Recent statistics released by StatsSA indicate that the South African mining sector continues to contribute immensely to the country’s GDP, despite the challenging economic environment due to the COVID-19 pandemic. This good performance is mainly attributed to the high commodity prices of gold, platinum group metals and iron ore.
In particular, the economic growth for gold mining in the past two years has seen various mining houses declaring very healthy profits in their annual performance reports. This is an indication that there is an opportunity for mining companies to pursue abandoned gold mining assets, particularly those closed for reasons related to liquidation and low-grades.
Blyvoor Gold Operations, Central Rand Gold Mine (CRG), and Mintails, are examples of gold mining assets that were abruptly discontinued due to liquidation, which subsequently exposed local communities to environmental and social risks. The adverse effects they pose remain unaccounted for, which cause challenges for stakeholders, namely regulators, local
municipalities, landowners, property developers and communities at large.
The biggest challenge at hand is that most of these operations were closed with no financial commitment towards rehabilitation of the area post the closure of the mine, despite this being a requirement by the Department of Mineral Resources and Energy (DMRE). We also cannot ignore the fact that there is a significant disconnect in the Mineral and
Petroleum Resources Development Act (MPRDA) and the Companies Act regarding liquidated mining companies, which limits the powers of the DMRE on enforcing post mine closure requirements.
It can further be argued that Section 28 of National Environmental Management Act (NEMA) empowers the DMRE as a competent authority to hold the directors of the liquidated mining companies to account for environmental damages however, this has to date not proven to yield the required accountability due to reasons including transitional arrangements in the MPRDA and NEMA.
Despite all of this, it is encouraging to see that companies such as Pan African Resources and Amatashe Mining have shown an interest in pursuing some of the assets mentioned above. This will grant regulators the opportunity to rectify the loopholes and ensure that there is a full implementation of closure requirements for sustainable livelihood post mine closure, as proposed in the Draft Mine Closure Strategy published by the DMRE for comments.
Notwithstanding that the Mine Closure Strategy is still a draft; it however proposes strategic plans that can be implemented immediately to remedy the current challenges experienced by current mine closures for future sustainable development; a phenomenon which remains a huge challenge for regulators to resolve with current abandoned mines.
A win-win opportunity for all
The interest shown by some companies to resuscitate these assets, as well as more interest to come should be welcomed by all stakeholders involved as it presents many opportunities:
• Brings hope to local communities for rehabilitation of their environment as well as job creation
• The DMRE is now able to rigorously implement mine closure strategies
• Prospective miners to advance their environmental, social and governance (ESG)
strategies and investments
For the past century, gold mining has propelled the economic development of Johannesburg to the world-class city status it holds today. If this is anything to go by, one can only suggest and encourage that all stakeholders involved must proactively support these ESG investments as these could potentially assist in ameliorating the economic hardship brought by the COVID-19 pandemic through much needed job creation, local economic development, and sustainable livelihood of local communities.
This support should go far in attracting prospective investments in the gold sector and to retain glory to what was previously the cornerstone of South Africa’s mining industry.