South Africa has a water-constrained mining-based national economy, not yet fully transitioned to a beneficiation, industrial or services economy. The mining sector is in crisis, a situation driven by various factors. In a survey of mining executives conducted by the Fraser Institute in 2013, South Africa was ranked 109th out of a possible 112 jurisdictions in terms of labour relations, with 17% of all executives canvassed noting their unwillingness to consider investment.
This is a serious problem because in 2012 an average South African miner produced 39% less gold than in 2002. The decoupling of productivity from the wages earned by labour is only one of the factors. According to the Fraser Institute, the biggest single factor making the South African mining industry uninvestable is regulatory duplication and policy inconsistency. It listed South Africa as the worst mining jurisdiction in the world in 2013.
One of the key elements of this is the Greenfields logic embedded in our policy and legislation. This is totally at odds with the Brownfields reality of our gold and coal mining sectors. Central to this is the narrative of blame-seeking that was unleashed in 2002, when the first decant of acid mine drainage (AMD) occurred from 18 Winze Shaft in the Western Basin of the Witwatersrand Goldfields.
A core element in the National Water Act (1998), reflected in other key legislation such as the National Environmental Management Act (1998), and almost all policy related to mining, is the Polluter Pays Principle. This is consistent with international best practice, and is clearly a logical principle to aspire to. However, the devil, as always, lies in the detail. In this article the facts of the matter, insofar as they apply to the gold mining sector, will be discussed.
During the years of international isolation, when South Africa was increasingly regarded as a pariah state, comprehensive economic sanctions were progressively applied. This had a significant impact on the South African economy. The state relied increasingly on revenues from the gold mining industry to keep it afloat. It can be argued that it was the reliable and growing revenue from gold that enabled the embattled state to resist the debilitating impact of economic sanctions for as long as it did. Central to this was a major event that took place in 1975 – Operation Savannah – the intervention by the SADF into Angola. This was a pivotal moment in the evolution of the national security paradigm in place at the time. In an effort to protect the goose that lays the golden eggs, the then Minister of Water Affairs entered into an agreement with the gold sector to, effectively, nationalise the environmental liability inherent to the mine tailings dams. This is known as the Fanie Botha Accord, with the legitimacy of the intent today disputed by environmental activists working in the AMD space. It is not disputed by the mining industry, however, which regards it as the official policy with which they complied.
The next fact that is relevant is the ratio of gold to uranium found in the many tailings dams of the Witwatersrand Goldfields. What is generally unknown to the public is that for every ton of gold mined, between 10 and 100 tons of uranium was also brought to surface, depending on the reef band. In fact, some of the reefs were a uranium play, with gold as a secondary by-product. Uranium was insignificant as a mineral until the advent of the Manhattan Project and the discovery of nuclear fission, so it was simply discarded as waste. The nuclear implications made uranium extremely important in terms of national security but it was shrouded in secrecy which effectively took all knowledge out of the public domain. Today, democracy has freed scientists to report without risk of legal sanction or career limitation. We know that the tailings dams across the Witwatersrand Goldfields contain a staggering 430 000 tonnes of uranium as either tri-uranium octoxide (U3O8) or uranium dioxide (UO2), also known as uraninite. This makes Johannesburg potentially the most uranium contaminated city in the world. Recent scientific work has shown that three dumps – the Cooke Cluster and the Millsite Complex – are the actual epicentres of risk.
Significantly, the Millsite Complex is the site of the AMD decant from 18 Winze Shaft that has been flowing more-or-less continuously since 2002, despite the best efforts by government to draw the water down to what is known as environmental critical level (ECL).
In a peer reviewed study published in the journal Water International in 2015, an economic model was presented for assessment by the AMD policy reform team constituted by the Minster of Water and Sanitation, Nomvula Mokonyane. That model illustrated an economic reality ignored by the lawmakers when they drafted the NWA and NEMA – for the Polluter Pays Principle to be viable, it has to be applied consistently throughout the entire life of a mining operation. If it is applied retrospectively, when the majority of the ore body has been depleted, as we have in the Brownfields sites of the Witwatersrand Goldfields, it triggers disinvestment and hastens the demise of the industry.
The Old Mutual Gold Fund Manager, on completing a statistical analysis of performance, stated on 17 June 2014: "Predicting the future of gold mining in South Africa has become easy... Having peaked in 1970, it has fallen to a 109-year low of 167 tons in 2012... For exactly 20 years now SA's declining output has followed a distinct linear pattern (if we disregard the effect of the 2012 strike). In itself, this is highly remarkable since it has completely disregarded the law of price elasticity: no supply response at all following bullion's spectacular price increase after 2001... After more than 135 years ... SA is likely to hoist its last skip of gold-bearing ore from the once giant Witwatersrand deposit in 2019... Some 130 000 direct jobs will be lost, with many more disappearing on the periphery in goods and services. By 2020, some R25bn of earnings annually will have stopped flowing to employees. Sadly, the poor will be particularly hard hit in the labour supplying areas, where mineworkers tend to have many dependants."
The important issue to raise is, what risk will arise to the residents of Gauteng?
In a peer reviewed study published in the New South Africa Review (2015), the case was presented for the release of uranium into the environment centred on the city of Johannesburg. The logic is simple. Locked away in the many tailings dams that litter the Witwatersrand landscape is at least 400 kilotons of uranium. This will become mobilised: either by wind in the form of dust with a fallout area as yet undetermined or by water in the form of sediment migrating through wetlands into rivers and dams.
This poses the question, if Greenfields logic applied to Brownfields reality drives disinvestment, then why not reform policy and law to attract capital back into those sites?
In my view it is here the argument becomes compelling. In a technical study conducted for the Gauteng Legislature in 2011 by the Gauteng Department of Agriculture and Rural Development (GDARD), it was shown that a significant inward migration of people has taken place since the abolition of Influx Control in 1994. A study conducted by Dorothy Tang and Andrew Watkins in 2011 shows that the majority settled on land adjacent to tailings dams; the number was 400 000 at that time. All things being equal, this figure is expected to rise to over a million by 2025. This land, known technically as mine residue area (MRA), is hazardous for specific reasons. Firstly, it is geotechnically unstable because it is underlain by gold reef. Secondly, this shallow gold reef is being illegally mined by so-called Zama Zama miners. Thirdly, it is within the safety exclusion zone required to separate people from uraniferous waste. Finally, it is littered with deep shafts, all hazardous because the capping has been removed by Zama Zamas to gain access to the remaining reef.
Therefore, if we can reform policy and the law to attract capital back to these Brownfield sites, we can rehabilitate them as a public good, without an additional burden to the taxpayer. This can be achieved through what is known as Closure Mining. For every ton of tailings left as residue on MRA land, there is about 1/3 of a gram of gold, but between 50 – 200 grams of uranium. The latter is the hazard to be mitigated but the former is the means by which this can be done. In most Brownfield sites today there remains a potential life of 15 – 20 years of mine left in reprocessing the dumps. The revenues from gold are sufficient to pay for the operation. The benefits arising from this include the retention of jobs in an industry currently shedding jobs by the thousands; the permanent removal of a persistent hazard (uranium); the retention of geotechnical stability needed to bring MRA back into future economic use; and the disposal of waste back into the void from whence it originated.
Work underway on marginal mines in the Western Basin of the Witwatersrand Goldfields has shown that this is viable. In fact, it is technically possible to remove all the hazardous tailings upstream of Lancaster Dam within the next five years. This is possible only if there is a high level of cooperation between the state as regulator, the legislature as lawmaker, society as an affected party, and the mining industry as a major player. Potentially, some form of ecological activity and biodiversity could return to the Wonderfontein Spruit, currently the most polluted river in the Goldfields, draining the most uranium contaminated portion of Gauteng province.
This does not absolve the mining industry of its obligations. Significantly, the Fraser Institute study found that two of the most favourable mining jurisdictions in the world are Sweden and Finland, both have very high standards for environmental management. What makes them favourable is the predictability of their regulatory authorities and the consistency of their policy and legislative frameworks.
I believe that we need to apply our collective minds to this endeavour, for the alternative is too ghastly to contemplate. The persistent release of clouds of uranium rich dust over the agricultural areas of the Free State, Mpumalanga and beyond poses an as yet unquantified but very real risk. The erosion of uraniferous sediment into the wetlands, streams and dams has already been documented by science. Yet this is all avoidable if only we can distinguish the incompatibility of the seductive logic of Greenfields environmental legislation when applied to the ugly reality of a Brownfields landscape.
Legal and policy reform can attract capital back into Brownfields sites, so we need consider what is in the best interest of society in a mining economy that has not yet transitioned to a post-mining reality.
Prof Turton is with the University of Free State, Centre for Environmental Management