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Unit 12: Special Features of Audit
Self Assessment Notes
Fill in the blanks:
15. The aims of the society should not be inconsistent with the principles of social justice, and
its bylaws not contrary to the provisions of the ...................................
16. With sanction of ............................., Co-operative societies may also borrow from credit
agencies subject to the limits and conditions prescribed.
17. While the main object of a ................. is to earn profit, the object of a ................. is to render
service to its members.
18. Proper classification of assets and provisioning of cooperative institutions are based on
....................................
Case Study AngloGold Ashanti - Mine Closure Stretches
Environmental Legislation
ngloGold Ashanti is an active participant in the development of a water
management strategy in the Klerksdorp, Orkney, Stilfontein and Hartebeesfontein
A (KOSH) area, after it found itself, along with other mining companies, in the
middle of uncharted legal territory.
This followed a dispute over responsibility for pumping of underground water after
DRDGOLD placed its North West Operations (NWO), comprising Hartebeesfontein and
Buffelsfontein mines, into provisional liquidation on 22 March 2005. Prior to this,
dewatering of mines in the area was conducted by each mining company at their own
mine shafts – DRDGOLD Limited, Harmony Gold Mining Company and AngloGold
Ashanti – and Stilfontein Gold Mining Company, which, though closed, contracted the
dewatering at its Margaret shaft to Hartebeesfontein.
Pumping is necessary to prevent the flow of underground water from mines at a higher
location within the mining area to lower-lying mines and to keep the mines at the higher
location dry for their own operating purposes. The designs of higher lying and shallower
mines, like Hartebeesfontein, Buffelsfontein and Margaret, took account of the challenges
posed by large volumes of water, unlike the deeper shafts owned by AngloGold Ashanti
and Harmony, which do not encounter such volumes. Indeed Margaret shaft pumps a total
of 37 mega litres a day (Ml/d), the equivalent of 740 swimming pools, while five other
shafts in the area pump much lesser amounts each – 20.50 Ml/d in total. Once DRDGOLD
abrogated its responsibilities to continue pumping natural underground water, the ensuing
debate highlighted a crucial area, namely, on whose shoulders the pumping responsibility
should lie when one mine closes down before another. The South African statutory law, in
the opinion of AngloGold Ashanti, is clear in this regard, the mine in whose area the
underground water occurs has the obligation to manage such water.
When DRDGOLD left responsibility for pumping with its liquidators, mines operated by
AngloGold Ashanti and Harmony, lying as they do on the down dip of DRDGOLD’s
North West Operations, were at risk of flooding with a number of possible impacts:
cessation of operations, loss of a valuable resource, and resultant job losses affecting the
social and economic fabric of the area.
Contd....
LOVELY PROFESSIONAL UNIVERSITY 233
