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Mpumalanga signals new clampdown

6 November 2010 at 8:43 pm

Business Report, 5 November 2010

The Mpumalanga government was on the verge of issuing three new pre-directives advising mines that flouted environmental laws to halt unauthorised operations, an official said yesterday.

This appears to signal a clampdown by provincial authorities on the mining industry for environmental offences, and comes amid concerns over a looming acid mine drainage problem in Mpumalanga.

It follows the shutdown of mining junior Coal of Africa’s construction activities at the Vele colliery near the Mapungubwe World Heritage Site in Limpopo in August, and the issuing of a pre-directive last Thursday advising Coal of Africa to cease unauthorised operations at its Mooiplaats colliery in Ermelo, Mpumalanga.

Coal of Africa’s share price was pummelled on Wednesday after news of the pre-directive reached the market, prompting chief executive John Wallington to issue a statement in which he asserted the colliery’s right to continue operating until a compliance notice was issued.

Pre-directives precede the issue of compliance notices. In the Mooiplaats pre-directive, the mine was advised to stop operations within 24 hours.

Wallington complained: “If the principles of applying this ruling are consistently applied across the mining industry, the company is of the opinion that the majority of mines in this country would be forced to close.”

Pamela Ntuli, the deputy director of enforcement at the Mpumalanga Department of Economic Development, Environment and Tourism, said yesterday the department was on the verge of issuing pre-directives for environmental transgressions to the Golfview colliery in Ermelo, the Nkomati nickel mine in Machadodorp and the Vuna colliery in Middelburg.

Ntuli said the department was still considering the case of Mafube colliery near Middelburg, a joint venture between Anglo Coal and Eyesizwe.

Nkomati is a joint venture between African Rainbow Mineral Platinum and Norilsk Nickel Africa, while Golfview is owned by Anker Coal and Mineral Holdings, whose owner was named by a company employee yesterday as an unidentified Dutch investor.

Vuna gained notoriety after its parent, Vuna Mining Enterprise, was taken to court by Xstrata over contested mineral rights. Xstrata alleged that the rights had been awarded when Lindiwe Hendricks, the wife of Vuna director Andrew Hendricks, was minister of minerals and energy.

Vuna hit the news again last year when farmers in Middelburg demanded the immediate closure of the Vuna colliery on the Klein Olifants River, with one neighbour complaining that it had caused him to lose fertile agricultural land.

The Federation for a Sustainable Environment threatened to sue the government for violating the Water Act.

Wallington said that closure of the Mooiplaats colliery was not warranted as the company was “in the process” of complying with the requirements of the National Environmental Management Act (Nema). Coal of Africa had “no choice” but to explore all legal and constitutional options, he said.

Ntuli reiterated that a compliance notice would be issued if Mooiplaats continued operating but, following a conversation with Coal of Africa yesterday, she would hold back on issuing it until November 12, effectively giving the company 14 days from the day of notice to cease operations.

Wallington said Coal of Africa had not originally applied for Nema authorisation because of a “general understanding” in the industry that mining applications involved a full environmental impact assessment (EIA), thus negating the need for a separate EIA.

He said officials that the company had been dealing with regarding environmental compliance had expressed “surprise and uncertainty” about the pre-directive.

The national Department of Environmental Affairs did not respond to a request for comment yesterday. New Water and Environmental Affairs Minister Edna Molewa was appointed in Sunday’s cabinet reshuffle.

Mpumalanga accounts for around 80 percent of South Africa’s coal production and exports make up about 30 percent of that. Coal mining supports power generation in the province, where about 70 percent of South Africa’s electricity is generated.

Coal of Africa shares closed 3.1 percent up at R8.25 on the JSE yesterday.