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Advanced Auditing

Notes
AngloGold Ashanti’s immediate response, on 13 April 2005, was to launch an urgent
interim interdict to request the court to order DRDGOLD to continue to dewater at its
operations, in terms of legislation contained in the National Water Act, the National
Environmental Act, the Mine Health and Safety Act and the Mineral and Petroleum
Resources Development Act, which says that each mining company is responsible for its
own environmental impacts and safety and that it may not pass pollution and safety
problems on to another mining company – in other words “the polluter pays” principle.
Mining companies, in any event, are compelled to make financial provision and fulfil
certain environmental obligations before obtaining a closure certificate from the
Department of Minerals and Energy (DME). AngloGold Ashanti also asked the court to
direct the state to fulfil its statutory duties.
As a result of the launching of the urgent interdict, the Department of Water and Forestry
Affairs (DWAF), in the meantime, issued a directive to mining companies to formulate a
proposal on how to handle the KOSH water issue. AngloGold Ashanti submitted a document
suggesting a way forward. The proposal suggests that over the next 18 years (covering the
life of mines in the area), water should continue to be pumped to surface at Stilfontein
Margaret shaft before being piped to the local water service provider, Midvale Water
Company or other water services provider where it is to be blended with Vaal River
water, treated and used for domestic, industrial and mining purposes.
AngloGold Ashanti has also suggested that a water company (with the mining companies
and government as members), similar to Midvale, be formed to manage the current crisis
now and into the future. This should create a revenue stream to pay for pumping costs
over the next 18 years and will make more widespread use of the water being pumped at
Margaret shaft, now being discharged to the surface environmental and water resources.
On the question of sustainability, as raised by government, the proposal further advises
continued pumping for a 10-year period following mine closure, until voids fill up. It is
also envisaged that, since the quality of water may not be accurately established at this
time, a pre-treatment plant be erected at Margaret shaft before water is transferred to
Midvale Water Company. With regard to water pollution, a monitoring measure is
currently under investigation by DWAF, which is considering installing a Water Discharge
Charge system, whereby companies will be charged for volumes and contaminants
discharged into the natural watercourse.
At a two-day workshop held in October 2005, all mining companies and stakeholders
agreed on the establishment of a water company, which will ultimately benefit the
community, mining companies and government. Foreseeable challenges, besides raising
the R60 million needed to set up the company, are how DWAF and the DME will legally
appropriate Margaret shaft from Stilfontein in view of the fact that the company has no
directors – they resigned en masse earlier in the year when they faced contempt of court
proceedings for failing to comply with the DWAF directives; and the speed with which
DWAF will be able to furnish a water license permit for the new company.
While AngloGold Ashanti is confident that the new water company will get off the ground
in the foreseeable future, it would like to see government intervention in certain areas
before a crisis on the scale of the KOSH area presents itself. Chief of these is ensuring that
closure strategies are in place long before all mining operations cease, and that these
strategies adopt a holistic view of the needs of affected areas.

Contd....

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