ideally be widely distributed – not monopolised by the state
clear or potential credit risk, host governments also need to pay attention to other critical factors for a successful IPP or PPP procurement. These include a properly structured planning process (which requires unequivocal state sponsorship), a well-run and timely procurement process (adequately resourced), and a commercially reasonable pricing approach that allows for the recovery of the investment costs plus a reasonable return. The procurement process must incorporate strict discipline around timelines and evaluation criteria, consistent and open engagement with bidders, and welldeveloped procurement documentation.
Reasonable rates of return and risk allocation Pricing is crucial for the successful implementation of IPPs or PPPs in single buyer markets. The pricing parameters in the RFP document need to be aligned with pricing policy that supports rate-of-return or cost-of-service tariffs to allow investors to cover their costs and earn a reasonable rate of return. In such markets, an IPP or PPP only works if the tariff methodology of the regulator supports rate-ofreturn or cost-of-service tariffs.
Most importantly, the regulator should not be allowed to reopen and review tariffs once the contract has been awarded. To be bankable, the off-take agreement should lock in a fixed term, fixed pricing and fixed escalation, as well as commercially balanced risk allocation. A general rule of thumb for governments, in my view, is that an IPP should not be required to assume any risk that the utility off-taker’s own generators do not bear in their own generation businesses. IPPs should generally not be required to take on costs that a state generator is entitled to recover from its customers. That is a key principle African governments and investors should consider. In summary, IPPs can be effectively leveraged in the African power generation landscape, provided they are properly planned, well run, transparent, properly priced and bankable. Governments should also consider exploring PPPs for transmission and distribution networks, which are currently a missed opportunity. *Shamilah Grimwood-Norley is head: Banking and Finance at Bowmans.
THE SUSTAINABILITY ISSUE | 2021
ENERGY
Renewable energy has become a key enabler of change as the movement towards a greener future gathers momentum. By Leon Louw*
W
ith the emphasis on environmental and social governance (ESG) matters, mining companies are scrambling to find the most reliable and cost-effective energy solutions to offset any adverse impacts their operations might have on the environment. Most remote mines in Africa operating off-grid are dependent on fossil fuels as their main source of power. Diesel or gas generators are effective in these harsh environments but, in the long term, are extremely costly to operate. Moreover, a reliance on diesel fuel only might become a liability in a new normal, where shareholders and funders consider ESG first – rather than increasing dividends and profit margins at all costs. The carbon emissions and other environmental impacts associated with fossil fuels are significant and might count against a mining operation in the future. As all executives and project managers that have built mines in remote Africa know, one of the
primary challenges is getting large plant and equipment to site, or reassembling components after delivery. This is also the case when setting up or constructing a renewable energy system like a solar plant or some form of hybrid solution. Mining companies cannot choose where the mine will be located. The best mineral deposits are often found off the Leon is a thought leader in African affairs, beaten track, with limited including mining across the continent access in terms of roads and other enabling infrastructure. In an ideal world, the plant is preassembled and transported to the end destination,
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ENERGY
which will then cut short the installation time and reduce the number of people normally needed to construct the modules once it has arrived on-site.
Dealing with the challenges According to Hans Olav Kvalvaag, senior vice president: Release at Scatec – a Norwayheadquartered renewable energy specialist – the key challenges when setting up renewable energy facilities in remote regions of Africa are mostly related to transportation and logistics on-site. Scatec is no stranger to Africa, and has developed, built, financed and operated more than 1 GW of solar PV and hydro projects in, among others, South Africa, Mozambique, Rwanda, Uganda and South Sudan. In fact, Kvalvaag says Scatec designed the Release system based on the company’s experience and lessons learned building 2 GW of utility-scale projects in remote areas of Africa and the rest of
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the world. Release is a flexible agreement of preassembled and containerised solar PV and battery equipment, which is then securely integrated with the existing power infrastructure. “Assembling and fitting substructures, cables and modules normally requires setting up a factory-type assembly process in unfriendly environments. With Release, the equipment is mostly pre-assembled, including substructures and modules. This not only shortens the installation time significantly (we can typically install 2 MW per week) but also requires a fraction of the labour, tools and machinery typically required,” says Kvalvaag.
Setting up a solar PV facility When the company develops a solar facility at a remote mining site, Scatec starts the process by gathering as much information as possible about the mine. It is important to have detailed specifications
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on the existing power generation infrastructure and load profile. This is required to size the solar PV facility and storage, as well as to estimate the potential generation and savings the system can yield. Depending on the mine’s particular power stability requirements, power generation infrastructure and solar PV penetration, additional grid and power integration studies are undertaken. Once the sizing is finalised and the lease term agreed, Scatec ships the equipment to site. The company’s specialised team and local labour install and commission the work. “Our approach is to define the scope of work together with the client to optimise costs (land preparation, for example, could be done by the client) and knowledge transfer. For example, we offer training of on-site personnel for the maintenance of the plant,” says Kvalvaag.
Typically, the equipment consists of the solar PV system and storage. This includes PV modules and trackers, cabling, inverters, AC combiner boxes, and a substation made up of a step-up transformer as well as an energy management and control system to ensure a complete power solution with seamless integration into the existing infrastructure. The company monitors the system remotely 24/7 from its control monitoring centre in Cape Town, South Africa.
The benefits of investing in solar PV The initial capital cost of investing in a solar PV solution might be high, but the long-term benefits for a remote mine are substantial. Reducing costs and CO₂ emissions are the main drivers; however, other advantages include creating redundancy in the energy supply, and the ability to obtain better reliability of power. Fewer outages typically do not
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Most remote mines in Africa operating off-grid are dependent on fossil fuels as their main source of power
only impact the cost of power but, more importantly, reduce costs and increase the predictability of their core mining operations. The big question mark has always been around the ability of solar panels to drive the mining operations on its own. To date, that goal has not been achieved, and the system needs to be combined with an exceptional storage facility and hybridised with other sources of energy; however, installing a good solar PV system could potentially reduce up to 30% to 40% of a mine’s energy load. Scatec’s Release, for example, was especially designed as a flexible hybrid solution that can easily adapt to any significant changes in the load that the mine might experience because of expansions or closures. Release can quickly be installed, recommissioned or expanded. “Solar PV only produces power during the day, and currently the combination of PV and storage would typically offset 25% to 40% of the mine load in the cases we are looking at now, in order to be cost-efficient. With lower battery storage costs going forward, we foresee that renewable penetration will increase, as we can install higher capacities to replace more of the thermal or alternative power currently being used.
Investing in hybrid systems “Our assessment of the optimal hybrid solution, including power stability and lowest levelised cost of energy, is customer-specific, and depends on the mine’s access to wind, bio-mass or other renewable energy sources. Scatec works with clients through this process. We have recently been awarded projects with customers targeting 100% renewable energy. These types of assessments require inputs and advice from multi-technology experts like Scatec,” says Kvalvaag. Depending on the location, infratructure and logistics, it is possible for Scatec’s Release system to generate power within four months after the contract has been signed. It makes this product ideal for junior mining companies developing shallow, open-pit mines in Africa that are required to start producing within tight deadlines. “Detailed timelines depend on the logistics required to ship and transport the equipment to site, as the installation rate is between 1 MW and 2 MW per week. We believe it is important for us to tap into the client’s experience and knowledge as well, in order to minimise the risk of delays, and ensure the smoothest delivery and installation,” says Kvalvaag. Scatec Release is making massive inroads into the global mining industry as more and more mining companies turn to renewable energy to mitigate their potential adverse impacts.
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Torex Gold cuts emissions Scatec recently entered into a lease agreement with mining company Torex Gold for an 8.5 MW solar plant to provide renewable power to the Morelos Media Luna and El Limon Guajes projects in the Guerrero Gold Belt, some 180 km south-west of Mexico City. “The agreement was a landmark deal for Release by Scatec,” says Kvalvaag. The initial contract term is 10 years with the possibility of extension and options for buy-out starting after three years. The solar plant can at any time be expanded, including adding battery storage to further increase the use of renewable energy. It can also be moved to a new location if needed. The new solar plant is expected to be completed in the fourth quarter of 2021, subject to permitting approvals. “The agreement is an important milestone for us in delivering reliable and renewable power to the mining industry. We have had good cooperation with Torex in designing the solution to adapt to challenging topography. The Release model is designed to provide flexibility with regard to both contract term and capacity, and thus has great potential in mining,” adds Kvalvaag. The new plant is expected to reduce Torex’s scope 2 greenhouse gas emissions by up to 8.6% using 2019 as the baseline year; it is Torex’s first major foray into renewable energy at its operations. “As is often the case with innovative and sustainable solutions, in addition to the environmental benefits the solar plant will provide, there will also be an economic upside and benefits to the local communities. Factoring in the installed cost of the plant, together with the ongoing lease fee, we expect to save approximately US$1 million per year in energy costs over a 20-year lease period, with full payback of the solar plant realised within approximately seven years,” says Jody Kuzenko, president and CEO of Torex Gold. Developing a new mine in remote regions has always required tenacity and perseverance. That has not changed. However, in a world where the emphasis is now on the softer aspects of mining – and where flexibility and diversity are as important as mining skills – teaming up with the right partners will be key to successfully bring new projects into fruition within budget and on time. Energy is a focus area for mining executives, and to invest in a system that can be quickly assembled, installed, removed or expanded will become critical in the future. *Leon Louw is the editor and founder of WhyAfrica.
MINE CLOSURE
DRDGOLD subsidiary Ergo Mining has begun reclamation – at a R3.8 million setup cost – of the 4L25 mine dump, which holds 2.7 Mt of mining waste.
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he reclamation of this dump is integral to sustaining production at Ergo and would free up a considerable land patch. The dump is within the 4A8 reclamation area, less than 5 km from Johannesburg’s central business district, near Ergo’s City Deep milling and pumping plant. With an average grade of 0.308 g/t, the 4L25 dump is estimated to contain some 850 kg of gold. 4L25 slimes will be recovered at a rate of up to 300 000 t per month over a period of 10 to 12 months, with supplemental tonnages coming from the 4L2 dump, whose reclamation is ramping down. This will sustain City Deep’s production levels for a further 12 months, until the larger 4L3 and 4L4 reclamation sites begin. 4L25 slimes will be reclaimed by a remotecontrolled, high-pressure water gun positioned on top of the dump. It will be combined with 4L2 slimes, and then pumped via a 40 km pipeline to Ergo’s metallurgical plant at Brakpan for gold recovery.
Reversing gold mining’s environmental impact Besides sustaining City Deep’s production for longer, 4L25’s reclamation forms part of the extensive land rehabilitation programme DRDGOLD is executing under its ‘rolling back gold mining’s environmental legacy’ banner. The partially reclaimed dump will now be removed completely
New Ergo reclamation site
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to liberate some 37 ha of land for rehabilitation and sustainable land use. Further, remnant material from other clean-up sites will be reclaimed and trucked to the 4L25 site, and the newly installed pumping and piping infrastructure there will also relay this to the Brakpan plant for processing. This will clear additional land for rehabilitation and sustainable use.
High volume and low risk The retreatment business is high volume and low risk. Vast quantities of material are processed monthly through the plant in order to recover gold from old mine dumps at a recovery rate that varies depending on the material being treated. As each old dump or dam is depleted, others are brought on stream. Teething problems are inevitable during the commissioning of new dumps and decommissioning of exhausted reclamation sites, and these can negatively affect recovery rates in the short term. Excessive rain can also affect recovery rates, although DRDGOLD has taken the appropriate measures to better manage weather-related issues in future. Ergo, one of the world’s largest gold surface tailings retreatment facilities, owns the rights to treat around 100 sand dumps and slimes dams on the Witwatersrand. Some of these are currently being treated.
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3 mine closure challenges …and how to overcome them
Against the backdrop of sustainability expectations and the unprecedented impact of Covid-19 and economic decline, the mining sector is faced with balancing revenue and resilience pressures, with environmental compliance and closure requirements. Is it possible to address these challenges, while also combatting climate change? By Spencer Eckstein, Director: Business Development, Ukwazi
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Compliance complexity
There is no doubt that compliance exists within a complex and often changing regulatory environment, and while every intention is there to adhere to enhanced requirements, the landscape can be difficult to navigate. Closure, itself, is regulated under the National Environmental Management Act (NEMA), the Mineral and Petroleum Resources Development Act (MPRDA) and the Financial Provision Regulations, amongst other legislation. Prior to receiving a mining licence, financial provision must be made for rehabilitative costs and ultimately, in order to close a mining operation, environmental authorisations must be effectively obtained before an official certificate can be issued. This, compounded by the proposed Climate Change Bill, which outlines the country’s commitments to curbing climate change. As such, best practice and innovative, sustainable solutions to environmental and closure liability management must be found.
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Categorising and connecting
Unfortunately, other mining disciplines are often prioritised over closure planning, resulting in a lack of integration between business strategies and environmental considerations, and increased emphasis on cost factors and other technical elements. Mine closure is not just a once-off exercise, it must be inherent to the life-of-mine process and technology, people and processes must be connected. Advancements in planning software and industry tools have meant that planners can determine practical and compliant closure solutions by simply analysing operations as a whole, driving accurate data-driven decision-making. The next step? Turning mine closure into mine transformation and moving away from compliance to strategy and valorisation.
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Stakeholder confidence
The reality is that some operators tend to tick legislative boxes when it comes to mine closure, however, execution often misses the mark. The trust deficit between communities and mining companies has long been a contentious issue, and one that has been identified as a top risk for key sector players. It is, therefore, a non-negotiable that local communities are consulted during all phases of mine closure planning, as it will have a direct impact on their livelihoods, cultural identity, housing and resources. Not excluding environmental effects such as soil erosion, land instability, air pollution and damage to local biodiversity. To address the potential damage of inadequate mine closures, the Department of Mineral Resources and Energy (DMRE) has put forward a new mine closure strategy for consultation and commentary. Stipulations, amongst others, encourage operators to turn closed mines into economically viable projects such as agricultural and energy generation initiatives or lucrative tourist destinations. Further to this, all mine closure plans should, ideally, focus on rehabilitating land in a way that empowers communities, supports livelihoods and improves access to land. Moving forward, mining companies need to establish strategies that incorporate sound closure plans; selecting a sustainability partner that can execute on both planning and compliance, underpinned by value engineering, clear objectives, measurable outcomes and solutionist thinking.
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Mine closure plan – a living, iterative effort While most businesses tend to focus on the here and now – rather than on any prospect of closing down – a mine bears the responsibility of planning its closure even before it starts. By James Lake*
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oday’s expectation is that a mine closure plan is dynamic, requiring constant and regular improvements. This, of course, has not always been the case, and there are still plenty of examples of mine closures that have not been at all planned. South Africa’s legacy of about 6 000 abandoned mining operations is testament to that. Partly for this reason, times have changed radically, and mine closure is now a central concern of responsible mining companies and governments globally. It has been a few years since the International Council on Mining and Metals published the second edition of its Integrated Mine Closure Good Practice Guide, and this remains the standard reference point for practitioners.
With more than 23 years of experience in the environmental field, James’ focus is on geochemistry, closure planning and liability estimating
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Dynamic process If there were a central point these guidelines drive home, it would be that mine closure is a dynamic and iterative process. This makes it vital to consider closure as an integral part of mining operations’ core business – which in turn demands a systematic and integrated approach. To achieve this integration into life-of-mine planning, mines need to develop and update a detailed knowledge base, where data can be used to inform the ongoing relevance of the plan. The mechanisms here are feedback loops, turning closure-related actions into a cyclical process where the plan is modified as more information becomes available. Perhaps the other key aspect of international good practice is that it considers not just environmental, but also social and economic, factors in the closure
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Responsible mine closure remains a fundamental aspect of the mining sector’s sustainability approach
Early implementation of rehabilitation during operations resulting in sustainable covers (Credit: James Lake)
strategy. Over the years, the trend to emphasise social issues led practitioners to talk about ‘social closure’ to highlight this aspect. More recently, though, the necessary integration of environmental, social and economic issues is being readily embraced; the more appropriate focus is now on socio-economic transitioning. Such transitioning demands not just planning but communication. Underpinning the principles of responsible closure has increasingly been a focus on engaging with stakeholders – most importantly those in mining communities most directly affected by closure. This holds a special relevance for South Africa, where many mines are labour-intensive and can often employ many thousands of workers. Add to this the structural poverty within the economy and, because each of these workers supports 5 to 10 direct dependents1, the socio-economic scale of closure is significant. Engagement This highlights the potentially catastrophic human impact that closing a mine can have, aside from the myriad environmental impacts that may continue after closure. Engagement has therefore become an essential and specialised task, not only to understand community needs and aspirations, but to communicate the many essential truths about the transience of mining. In a recent engagement exercise at a local mine nearing the end of its life, it became clear that many community members struggled to comprehend a time
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Minerals Council - MINE SA: 2016 Facts and Figures
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MINE CLOSURE Tailings closure incorporating drainage designed for anticipated future rainfall (Credit: James Lake)
when the mine might not be there. The knowledge that the mine had operated for decades often creates the mistaken impression that it is a permanent fixture. Modern industry standards place responsibility on the mine to educate stakeholders about why closure planning is necessary, and why they need to be involved. Only in this way can efforts to diversify local economies gain traction, for instance. In the same way that closure planning is an ongoing task, so then is stakeholder engagement. In our experience, mines usually find that their closure messaging needs to be repeated as people move through mining communities. The engagement must address new generations of existing residents as well as waves of new residents moving in from elsewhere. Social engagement has therefore become an increasingly important aspect of the specialist services that SRK provides. Climate change Environmental aspects remain core to closure plans, and indeed have become more complex with the advent of climate change. An important concern has been fast-changing rainfall patterns, where variations in volumes and intensity have the potential to threaten the integrity of large structures like tailings storage facilities. These changes are likely to make new demands on the design of drainage structures, for example. Intense rainfall could also erode cover systems put in place to bring vegetation back to a mined area or a dump site.
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These demands are reflected in the evolution of skill sets to manage tailing dams – a field in which SRK has been extensively involved over the decades. In the modern era, mine closure planning in relation to tailings dams requires multidisciplinary teams, including specialists in geotechnical engineering, as well as water management and environmental rehabilitation. Putting aside funds Financial provisioning has also been a key issue in mine closure, although this has not yet been conclusively dealt with following the promulgation of relevant legislation in 2015. The aim is to ensure that mining companies have the resources to implement proper rehabilitation in the closure process. This is understandable, as the state should not be expected to do this – neither does it have the resources to do so. However, there is still discussion about the actual amounts to be set aside as provision, and a new version of legislation is expected in 2022. Notwithstanding the challenges and complications, responsible mine closure remains a fundamental aspect of the mining sector’s sustainability approach. Apart from being a legal requirement, it also underpins the industry’s reputation going forward as it works to establish a more constructive relationship with stakeholders and regulators alike. *James Lake is a partner and principal scientist at SRK Consulting.
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Identifying key challenges associated with mine closure At the end of 2019 and start of 2020, WWF South Africa and Mining Dialogues 360° co-convened two colloquiums with key mining sector stakeholders. From these, outcomes and suggested solutions were identified to find pathways to orderly and transformative mine closure and rehabilitation after Covid-19. By Louise Scholtz, Khodani Mulaudzi, David Perkins & Tracey Cooper*
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outh Africa is home to a range of systemic issues that bedevil orderly mine closure and rehabilitation. As a result, nonfunctional, end-of-life closure processes manifest as very low levels of certified closure and the non-utilisation of rehabilitation funds for their intended purpose. These systemic issues include: • incoherent policy and legislation • laws that do not remedy historical legacies • inadequate financial provisions for rehabilitation, which compromise mine closure • ‘pass-the-parcel’ transfer of mine closure liability to increasingly marginal operators • company law that conflicts with the ‘polluter pays’ and ‘cradle-to-grave’ principles • under-resourced enforcement entities • failure to acknowledge links between large-scale miners and artisanal and small-scale mining • the absence of a ‘whole of government’ approach to mine closure • a general lack of transparency. Lack of policy coherence It is generally accepted that policy and legislation have failed to provide an effective regulatory framework for orderly mine closure and rehabilitation in South Africa. A lack of
policy coherence has led to a disjuncture between the regulatory framework governing this process and practices on the ground. A vicious cycle of different views about what constitutes compliance, an inability on the part of the government to regulate effectively, minimal capacity for enforcement, and a lack of communication and cooperation between key actors have led to the dysfunctionality evident today. This has manifested in a variety of ways certainly retarding mine closure and rehabilitation processes, and may even be facilitating dereliction by mining companies. The detrimental impact of this on government and community stakeholders is significant. There is a clear need to strengthen legislation and make it more enabling of mine closure and rehabilitation, while ensuring consequences for non-compliance. One of the areas of regulatory uncertainty hampering effective mine closure and rehabilitation is the reported ambiguity as to what constitutes a ‘sustainable end state’ as defined in the proposed Financial Provisioning Regulations to the National Environmental Management Act (No. 107 of 1998), published in 2019. In particular, the need to mitigate the negative impacts of mine closure outside the mine site raises questions about the adequacy of a definition that
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MINE CLOSURE
Truly transformative mine closure and rehabilitation processes will demand greater community inclusion as a prerequisite for legitimacy
only focuses on the biophysical state of a mine site reaching a defined ‘risk threshold’. Absolute clarity on end-state responsibility and liability is essential, including an expanded definition under a new paradigm that facilitates transformative mine closure and rehabilitation. The fact that a variety of issues militate against the achievement of a ‘sustainable end state’ (howsoever that is defined) should not deter attempts to derive a more workable definition designed to incorporate the wider socio-economic considerations of sustainability. Avoiding responsibilities & SLPs The avoidance of mine closure and rehabilitation responsibilities is common in South Africa. The ‘pass the-parcel’ metaphor applied to mine closure describes a phenomenon whereby mining assets are transferred
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to successively more marginal operators as mineral reserves are depleted. This results in an ever-decreasing likelihood of proper mine closure and rehabilitation. Another practice that defers closure and enables avoidance is the tendency towards ‘perpetual mining’. In this instance, mines are placed under care and maintenance – the cost of which is a relatively small price to pay when compared to the real cost of achieving closure. Overly formulaic regulations for the financial provision for mine rehabilitation, which in any case typically under-provide for the real cost of this process, further complicate matters. Regulatory reform is needed to dissuade these practices and incentivise orderly and effective processes of closure and rehabilitation. Some of the instruments devised by the government to support transformative mine closure and rehabilitation are
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also deficient. Despite a heightened awareness of the need for mining companies to promote and invest in alternative livelihood development ahead of mine closure, guidelines for social and labour plans governing mine-community development, and the management of mine downscaling have proven to be weak and ineffective. In several instances, social and labour plans (SLPs) have become a means by which mines are pulled into taking responsibility for municipal service delivery in the short term. This diverts resources that could have been devoted to interventions designed to ensure the long-term sustainability of mining-affected communities after the life of the mine. For as long as SLPs continue to be seen as minimum conditions to be satisfied to achieve regulatory compliance, they are unlikely to meaningfully support transformative mine closure and rehabilitation.
Artisanal and small-scale mining Artisanal and small-scale mining is a key issue that is not usually included in discussions of mining closure and rehabilitation. However, the practice of the ‘invasion’ of derelict and ownerless mines and the unregulated mining practices that then follow should be of keen interest to the state. The Department of Mineral Resources and Energy (DMRE) advocates the formalisation of artisanal and small-scale mines but has made little progress in bringing them into the regulatory framework. The DMRE also provides precious little by way of institutional support to the sector. Until such time as artisanal and small-scale mining is formalised and given institutional support, the challenge posed to mine closure and rehabilitation by this sector is unlikely to be resolved. In fact, it may intensify as rising unemployment resulting from the Covid-19 lockdown
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MINE CLOSURE
Louise Scholtz
Khodani Mulaudzi
forces more people into artisanal and small-scale mining in order to survive. Finding solutions Mining houses and the state consistently fail to accurately gauge community sentiment that reflects real opinions, needs and priorities. Consultative processes, even those prescribed in law (e.g. integrated development plans and SLPs), are rarely sufficiently inclusive. For all intents and purposes, communities are effectively excluded from engaging in mine closure and rehabilitation planning, irrespective of whether it addresses support for post-mining livelihood development. Truly transformative mine closure and rehabilitation processes will demand greater community inclusion as a prerequisite for legitimacy. As South Africa moves to meet its climate change commitments under the Paris Agreement, imperatives for decarbonisation and a reduction of the country’s dependence on coal-generated electricity are intensifying. Any shift to a low-carbon, climate-resilient economy makes mine closures in coal-producing areas inevitable. The consequent, large-scale job losses on the mines and coal-fired power plants they serve – as well as among the many businesses providing goods and services to the mines – will impact heavily on adjacent communities, with inevitable increases in household vulnerability and food insecurity. Ensuring that mine closure and rehabilitation are transformative will be essential for a ‘just transition’. *Louise Scholtz is a senior programme manager: Urban Futures and Khodani Mulaudzi is a former research and project coordinator: Policy and Futures at the WWF. David Perkins is a development economist at Mining Dialogues 360°, while Tracey Cooper is the company’s executive director.
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David Perkins
Tracey Cooper
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Responsible mine closure through research Dr Ingrid Watson, acting director of the Wits Mining Institute (WMI), speaks to Inside Mining about the role of research in mine closure and rehabilitation policy and regulation. What legislation is in place to govern mine closure and rehabilitation in South Africa? Closure planning has been a legal requirement in South Africa since 1991. Additional requirements came in with the implementation of the Minerals and Petroleum Resources Development Act (No. 28 of 2002; MPRDA). Since 2015, closure is also managed in line with the National Environmental Management Act (No. 107 of 1998; NEMA) and its regulations. This legislation focuses on environmental rehabilitation, with minimal consideration of local communities and the economic impacts of closure. These concerns are partially addressed through social and labour plans (SLPs), and there is an increasing focus on the social impacts of closure. This is important as – in addition to the environmental concerns – mine closure also has devastating social and economic impacts. What role do tertiary institutions play in terms of mine closure and rehabilitation? Tertiary institutions offer an independent space where the various issues associated with mine closure and rehabilitation can be considered. I believe that this broader perspective is necessary to examine mine closure from a regional perspective over longer timeframes. A university facilitates in-depth interrogation of the larger system, and can bring a range of disciplines to bear on a single issue. Can you mention some outcomes from previous research into mine closure and rehabilitation? From research conducted at the WMI, we have found that mine closure in South Africa is problematic. Our research reviewed the granting of closure certificates, as it had long been speculated that no closure certificates had been granted since the implementation of the MPRDA. The research found that closure certificates were indeed being granted,
but only for prospecting sites and small-scale mines, which have a relatively small environmental impact. No large mines of any environmental significance were relinquished over the period under review. Furthermore, the issuing of closure certificates varied significantly between regional offices, with the success rate for applications being generally low and the issuing of certificates taking a very long time. This speaks to the ineffectiveness of current legislation, the inability to rehabilitate mines successfully, and the capacity of government. A second body of work looked at how mining drives landscape change, and the consequences of this at closure. Using the Free State goldfields as a case study, we found that the social, environmental and economic consequences of long-term extraction are significant in resource regions, and that existing measures to address these are inadequate. A regional approach to mine closure where plans are developed for the region – rather than individual mining rights – and where there is more collaboration between companies may be more effective. Any final thoughts you would like to add? Mining is necessary to fuel the green economy, as renewable energy technologies use significant quantities of minerals. It is anticipated that mining will increase. It is therefore critically important that ESG performance in mining continues to improve, and that we get better at closing mines. If we are unable to close mines responsibly, then we should not be opening them.
FOLLOW THE LINK Read the full story: https://miningnews.co.za/2021/11/09/responsible-mineclosure-through-research
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The Lisheen site is now being repurposed as the National Bio-economy Campus
CASE STUDY
MINE CLOSURE & REHABILITATION: Getting it right
Vedanta Zinc International (VZI) received a Mine Closure Completion Certificate for the Lisheen Mine in Ireland. Dineo Phoshoko speaks to Pushpender Singla, CFO at Vedanta, about mine closure and rehabilitation processes and procedures. Could you explain the steps to follow in relation to mine closure and rehabilitation? Mining provides the critical minerals and metals needed for society. However, mining activities can impact local environments and biodiversity when not properly managed. The mines of today prepare for a rehabilitated landscape right from the beginning, in a process known as progressive reclamation. 1. Before mining Integrated mine planning for closure and reclamation - The rehabilitation planning process starts before mining begins. - Detailed closure and reclamation plans are integrated into the permitting process for mine development. - Continuous monitoring throughout the whole life cycle of the mine. - Continuous engagement and dialogue with the indigenous people, communities and regulators. - Continuous updates to ensure closure and reclamation plans complement any modifications to the mine during operation (including financial considerations). 2. During mining Planning for climate change impacts and land use - An area of the mine can be reclaimed even as other parts of the mine are in operation. - Mitigating the impact of the land disturbance during operations is critical to returning the land to a viable state.
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- Climate change impacts (e.g. precipitation, erosion and chemical processes) should also be accounted for in this ongoing process to ensure successful closure and reclamation. 3. After mining Closure and reclamation - Once the mining process is complete, the land can be returned to a natural state and prepared for postclosure reuse. - Evidence of the mining operation must be removed as far as possible. - Mine closure and rehabilitation activities need to take local environmental conditions into account. What are the best practices when it comes to mine closure and rehabilitation? Lisheen gave a commitment to the local community to have the tailings facility 60% rehabilitated before mining ceased – and this was achieved. This progressive rehabilitation allowed for Lisheen to provide reassurance to the local community of the robustness of the closure plan. Once mining production ceased, the closure plan was implemented, which included backfilling the underground mine, clearing and removing buildings and equipment, removing ground contaminated with lead and zinc, and completing the rehabilitation of the tailings facility to farmland. This was
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CASE STUDY accompanied at each stage by a rigorous monitoring and verification programme, overseen by the authorities. A follow-on aftercare phase will continue for at least 30 years. What regulations are in place to govern mine closure and rehabilitation and how effective are they? Regulation has an important role to play in mining, as it is designed to reduce and mitigate environmental risk. Exhaustion of the ore is inevitable and therefore planning for, and the design of, closure is an integral part of the licensing process. The costs associated with closure and clean-up can be significant for mines – running into the tens of millions – and can take many years. Mining companies are therefore required to assess and plan for the costs associated with closure from the outset to ensure that adequate money and resources are set aside to cater for this (known as financial provision). It is not only important to protect the environment but also the public purse in the case of default by a company, where the state would then have to step in and remediate and close the site. Therefore, funds are required to be secure, sufficient and accessible by the state if necessary. Closure and aftercare planning is very detailed and all tasks, large and small, are costed. Plans are developed in line with national and international guidelines, approved by the authorities and reviewed at least annually during the operation of the mine. Cessation of operations, whether anticipated or not, must be followed by implementation of the approved closure plan by the mining company. When satisfactory closure has been demonstrated to the authorities, aftercare of the mine is then implemented. Aftercare generally entails lower-level monitoring and maintenance to ensure the risk to the environment continues to be minimised. Both closure and aftercare are overseen closely by the authorities – particularly the spending of funds set aside for this purpose.
What role do communities play when it comes to mine closure and rehabilitation? Mines have significantly benefitted local communities both socially and economically while making use of our natural resources. All mining and exploration activity must comply with relevant national legislation. Mining companies operating in Ireland in recent decades have worked responsibly to meet and maintain the high standards of compliance required, and to leave environmentally low-risk, safe sites for future reuse. Companies have, in a planned way, closed mines carefully, restoring these sites to agricultural uses and/or facilitated other potential industrial uses.
Lisheen gave a commitment to the local community to have the tailings facility 60% rehabilitated before mining ceased – and this was achieved
Is there anything you would like to add? Following the closure of Lisheen, most of the site infrastructure was removed. Wetlands were also created to trap excess run-off at discharge points. The buildings and infrastructure that remain on-site represent a permanent capital asset that facilitates continued economic activity, enabling other businesses and industries to establish on the site following closure. The site is now being repurposed as the National Bioeconomy Campus, with support from the EU, to promote circular economy projects in the agri-food industry. The electrical infrastructure installed to develop the mine was leveraged by Lisheen and others to develop wind farms, currently comprising 44 turbines that produce enough energy to fully power 70 000 homes. Other positive community acts included infrastructure improvements, such as roads, telecommunication upgrades, a replacement water supply scheme (providing high-quality water for local residents, funded by the company), and investment in local sports facilities and community halls. An extensive outplacement programme that was implemented by Lisheen prior to mine closure to upskill and prepare employees for replacement careers helped to reduce long-term unemployment in the area following the closure of the mine.
Prior to being rehabilitated, the Lisheen Mine was an underground lead and zinc mine
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TITA NIUM
www.lemaitre.co.za SOURCED AND MANUFACTURED IN SOUTH AFRICA
THE SUSTAINABILITY ISSUE | 2021
RESPONSIBLE MINING
A PARTNERSHIP
to keep girls in school
Glencore Ferroalloys has partnered with the Imbumba Foundation, one of the leading organisations involved in keeping girls in school, to assist female learners from their host communities.
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ccording to statistics, in South Africa a girl child misses up to 50 days of school in a year due to a lack of adequate menstrual hygiene support. While a few individuals and organisations have begun to shed light on the impact of this deficit, this issue continues to affect girl children in many different parts of the country. In August, Glencore handed over sanitary pads to the girls in communities near their operations to ensure sanitary pad supplies for a full year for each girl child. “We are very proud to be partnering with the Imbumba Foundation, as this initiative ensures that girl children are being kept in school during their menstrual cycle, elevating their dignity and self-esteem. Through this partnership, we are empowering and fostering confidence in young girls by removing obstacles that may limit their learning experience and negatively impact their future,” says Conroy van der Westhuizen, chief community and social responsibility officer at Glencore Ferroalloys. Keeping girls in school The Imbumba Foundation is a non-profit organisation established to bring about social change and economic upliftment within rural and economically marginalised communities in Southern Africa. The foundation’s flagship initiative, Caring4Girls, was established with
the aim to support indigent girls with sanitary towels, puberty education and menstrual hygiene to keep them in school. To date, the programme has empowered over a million girl children across South Africa and neighbouring countries. Caring4Girls will supply the sanitary pads that are of high absorbent quality, SABS approved, affordable and locally manufactured, which also contributes to job creation. These sanitary towels can be found at West Pack Lifestyle and Big Save, where all proceeds are redirected to the Caring4Girls initiative. Through this partnership, Glencore and Imbumba will donate sanitary towel 12-packs to 6 700 girls from schools near Glencore’s operations. “We are grateful and excited to partner with Glencore; it is through such partnerships that we can ensure that all girls, regardless of race and status, have access to equal opportunities educationally, economically and socially,” says Richard Mabaso, founder of the Imbumba Foundation. The partnership between Glencore and Imbumba is the start of a long-lasting relationship set to positively impact thousands of young girls. This year, South Africa celebrated Women’s Month under the theme ‘Generation Equality: Realising Women’s Rights for an Equal Future’.
School girls received sanitary pads to ensure they don’t miss class
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Eskom has been found to be the world’s biggest emitter of sulfur dioxide
RESPONSIBLE MINING
TIGHTEN THE ESG FOCUS OR FACE LITIGATION
Tobia is a member of the Golden Key International Honour Society
In addition to practising law, Merlita also lectures candidate attorneys in preparation for their Attorneys’ Admission Examination
Litigation on environmental, social and governance (ESG) matters is rising in volume – both globally and domestically – but there are various steps companies can take to mitigate the risks. By Merlita Kennedy & Tobia Serongoane*
Companies and state-owned power utilities globally are employing ESG policies and procedures in the energy sector. Eskom, however, has lagged in this regard
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ocial and investor pressure on mining and energy companies to report on ESG and consider renewable energy is immense. Recently, South Africa’s state-owned power utility, Eskom, was named by the Centre for Research on Energy and Clean Air (CREA) as the world’s biggest emitter of the pollutant sulfur dioxide (SO₂). Eskom on its own now emits more sulfur dioxide than China, the US, and the EU’s power sectors combined. According to the study by air pollution expert Mike Holland, these emissions contribute to high levels of ambient air pollution and to 2 200 air-pollution-related deaths in South Africa every year. Most of these deaths are due to SO₂ emissions, which form deadly PM2.5 particles once released into the air. The study poses a legal threat to the power utility, as climate change litigation is gaining momentum in South Africa, particularly in relation to air pollution. Growing importance of ESG ESG has risen to the top of the board agenda. Companies are increasingly aware that a failure to address these matters can be detrimental to a company’s business purpose, reputation, corporate values, approach to risk management, and relationships with host communities, investors, suppliers, customers,
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employees and other stakeholders. As ESG continues to grow in importance, the number of ESG litigation matters will become self-perpetuating. Companies and state-owned power utilities globally are employing ESG policies and procedures in the energy sector. Eskom, however, has lagged in this regard. Litigation risks The consequences of falling behind can be severe and far reaching – e.g. by falling foul of climate change litigation (i.e. class actions). There is increasing focus on whether a company is conducting its operations in a sustainable way, and without violating any human rights. In some cases, internationally and locally, both the state and a company were taken to task for not acting appropriately to improve air quality and thus the health and well-being of citizens. *Merlita Kennedy is a partner and Tobia Serongoane an associate at Webber Wentzel.
FOLLOW THE LINK Read the full story: https://miningnews.co.za/2021/11/09/tighten-the-esgfocus-or-face-litigation
WITS MINING DISTINCTLY EXCEPTIONAL
The Wits Mining Institute (WMI) is a platform of long-established expertise in mining-related fields of study dedicated to inform the emergence of a 21st Century model of mining that is both sustainable and competitive. The WMI seeks to influence the world through generating new knowledge, influencing policy, building strategic partnerships and leading society.
The Wits Mining Institute achieves this through its various interdisciplinary research units:
The Sibanye-Stillwater Digital Mining Laboratory (DigiMine) focusses on the application of advanced digital technologies in underground mining environments, and for the mine of the future with a primary aim to make it more safe, efficient and intelligent. The Responsible Mining Laboratory addresses the vital cross-cutting themes of policy, regulation, health, safety, community development and the environment, and for the mine of the future, with a primary aim to make it more safe, efficient and intelligent. The Skill Accelerator through which a range of postgraduate level and short courses are offered.
The Wits Mining Institute has been awarded two new research units:
• Successful Adoption of Technology Centred Around People (SATCAP) which will focus on gaining understanding into the challenges, effects and impacts of mining modernisation on people in the minerals sector, in terms of systems, technologies and processes, across all stakeholders. • Real Time Information Management Systems (RTIMS) with a research agenda framed in terms of gaining understanding to improve data sourcing, transmission, storage, dissemination, and information management tools, practices, and procedures for mines.
For more information www.wits.ac.za/wmi/
RESPONSIBLE MINING
SHIFT TOWARDS SUSTAINABLE MINING INCREASES The mining industry’s shift towards a greener, more sustainable and more community-oriented business model is accelerating as mining groups seek to maintain their social licence to operate and position themselves for long-term growth. By Nigel Beck & Mark Buncombe*
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he continued focus on climate change and on the well-being of local communities, particularly in light of the Covid-19 crisis, has meant that many mining companies are responding by accelerating the reduction of carbon emissions and addressing social issues. Anglo American, for instance, said in mid-2020 that it was pushing ahead with plans to convert its mine-haul trucks from diesel to hydrogen power. The group is launching a pilot project at its openpit Mogalakwena operation in South Africa. It has already taken delivery of its first fuel-cell truck and intends to produce ‘green’ hydrogen on-site using solar energy.
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BHP Billiton said early in 2021 that it had invested in a company seeking to manufacture steel in a far more environmental way than is the norm. With the industry now acutely aware of the need to operate sustainably, Standard Bank has seen a significant rise in interest in sustainable finance products, which are used to fund improvements in a firm’s environmental, social and corporate governance (ESG) performance. Targeting high-growth industries The rise of electric vehicles, driven by consumer preferences for more environmentally friendly products, is expected to boost demand for minerals
THE SUSTAINABILITY ISSUE | 2021
RESPONSIBLE MINING
Sustainable finance solutions will play an important role in helping Africa’s mining industry to adapt and attract capital from an investor base
used in batteries and electric motors, such as lithium, graphite, copper, cobalt and nickel. Platinum group metals (PGMs) and rare-earth minerals are also expected to benefit, with the growing hydrogen economy providing an additional boost. As the mining industry positions itself for this shift, it will play an important role in the transition to a more sustainable global economy. With 70% to 80% of the world’s available PGM resources sitting in South Africa’s Bushveld Complex and in Zimbabwe, Southern Africa will have a massive role to play in the decarbonisation of mining and the global economy. In addition to this, mining houses are taking steps to minimise their own carbon footprints and better
manage scarce water resources. The largest concern that the industry has is its ability to meet the increased demand for certain commodities in a sustainable way. The adoption of new energy sources used in extraction and production, such as hydrogen and solar, is already in full swing. The deep investments in cleaner technologies often result in efficiency gains, which is good for business. Regulators in South Africa are making it easier for mining houses to produce and procure their own energy. Given the country’s ongoing electricity supply issues, alongside its vast solar resources and advancements in technology, solar solutions are coming to the fore. And equipment manufacturers
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RESPONSIBLE MINING are positioning themselves to fulfil the needs of the industry. Upweighting societal and governance considerations Miners are also seeking to play a greater role in the communities in which they operate. As such, they are considering funding instruments such as social bonds to facilitate the development of employee housing and local infrastructure. Social upliftment has become an important consideration in South Africa’s mining industry, given the country’s inequality and developmental challenges, which have been exacerbated by the Covid-19 pandemic. The industry has already made significant strides in terms of improving safety records. And mining groups have leveraged their success with managing infectious diseases such as TB and ebola to effectively curb the spread of Covid-19, both within their workforces and the communities in which they operate. In countries where healthcare systems have struggled to cope with the pandemic, mining houses have played a particularly large role in safeguarding communities. This has the benefit of promoting their own long-term sustainability. Sustainable finance solutions – which tie the cost of funding to improvements in ESG performance – will play an important role in helping Africa’s mining industry to adapt and attract capital from an investor base that is becoming increasingly focused on sustainability. Bankers, investors and other financiers are focusing more closely on the corporate governance pillar amid the pandemic, since supply chain disruptions and other challenges are testing management teams. Firms with stronger governance structures tend to manage these situations better, thereby reducing repayment risk and, ultimately, their funding costs. Investors have become increasingly sophisticated in how they allocate capital. Boards and management teams are therefore spending considerable time on improving their ESG credentials, with a view to being re-rated by markets. However, mining groups are prioritising different ESG pillars according to the risk profile of the commodities they produce and the geographies in which they operate. Ultimately, their efforts should be aligned to the various stakeholder groups they work alongside. *Nigel Beck is head: Sustainable Finance and ESG at Rand Merchant Bank. Mark Buncombe is the former head: Mining and Metals at Standard Bank.
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Mark holds a BBusSci (Hons) from the University of Cape Town
Nigel is an accomplished sustainable finance and ESG specialist with over 20 years’ global experience
SIYANDA BAKGATLA PLATINUM MINE CREATING SHAREHOLDER VALUE AND SUPPORTING THE ECONOMY AND DEVELOPMENT OF THE REGION.
Employing about 5 200 fulltime employees and around 1 500 contractors, Siyanda Bakgatla Platinum Mine – known as Union Mine – is a producer of: • Platinum • Palladium • Rhodium • Iridium • Ruthenium • Gold • Chrome • Silver • Cobalt • Nickel • Copper.
WE TAKE OUR COMMUNITY COMMITMENTS SERIOUSLY We’re proud to have invested more than R60 million in our host communities through our Social and Labour Plan (SLP2), which focuses on infrastructure development, education and skills development, health, poverty alleviation, and enterprise development.
www.siyandapla�num.com
RESPONSIBLE MINING
WORLD GOLD COUNCIL MEMBERS COMMIT TO TCFD REPORTING Members of the World Gold Council have committed to reporting their positions and progress on climate-related risks in line with the recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD).
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he TCFD’s recommendations and reporting framework are now widely recognised as the preferred method for embedding climate change into the governance, strategy and risk management systems of organisations, and the means by which they disclose comprehensive and high-quality information on these factors to investors and stakeholders. According to Terry Heymann, CFO at the World Gold Council, climate change is the biggest threat of the 21st century and all industries need to show progress in responding to this. He added that investors are keen to better understand how their investments are being made climate-resilient in the face of a myriad of climate challenges, and the gold industry is eager to show how it is adapting to these challenges. This unified approach on climate-related reporting further clarifies the commitments already embedded in the World Gold Council’s Responsible Gold Mining Principles (RGMPs), which require companies to take action to combat climate change and report in line with accepted standards. “I am delighted that the World Gold Council membership has unanimously agreed to adopt TCFD reporting,” says Randy Smallwood, chair of the World Gold Council. He adds that making progress on climate change is a vital aspect of the gold mining sector’s commitment to responsible mining.
Significance of RGMPs The RGMPs, launched in 2019, represent a framework that sets out clear expectations for consumers, investors and industry stakeholders as to what constitutes responsible gold mining. “TCFD-aligned reporting, combined with the implementation of the RGMPs, will further demonstrate – to investors, consumers and other stakeholders – gold mining’s ability to make a positive and demonstrable contribution to social and environmental progress,” Smallwood says. All WGC members have committed to a three-year implementation timeline, and third-party assurance and public disclosure on that assurance. The new commitment to report via TCFD offers clearer definitions of how Principles 10.3 (Combating climate change) and 10.4 (Energy efficiency and reporting) will be implemented. “Through our own research over the last few years, we have been able to gather substantial evidence that the gold mining sector is in a strong position to reduce emissions in line with Paris Agreement targets,” Heymann says. He acknowledges that there is still much work to be done to reduce the emissions generated by the industry; however, there is progress. “Having our member companies commit to reporting via TCFD will help further demonstrate the industry’s determination to address climate-related risks and report on its progress in a clear and transparent way,” Heymann concludes.
FOLLOW THE LINK TO ACCESS VARIOUS REPORTS ABOUT GOLD AND CLIMATE CHANGE: www.gold.org/about-gold/gold-supply/responsible-gold/gold-and-climate-change
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THE SUSTAINABILITY ISSUE | 2021
RESPONSIBLE MINING
SLP PROJECTS FOR Rustenburg community
In early 2021, Impala Rustenburg handed over nine social and labour plan (SLP) projects to the local community.
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long with community leaders and representatives of the Royal Bafokeng Nation family and the Department of Mineral Resources and Energy, Impala (Implats) celebrated the handover of the completed projects, which were valued at over R94 million and created an additional 714 jobs in the area. Recognising the value of Impala’s contribution to the local community, Kgosi Leruo Molotlegi of the Royal Bafokeng Nation said, “On behalf of the Nation, we wish to thank Implats for its contribution towards our long-term vision for sports, community and youth development. A partner like Impala allows us to create facilities such as the Kanana multi-sport centre, which gives us a strategic advantage highlighted in our sports vision for not only sports development and creating the athletes of the future – they also contribute to the sports economy and local enterprises through potential eventing and hosting of youth and elite sports, arts and cultural events.” The SLP projects involved community leaders and representatives very early in the planning phases and covered a wide range of development initiatives, including school facilities, roads, a water scheme, and community facilities, in four communities where the need was the greatest. During the handover ceremony, Councillor Mpho Khunou, executive mayor, Rustenburg Local Municipality,
said, “As a municipality, we are extremely proud of these projects and we are confident they will continue to make an impact and leave a legacy.” He added that the projects provided a glimmer of hope for the youth. “We are also proud of what Impala has done during the difficult period of Covid. Last year, we reached out to Impala to help us deal with the challenges we were experiencing. Among many other initiatives, they adopted some of the schools to help matriculants recover lost time, and if you look at the results of those schools you can see the impact.” “Contributing to the upliftment of our communities is crucial to us. We’re an integrated part of the local community and if our community is struggling, our business in turn will struggle,” commented Mark Munroe, CEO, Impala Rustenburg. SLP projects The SLP projects that Implats has completed formed part of their first- and second-generation SLP undertaking.
The exterior of the Kanana Multipurpose Centre
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RESPONSIBLE MINING They include: • Ramotse Community Centre in Luka: This project included the renovation of Ramotse Community Centre, including roofing, tiling, painting, rewiring, plumbing work, and garden improvement, as well as the construction of a new workshop. • Luka, Makgotla Offices: 15 fully furnished Makgotla Offices were constructed, with a gathering area for about 120 people, offices, ablution facilities, paved walkways, parking area, and garden renovation. • Luka, Roads and Stormwater Channel: Internal roads were constructed from gravel to paved roads with parallel water channels. • Luka, Water Scheme Upgrade: A dedicated water pipeline was installed from ground level in Luka into an area in Mogono. A pumping station was constructed to transfer water at a high rate from the storage into the elevated steel tank to supply the area. • Luka, Mogono Hall Renovations: The hall had been vandalised and posed a safety risk to the community. The project included painting, roof sealing, electrification, plumbing and landscaping.
• Kanana, Roads and Stormwater Channel: Roads and stormwater channels that link to existing systems were constructed. • Kanana, New Multipurpose Centre: The centre provides access to public facilities, and consists of a multipurpose indoor sport facility that doubles as a hall, and comprises a library, offices, ablution facilities, a kitchen, and paved parking facilities. The transformer and sewer plant were also upgraded to accommodate the new building and nearby schools. • Kutlwanong, Road Upgrade: The main road leading to Kutlwanong School for the Deaf was a dirt road, and the school requested Implats to upgrade this road to a paved road. • Lefaragatlhe, Sports Facility: Multi courts for netball and basketball were constructed and fenced off. “We are proud to officially hand over these projects today, and we hope to see the residents of the various communities benefiting from them for many years to come,” Munroe concluded.
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SBPM initiatives to empower communities Siyanda Bakgatla Platinum Mine (SBPM) is a rapidly growing, nonlisted, black-owned emerging platinum group metal mining and processing business. The company’s sustainable development strategic focus area for the 2021 financial year has clear safety, health and environment (SHE) as well as social performance (SP) objectives. SBPM has various sustainability initiatives to benefit host communities
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BPM leadership has set SHE and well as SP initiatives and targets that need to be achieved in the financial year. SBPM’s Social Performance Department manages all its socio-economic development programmes. SHE initiatives and targets: • empower the team supervisors – recognise and empower the supervisors to reduce injuries and ensure compliance to our standards framework • automate reporting to receive real-time underground performance data. Social performance initiatives: • to have highly functional community engagement forums • stakeholder relationship base • expedite the implementation of the agreed SBPM social and labour plan (SLP) initiatives • for sustainable local economic development (LED), SBPM aims to further implement the planned community-based enterprise development (ed) programme projects • to ensure SBPM has an informed SLP submission. Valuing social and relationship capital One of the main objectives of the SLP is to ensure that mining uplifts the socio-economic environment of the regions where mines operate. At SBPM, compliance to the SLP and mining charter is only one of the outcomes of reasons we channel significant financial capital in building and strengthening community’s social and relationship capital.
“Indirectly, we develop the local economy by the spending patterns of our workforce and contracts. Directly, we stimulate the local economy by our supply chain procurement practices. We are focused on purchasing as many quality goods, consumables, and services from black-owned local businesses as possible,” says Hope Tyira, executive head: Sustainable Development, SBPM. He further adds that the LED programmes are aimed at developing black-owned businesses to the point that they can supply quality goods, services and consumables in the specified quantities needed and within the specified delivery timeframes. SBPM’s preferential procurement targets are determined by the Mining Charter III targets. Based on these, SBPM’s supply chain management assesses the current and applicant suppliers of goods, services and consumables against these targets. “We prioritise the selection of historically disadvantaged South African (HDSA) owned companies.” As a secondary selection criterion, SBPM measures if these businesses are specifically local or not. Covid-19 impacts resulted in dramatic spending shifts. “For the reporting year, we spent R532 million on local HDSA businesses. We also spent R1.6 billion on goods, services and consumables procured from black-owned companies,” explains Tyira. SBPM intends to create more supply opportunities for black-woman-owned suppliers and increase procurement from small- and medium-sized HDSA businesses. “Most of the LED and SLP engagements were done jointly with our material stakeholders, specifically local municipalities, traditional leaders and governmental departments,” concludes Tyira.
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RESPONSIBLE MINING
ILLEGAL MINING:
THE VICIOUS CIRCLE OF UNFAIR COMPETITION It is often concerning that it is acceptable for construction companies and municipalities to excavate material from illegal borrow pits for the duration of specific projects and disregarding any wrongdoing in the process. By Nico Pienaar*
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t is not always understood what mining is. The Mineral Petroleum Resources Development Act (No. 28 of 2002) states that once a mineral is taken away from its natural state and put in another form, it is or has been mined. The consequences of illegal mining are that many unregulated excavations are carried out all over the country. The disastrous effects these little diggings have on the environment, surrounding communities – as well as the negative effect and impact on legally operating quarries – are rarely understood. Unfair Competition In South Africa, we constantly hear about the terms ‘unfair competition’ and ‘collusion’. If we look at this in the surface mining industry, we see a vicious circle of unfair competition. Unfair competition jeopardises the future of all companies in this part of the mining industry. However, we constantly have new legislation – more suited for big mines – forced upon smaller legal operations. This obviously does not apply to illegal operations. There is a constant increase in the costs of compliance by legal operations, yet we tend to
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have very poor implementation of the legislation. The only ones who get attention are the legal quarries and, again, a blind eye is usually turned to the illegal sites. There is limited control over those who randomly start digging. The main regulator – the Department of Mineral Resources and Energy (DMRE) – has no vigour or willingness to focus on these operations. This all leads to unfair competitiveness and the compliant companies lose their competitiveness, as they have various unfair competitive ‘enemies’ – the illegal operations, government and semi-government departments doing the digging. At the same time, these parties are also operating under a regulating authority that is obviously turning a blind eye to the offenders. This ultimately contributes to the industry having a bad image and the illegal non-compliance part of the industry getting away with no consequences. On the flip side, legal operations are burning themselves to stay legally compliant. It is important that the illegal mining industry in its entirety be investigated by the competition regulator and SARS.
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Illegal mining has negative implications for the environment
Other issues Much of the aggregates extracted are used by civil works. Companies, especially those registered on the Johannesburg Stock Exchange, should not purchase material to do infrastructure work that is illegally obtained. Again, regulators, SARS and authorities should focus on the purchase of the materials used – and if this is/was not fully legally compliant, severe penalties should be implemented. Companies should be warned about purchasing illegal materials. There are many examples of illegal landfilling, backfilling and dumping of waste taking place. Legal operations in terms of mining, environmental and water legislation must strictly comply with the suitability of such a site to be used for these operations mentioned above. There is nearly always poor environmental performance and/or bad site rehabilitation. Once again, legal operations must have very well-defined plans on how to rehabilitate sites, as well as secure a special fund for rehabilitation. Not so for illegal operations. Illegal, non-compliant operations have unsafe, unhealthy and dangerous working conditions. The legal operations by comparison have a flood of
DMRE inspectors visiting them. But our members bear witness to the fact that few, or often no, visits are paid to illegal operations in their vicinity – clearly an indication that illegal operations are the way to go, as they’re cheap, avoid costs associated with compliance, avoid various other fees... you name it. The payment of correct wages and other employment conditions need to be adhered to and it’s hard to understand why the Department of Labour and the trade unions do not focus more of their attention on informal and illegal operations. Also, they should look at the contracts between the users – which are often big companies – and the illegal suppliers. Real problems What we see when dealing with illegal mining is that there is an underground economy – a shadow economy with illegal markets. All of these result in taxes not being paid. These operations have no accounting standards and would result in breaching the financial rules – something SARS should look into. Suppliers of machines and other suppliers who work with these illegal operators have to deal with issues such as late payment, non-payment and other
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RESPONSIBLE MINING Illegal, noncompliant operations have unsafe, unhealthy and dangerous working conditions
unsavoury practices. It should be pointed out to all such suppliers that payment is not guaranteed when it comes to dealing with illegal operators. Likewise, companies with reputable brands must be warned that they can do serious harm to their reputations by associating with illegal operators. Then, there is the issue of transporting the materials, which is a major concern in terms of damage to road infrastructure and road safety. Overloading is a major issue, as it can damage roads in a short space of time. Under-payment of drivers is also an issue, as are the long hours that many of the drivers are forced to work. We feel that traffic and roads departments should intervene and the Department of Labour should send inspectors to check on driving hours, wages and conditions of service. Those who purchase illegally mined minerals should also not be surprised to find that the aggregates supplied probably do not comply with national quality requirements and standards. It is clear that illegal operations gain their price competitiveness through a number of cost-cutting measures and avoidances, such as: • tax avoidance • avoiding the costs of compliance • having no environmental management • ignoring health and safety management • improper transportation • no environmental levies and rehabilitation funds • no land rehabilitation
• a lack of compliance with construction regulations and standards • no need for social security and salaries for employees • little or no external waste treatment • free access to land • avoiding other taxes, like landfilling • no focus on material quality management. In conclusion In Government Gazette No 44607 (dated 21 May 2021 and entitled ‘National Mine Closure Strategy 2020’), there are various relevant and interesting comments made that have been included in the document by the DMRE that we should bear in mind. It seems that this department writes about, but does not implement, legislation relating to illegal mining. The closure of mines further results in the externalisation of environmental degredation, which has a negative social and economic effect on surrounding communities. The problems associated with such objetives often lie with implementation and enforcement, rather than the legislation itself. ASPASA and its members are playing an active role in reporting illegal operations and we hope that government will do its part and start enforcing legislation when it comes to such illegal sites. *Nico Pienaar is the director of ASPASA (Aggregate & Sand Producers Association of South Africa).
NATIONAL MINE CLOSURE OBJECTIVES • To manage the closure of mines in a demarcated area in an integrated and sustainable manner, hence ensuring that these mines work together to achieve a self-sustaining ecosystem after closure. • To ensure that mines do not impact negatively on the livelihood of adjacent/interconnected mines in a demarcated area. • To promote a strategic approach to managing water at mining and mineral processing sites so that water is more efficiently managed and valued, and to develop a post-closure mine water strategy for an area. • To make provision for post-closure stewardship and socio-economic sustainability, to continue monitoring the implementation of individual and regional mine closure plans. • To integrate environmental management and related closure activities with socio-economic interventions and align these with development of a post-closure economy, by rationalising current wasteful spending on environmental management programmes, social and labour plans, and corporate social investment by reducing the duplication of efforts and spending, as well as aggregating available funding for coordinated regional projects.
Nico Pienaar has been the director of Aspasa for more than 20 years
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Source: National Mine Closure Strategy – 2020
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WATER PROJECTS
to reduce fresh water usage Anglo American Platinum is making ‘significant progress’ in its goal to reduce its dependency on fresh water at its operations in the North West and Limpopo provinces.
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he company’s potable water usage as a percentage of total water usage was 29% in 2020, down from 38% in 2016. Hermien Oberholzer, principal engineer: Water Management, Anglo American Platinum, says this was achieved in three main ways: reusing water on-site; embarking on projects to use less water; and using poor quality water that was not used by communities, like municipal wastewater. The company currently uses: potable water, mostly provided by a water board or municipality; raw water from rivers, dams and boreholes; and treated effluent from municipalities. Potable or good quality raw water may be used domestically, while agriculture mostly uses raw water or, depending on the crops, some treated effluent. The mining industry can use poor quality water such as treated effluent, although potable water is needed for some of its processes. Water-saving initiatives To reduce its fresh water needs, the company has invested heavily in municipal wastewater treatment initiatives. This includes upgrading the Polokwane wastewater treatment plant at a cost of around R118 million, and an ongoing effluent treatment project in Rustenburg, which will reduce its dependency on potable water from Rand Water, while improving water security for the town. “An added benefit of our wastewater projects is that we’re paying the Polokwane, Mokopane and Rustenburg municipalities for their treated effluent, providing them with a much-needed additional income stream where previously none existed,” says Oberholzer. Other water-saving measures include the possible use of floating solar panels as dam covers at Anglo American Platinum’s Amandelbult mine, which saves energy while reducing evaporation losses on its pollution control dams. With an average evaporation rate of around 1 800 mm per year, early indications are that floating solar panels may reduce evaporation by 85%, resulting in a fresh water saving of about 38 million litres a year. At the Mogalakwena mine, the company has installed seven scavenger wells to mitigate the pollution plume
migrating around its Blinkwater tailings storage facility, resulting in the recovery of around 600 000 litres of water a day. Mogalakwena’s return-water dam has also been dredged, which helps maintain a high water level while avoiding spills during the rainy season. The Polokwane Metallurgical Complex started the process to avoid a pollution migration and high groundwater levels around the slag dump through scavenger boreholes. The water from the scavenger boreholes will be pumped to pollution control dams and reused, reducing the dependence on water brought on to site from elsewhere. “South Africa is a water-stressed country, and all the catchment areas in which we operate – Crocodile West, Olifants, Sand and Mogalakwena – are under pressure. For Anglo American Platinum to operate sustainably, reduce our impact on the environment, and give our communities greater water security, we must reduce our fresh water use and manage our water usage at our operations,” says Oberholzer.
Community water supply in Mogalakwena
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ADVANCING SOCIAL AND ENVIRONMENTAL SUSTAINABILITY WITH UNGC Exxaro Resources recently delivered its United Nations Global Compact (UNGC) Communication on Progress (COP) document – which is a requirement to maintain its status on the voluntary leadership platform that focuses on the development, implementation and disclosure of responsible business practices.
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he UNGC is a call to companies worldwide to align their operations and strategies with 10 universal principles in the areas of human rights, labour, environment and anticorruption, and to act in support of UN goals embodied in the Sustainable Development Goals (SDGs). Exxaro has been an active signatory to the UNGC since 2007 and every year affirms its commitment in implementing the UNGC principles. In its 2020/21 COP report, Exxaro reiterates in detail its policies and commitments to the principles of human rights, labour, environmental and anti-corruption measures aligned with the SDGs. The COP report points out that Exxaro features in the latest Vigeo Eiris ranking of the 100 Best Emerging Market Performers for its approach and ongoing dedication to social responsibility. The Vigeo Eiris ranking is updated every six months, in June and December, and the top 100 performers are selected from over 850 companies in 32 sectors of 31 countries. Exxaro also ranked third in the Transparency and Corporate Reporting: South Africa 2020 report among 100 South African companies under scrutiny for transparency and the implementation of anti-corruption programmes. “We take our commitment to the UNGC very seriously. As one of thousands of participants of the UNGC across the 160 countries, we are pleased to be part of this growing movement to more conscious environmental and social business practices,” says Mxolisi Mgojo, CEO, Exxaro. “We believe and stand for responsible ways of
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mining and building inclusive partnerships that benefit from responsible mining activities. SDGs and socio-economic challenges “The SDGs are particularly relevant in South Africa with our many socio-economic challenges. We want to be part of the solutions that create a more just and equitable society that meets the needs of all its people. This vision drives our thinking around all issues of sustainability and making a difference in our host communities, where we have mining and renewable energy operations, and the country at large,” says Mgojo. Exxaro’s ethical principles are embedded in its values, operations, stakeholder engagements, and Sustainable Growth and Impact Strategy, which all align with its endeavours to meet the SDGs. Every aspect of the company is focused on sustainability and corporate responsibility. Mgojo adds, “We believe that our voluntary participation in the UNGC advances the case for responsible business practices and encourages our stakeholders to do the same.” He concludes that the UNGC holds the company accountable to a global standard “from how we mine to what we mine, as we strive to become a catalyst for economic growth and environmental stewardship”. Launched in 2000, the UNGC includes more than 9 500 companies and 3 000 non-business signatories based in over 160 countries and spanning more than 70 local networks.
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RESPONSIBLE MINING GLOBAL TAILINGS REVIEW
GLOBAL INDUSTRY STANDARD on Tailings Management The Global Industry Standard on Tailings Management establishes the first global standard on tailings management that can be applied to existing and future tailings facilities, wherever they are and whoever operates them.
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trengthening current practices in the mining industry by integrating social, environmental, local economic and technical considerations, the standard covers the entire tailings facility life cycle – from site selection, design and construction, through management and monitoring, to closure and post-closure. With an ambition of zero harm to people and the environment, the standard significantly raises the bar for the industry to achieve strong social, environmental and technical outcomes. It elevates accountability to the highest organisational levels
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and adds new requirements for independent oversight. The standard also establishes clear expectations around global transparency and disclosure requirements, helping to improve understanding by interested stakeholders. The standard was developed through an independent process – the Global Tailings Review – which was co-convened in March 2019 by the United Nations Environment Programme, Principles for Responsible Investment, and the International Council on Mining and Metals following the tragic tailings facility collapse at Brumadinho, Brazil, on 25 January 2019.
THE SUSTAINABILITY ISSUE | 2021
RESPONSIBLE MINING
UNDERGROUND AIR QUALITY MANAGEMENT The underground mining environment is unquestionably harsh. Confined spaces, minimal ventilation and underground vehicle emissions can compromise the air quality. Systems that monitor air quality underground are critical for the health and safety of employees, as well as the environment.
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oor underground air quality has negative impacts for the environment. This microenvironment and the mobile machines operated there cause exposure to strongly polluted underground air, which adversely affects the health and working performance of the underground mine workers. Inhalation of particulate pollution is associated with health risks including heart disease, strokes, lung cancer and chronic obstructive pulmonary disease. In underground mines, mobile mining equipment is critical for the production system. Unfortunately, such equipment subsequently compromises the air quality underground. Air pollution is caused by solid and liquid particles and certain gases that are suspended in the air. These particles and gases come from underground mobile equipment and any other moving machinery exhausts. Addressing underground air pollution The Mine Health and Safety Council did a study titled Develop Methodologies for the Measurement of Diesel Exhaust Emissions (DEE) and Diesel Particulate Matter (DPM). The scope of the study was to identify existing techniques that could be adopted to detect DPM in the environments with restricted ventilation such as in underground mining working sites. According to the study, current technology has made solutions available to provide continuous monitoring
of harmful, ambient concentrations of DEE and DPM in underground mining environments. DisproTech SA has a range of products and services that monitor diesel engine emissions. The company is able to conduct a diesel combustion analysis. Analysing the exhaust stack of diesel engines is important for maximum fuel savings and extending engine life. In addition, scientists and doctors continue to find possible links between fossil fuel exhaust emissions and many different health-related problems. Another service offered is predictive failure analysis and preventative maintenance. Over time, wear and tear on diesel engines can be determined through emissions testing. However, through data analysis and advanced pattern recognition, preventative maintenance and predictive failure can be presented – which can save millions in lost production.
SMG200M Particle Mass Analyser
Infralyt N Analyser
Opacilyt 1030 Smoke Meter
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RESPONSIBLE MINING
Sustainable mining with Tega DynaPrime™ liners Tega Industries mill linings provide optimal grinding solutions for major mineral processing plants. Grinding mills, especially SAG mills, are often exposed to wear and tear caused by impact and abrasion during milling. As such, mill liners are essential for milling machines because of their ability to protect mills from severe wear and tear that takes place during the milling process.
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ccording to Vishal Gautam, GM at Tega Industries, DynaPrime™ liners have various advantages such as easier handling of the liners and increased mill availability. Gautam further adds that this range of mill liners gave Tega a competitive advantage, which encouraged the company to tackle bigger mills in the global market. The company has since
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Bigger and lighter
DynaPrime™ is bigger and lighter compared to a steel liner and has a reduced installation time. Gautam explains that instead of one particular processing plant waiting between seven and nine days for the installation of liners, waiting time has been reduced to approximately three days with DynaPrime.™ As a result, mines gain additional production days, as they need not experience downtime due to liner installation. “For a mine, getting extra days of production with every installation is a huge advantage,” Gautam says.
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become a dominant player in the market with its DynaPrime™ liners. Tega DynaPrime™ and sustainability In addition to having numerous advantages for grinding mills and processing plants, Tega DynaPrime™ also contributes to sustainability in the mining industry. Gautam outlines three ways in which DynaPrime™ supports a sustainable mining environment.
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DynaPrime™ liners do not need vast manpower for installation. “Back in the day you’d need five to ten people to install steel liners inside the mill. Now, you can reduce that number to do the installation of such liners,” Gautam explains. During the installation of the liners, safety aspects of the liner have been improved whereby its installation can take place from the outside the mill, with fewer people needed inside. This further improves the safety aspects around the mill as well. “That is a very big advantage for any mine operation or processing plant. To have an injury on-site for any reason is not sustainable because the life of a person has value more than anything else.”
Depending upon the operating conditions, the liners often last longer than steel liners, and mines can run more continuously, avoiding regular stoppages during the year. “The duration of the stoppages is something we have improved on, while the number of stoppages yearly is also being reduced,” Gautam says. Fewer stoppages subsequently lead to increased tonnage production, which leads to more revenue for mines. Servicing, product quality and design of Tega DynaPrime™ take on a customer-centric approach. “That’s how we are bringing in the product, supporting the customers, and increasing their mine life. And that’s how we are doing our bit to improve environmental sustainability,” Gautam concludes.
Less manpower and increased safety
Reduced mine stoppages
Moolmans is ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certified and is a certified Level 3 BBBEE service provider
An ideal liner for high-aspect SAG mills from 34 to 40� in diameter
maximizes mill
availability Resilient design cushions high-energy impacts and avoids liner cracks
unlocks mill
capacity
Unique design ensures better control on lifting angle throughout liner life
info@tegaindustries.co.za | www.tegaindustries.co.za