Financial Provisions for Rehabilitation and Closure in South African Mining



Posted on 15 August 2012
The cover of the Financial Provisions for Rehabilitation and Closure in South African Mining report
© WWF-SA
In response to the environmental risks posed by abandoned mines, mining companies are legally required to set aside money to clean-up mining operations before they are officially closed. Research published in a new WWF report indicates, however, that mining companies are not fulfilling this obligation adequately. In 2009 the Auditor General estimated the bill for cleaning up existing abandoned mines to top R30 billion. This figure will continue to grow unless mining companies and governments act quickly to close loopholes in the process to fund clean mine closure.

The incidence of acid mine drainage (AMD) and the high number of derelict and ownerless (D&O) mines, as well as dangerous sinkholes and collapsing entry points, particularly in the Witwatersrand gold fields, have effectively brought the consequences of inadequate environmental rehabilitation in the mining sector into sharp focus.

The newly released Financial Provisions for Rehabilitation and Closure in South African Mining: Discussion Document on Challenges and Recommended Improvements report, commissioned by WWF-SA, recognises that Mining in South Africa is a key element of economic development. However, ongoing concerns regarding environmental degradation in mining areas, the high number of ownerless and abandoned mines, and the incidence of AMD have highlighted the need for improved environmental maintenance and rehabilitation in the mining sector. In addition to this, there is growing public concern that those who profit from mining are not footing the bill for environmental damage caused by their operations.

The report was written by a team of experts from the University of Cape Town’s School of Economics and Department of Accounting, Independent Economic Researchers and other independent consultants.