MINING (151)

FSE's comments are attached for download.

FSE IN SA MINING

Monday, 17 August 2020 17:32

The FSE contributed to the article titled “Caught between a rock and hard place” by Nellie Moodley on page 33 of the magazine.
An advertisement of the FSE’s activities appears on page 14 of the magazine.

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

Notification letter attached for download

Pelicam Award for Jozi Gold

Monday, 20 July 2020 22:50

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

Mind the Gap consortium launched the new website www.mindthegap.ngo featuring five strategies corporations use to avoid responsibility for human rights abuses: 1.Constructing deniability; 2. Avoiding liability through judicial strategies; 3. Distracting and obfuscating stakeholders; 4.Undermining defenders and communities;  5. Utilising state power. These harmful strategies manifest themselves in a wide array of actions by corporations that obstruct justice, distort the facts and frustrate remedy for affected communities.

 

The Mintails case will be part of the evidence base for this website and Lonmin’s involvement in the Marikana massacre is also included. The case studies featured on the new website highlight the wide prevalence of harmful corporate strategies in practice and amplifies the urgent need to close the governance gaps that are sustaining a global system of corporate impunity.

 

Subjoined hereunder is the report on Mintails.

in South Africa

CASE STUDY: MINTAILS’ STRATEGIES OF DISENGAGEMENT IN SOUTH AFRICA


Photo: SOMO

Last updated: 10th July 2020

The bankruptcy case of the South African mining company Mintails provides an example of irresponsible disengagement by investors, leaving the state of South Africa and the local communities around the mines with the burden of uncovered post-mining environmental rehabilitation costs.

Mintails S.A. (Mintails), a fully-owned subsidiary of Mintails Limited (MLI), held three mining rights in South Africa – West Wits Mining, Minerals and Mining Reclamation, and Mogale Gold. In the 2010s, Mintails was granted these mining rights by the Department of Mineral Resources (DMR), subject to adequate provision for environmental rehabilitation liability. However, the mining rights were never fully issued, as Mintails failed to provide multiple financial and social provisions.[1]

Despite the lack of a valid mining licence, Mintails was allowed to continue mining operations, amid numerous documented complaints of environmental contraventions.[2] After several statutory notices from DMR, in which the department asked Mintails to comply with environmental regulations and to provide adequate remedy for the damages it had caused, the Director General of DMR directed Mintails to provide a quarter of all the due costs in October 2014. The company was required to submit a six-month payment plan to provide the remaining sum.[3] Unable to raise this money, Mintails filed for business rescue a year later.[4]

Several actions by MLI and Mintails resulted in diminished environmental liability. First, Mintails hired two consultants who provided substantially downgraded estimates of the company’s liability for the environmental harms originating from its mining activities.[5] Second, in the midst of a business rescue, MLI divested itself from Mintails by proceeding to spin-off its South African subsidiary.[6] MLI was then renamed Orminex Limited,[7] completing what looks like a manoeuvre to avoid liability for the environmental reparations owed by Mintails.[8] Eventually, Mintails filed for liquidation during the summer of 2018,[9] leaving the state of South Africa and the local communities around the mines with the financial burden to cover post-mining environmental rehabilitation costs, estimated at over R460 million (approx. 35 million US$).[10]

As multiple sources argue, this turn of events could have been foreseen as Mintails had recognised that its activities could lead to bankruptcy. The company nonetheless decided not to secure the funds it owed for environmental repairs.[11] MLI’s separation from its South African subsidiary Mintails can be interpreted as a sign that the company aimed to avoid liability for the environmental damages created by its subsidiary.

Despite the South African Parliament recommending prosecution and civil suits on company directors and shareholders in their personal capacities so that some of the liability owed could be recovered, the National Prosecuting Authority has been silent on the matter to date. Observers have pointed out that this is unlikely to change in South Africa’s mining-dependant environment.[12]

In an attempt to achieve environmental restoration, the Federation for a Sustainable Environment (FSE) filed a lawsuit to compel relevant government departments to hold companies and directors in the Mintails group to account for the environmental restoration costs. The first hearing is expected to take place on 12 August 2020.[13]

[1] South African National Assembly, “Report of the Portfolio Committee on Mineral Resources on its oversight visit North West and Gauteng on the 13-14 September 2018, dated 07 November 2018”, Announcements, Tablings and Committee Reports (Cape Town: Parliament of the Republic of South Africa, 2018), 22-52, https://dc.sourceafrica.net/documents/118553-Portfolio-Committee-on-Mineral-Resources-Final.html (accessed November 4, 2019).

[2] Gauteng Regional Head Office of the Department of Water and Sanitation of the Republic of South Africa, “Compliance Inspection for Mintails Mining SA Ltd: Mogale Gold,” December 18, 2014, https://dc.sourceafrica.net/documents/118409-DWS-Inspection-Report.html(accessed November 4, 2019); Mariette Lifferink and Lucien Limacher, “Presentation to the Government Task Team on Mintails’ Alleged Environmental Contraventions,” April 19, 2018, https://s3-eu-west-1.amazonaws.com/s3.sourceafrica.net/documents/118408/LRC-FSE-GTT-PRESENTATION-MINTAILS.pdf (accessed November 4, 2019).

[3] South African National Assembly.

[4] Lake, David, “Business Rescue Plan: Mintails Mining SA Proprietary Limited”, Mintails Gold SA Proprietary Limited and Mintails SA Randfontein Cluster Proprietary Limited (Johannesburg: Lake Strategic Solutions, 2016), 88., https://s3-eu-west-1.amazonaws.com/s3.sourceafrica.net/documents/118411/BUSINESS-RESCUE-PLAN-161213-MSARC-Amended.pdf (accessed November 4, 2019).

[5] South African National Assembly.

[6] It is not completely clear which party purchased Mintails S.A and how the spin-off was eventually realised. The report by the Business Rescue Person David Lake mentions a shift of interests from Paige Limited to Mvest Capital, while the news website Businesslive mentions Paige as the sole creditor after liquidation. See point 5 and 6 in:  David Lake, “Notice in terms of sections 132(3), 141(2)(a)(i), 144(3)(a), 145(1)(a) and 146(a) of the companies act, 2008″, Lake Strategic Solutions, JohannesburgAugust 1, 2018, p. 2, https://dc.sourceafrica.net/documents/118415-180801-Notice-to-Affected-Parties-Mintails.html (accessed November 4, 2019) and Mark Olalde, “Mintails directors may face criminal charges”, December 11, 2018, Businesslive, https://www.businesslive.co.za/bd/national/2018-12-11-mintails-directors-may-face-criminal-charges/ (accessed November 4, 2019).

[7] James Thackray, “Mintails Limited: Effectuation of Deed of Company Arrangement,” HQ Advisory, June 6, 2017. (accessed November 4, 2019); Orminex Limited. “Orminex: 31 March 2018 Quarterly Report,” March 31, 2018. https://orminex.com.au/re-listing-update-and-change-of-asx-code/. (accessed June 21, 2020).

[8] In its email reply responding to a request to review this case study, Orminex writes: “we purchased the listed entity [MLI] as a shell company and have never had any association with the South African subsidiary [Mintails South Africa] referred to in your recent email correspondence” (email dated 5 February 2020). The research team has not been able to verify this information, although Mintails’ 2017 annual report, p.4, makes clear that MLI was recapitalised, possibly by new shareholders: https://orminex.com.au/category/annual-reports/

[9] Lake, David, “Notice in terms of sections 132(3), 141(2)(a)(i), 144(3)(a), 145(1)(a) and 146(a) of the companies act, 2008”.

[10] Lake, David. “Notice in Terms of Sections 132(3), 141(2)(a)(i), 144(3)(a), 145(1)(a) and 146(a) of the Companies Act, 2008,” 1 August 2018. https://dc.sourceafrica.net/documents/118415-180801-Notice-to-Affected-Parties-Mintails.html (accessed 21 June 2020).

[11] Bega; Olalde and Matikinca.

[12] South African National Assembly; Mark Olalde and Andiswa Matikinca, “Directors targeted for Mintails mess,” Oxpeckers Investigative Environmental Journalism, December 2018, https://oxpeckers.org/2018/12/mintails-directors -targeted/ (accessed 4 November 2019); Sheree Bega, “Illegal miners hit Mintails mine on West Rand,” IOL News, 1 June 2019, https://www.iol.co.za/ saturday-star/watch-illegal-miners-hit-mintails-mine-on-west-rand-24637889 (accessed 4 November 2019).

[13]  The federation for a sustainable environment. “FSE’s Notice of Motion and Founding Affidavit: Minitails Group,” September 6, 2019. https://www.fse.org.za/index.php/mining/item/703-fse-s-notice-of-motion-and-founding-affidavit-mintails-group (accessed June 21, 2020).; Bega, Sheree. “A Battle to Hold Mining Company Accountable.” IOL News, February 26, 2020. https://www.iol.co.za/saturday-star/a-battle-to-hold-mining-company-accountable-19518065 (accessed June 21, 2020).

 

 

Please visit www.mindthegap.nog  

 ANNEXURE G ( FINAL RQOs - UPPER VAAL) - attached for download.

ANNEXURE B (NATIONAL WATER RESOURCE STRATEGY)
ANNEXURE C (IVRS RECONCILIATION STRATEGY)
& D (NEMA FINANCIAL REGULATIONS) - attached for download.

APPENDIX A - NATIONAL WATER AND SANITATION MASTER PLAN - attached for download.

The document with FSE's comments are attached for download.

FSE IN SA MINING

The FSE contributed to the article titled “Caught between a rock and hard place”...

SA NEWS

FSE - DONATION OF TREES AND TREE PLANTING IN SIMUNYE, WEST RAND IN ASSOCIATION WITH SOUTH DEEP MINE

The FSE, in association with Gold Fields’ South Deep Mine, donated 40 white Karee Trees (Searsia penduline) during Arbor Week to the mining affected community of Simunye in the West Rand and participated in the tree planting ceremony with the community of Simunye, the local Municipality and officials from South Deep Mine.  The FSE also delivered a presentation during the ceremony.

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

Article also available for download as an attachment.

Radon Alert - Carte Blanche

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

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

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

WATER

POLLUTION OF THE VAAL RIVER INTERVENTION AS PRESENTED at Rietspruit Forum - Aug 2020

The Intervention document is attached for download.

Development of the National Eutrophication Strategy and Supporting Documents

Attached documents:1. DWS Eutrophication SA & GA PSC 1 BID2. PSC 1 Meeting A...

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

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