FINANCIAL PROVISIONING FOR REHABILITATION AND MINE CLOSURE: A study of South African platinum and coal mining companies

Posted in: Reports on May 1, 2018

Intellidex undertook the research underpinning the The Centre for Environmental Rights’ Full Disclosure report. 

The Council for Geoscience (CGS), a scientific research body contracted by the Department of Mineral Resources (DMR) to manage the ownerless and derelict mines database, estimates that there are at least 6,000 abandoned mines in SA. The ongoing environmental impact of these mines is a problem for the state and therefore for the taxpayer. The DMR rehabilitated 50 mines during the 2015/16 financial year. This highlights the need for improved environmental maintenance and rehabilitation in the mining sector during years of operation and beyond. This report considers the amounts being set aside by operating South African mining companies to pay for environmental rehabilitation when mines cease to operate.

South African laws require mining companies to set aside money for the management, remediation and rehabilitation of the environmental impacts of mining operations. Before commencing with mining, companies are required to draw up an environmental management plan which details how environmental impacts will be dealt with, and they are required to provide for the costs required to implement the plan. This plan and any subsequent revisions should be verified and approved by the DMR.

Intellidex studied 11 JSE-listed companies to determine how much they are providing. The three coal mining houses and eight platinum companies were selected according to the criteria explained in the methodology section of the report. Read more about the key findings  in the full report.

Download the full Intelidex report here.

RELATED ARTICLES

STUART THEOBALD: Be wary of the government letting the debt-relief genie out of the bottle

April 16, 2019

South Africans’ over-indebtedness has long been a political risk for the financial system. Almost 10-million have impaired credit records and millions more struggle to meet repayments. That is a... read more

Impact investing can support development objectives in SA, but it won’t be plain sailing

April 15, 2019

Why invest only for financial gain, when your investment can also have positive social consequences? The idea that our investments can do good in the world, rather than just serve our narrow financial... read more

PETER ATTARD MONTALTO: Why Reserve Bank policy is still a cut above alternative suggestions

April 8, 2019

In some ways I preferred the period of 2005-2008, when Cosatu would march to the Reserve Bank and make demands to the governor. They were simpler times, with simpler demands. read more