Acid mine drainage debate in August

An Acid Mine Drainage debate on solutions and funding on 29 August will explore how state protection of mining had externalised business cost.

Debaters for and against a motion of public funding are Mariette Liefferink, CEO of Federation for a Sustainable Environment; Prof Anthony Turton, Consultant and water scientist; Ken Bouch, divisional head at Fraser Alexander Water Treatment; and Eddie Milne, chief financial officer at Mintails SA.

The event, themed on governance failure and the environmental and economic toll of the decline of mining, is on Thursday 29 August 2013 at 15:30 at Axiz in Midrand, Johannesburg, corner New Road and Sixth Road, R80 per person, payable at the door, including a cocktail party.

Various acid mine drainage (AMD) treatment technologies are being presented to government, “some with little understanding of the complex roots of the problem, and with the taxpayer being asked to foot the bill”, writes EE Publishers editor Chris Yelland.

He called a debate on technologies and business models that underpin the proposed solutions. About three years ago, he called a debate on fracking (reported on that had a surprising outcome; most of the public, including a large media contingent, voted in favour or allowing fracking tests to continue.

The AMD solutions debate will be chaired by an environmental expert, who will table the motion; “Mining benefited the South African economy, so it is reasonable to expect that taxpayers should pay for AMD remediation and rehabilitation through the fiscus, as a cost of development”.

Two acknowledged experts will argue for the motion, and two against. Each presenter will be given 15 minutes to discuss technology solutions and funding models, and argue the case, after which the chair will entertain discussion, argument and clarifications from the floor and between presenters.

Each presenter will then be given five minutes to wrap up. A vote with be taken on the motion before and after the debate, to determine the final mood of the audience, and the impact of the presentations and argument.

The names and resumes of the chairperson and presenters will be announced a week before the debate.

How mining came to take a creeping environmental toll

Mining revenues were taxed by the state, and this funded virtually all the major infrastructure in the country. During the early industrialisation, major state-owned or state-assisted enterprises such as Iscor, Sasol and Eskom emerged, which were deemed to be of national strategic significance. Coal mining became increasingly important for these enterprises, and South Africa also became a major exporter of coal.

The strategic importance of mining was elevated in the latter years of the apartheid era, when South Africa was increasingly isolated as a pariah state.

The state’s response was to protect mining as a matter of survival, which created a specific business model centered on maximising profits by externalising costs as far as possible. This maximised revenue streams to the state in the face of comprehensive external economic sanctions.

This business model allowed the costs associated with environmental rehabilitation to be taken off balance sheet and out of the regulatory domain. This enabled an embattled state to survive for decades, but failed to create the governance structures needed to plan for the transition to a post-mining economy.

Meanwhile, a major mining house had delisted from the JSE and re-bundled its assets. Embattled gold mining companies fell like dominoes as the cost of production escalated, which resulted in the shutting down of pumps that dewatered the three major mining basins. The Western Basin became the first to decant AMD to surface in 2002.

In the coal-mining areas of Mpumalanga, energy epicentre of the economy, the agricultural potential of what used to be one of the richest food production areas of the country was lost to AMD.

Eskom ran out of steam in 2008 when the externalisation of costs model manifested as an inability to recapitalise the electricity industry. South Africa’s future economic development is constrained by the expedient past business model.

Failure of governance resulted in three elements emerging as present-day constraints to economic development:

* Insufficient capital was set aside to fund post-closure rehabilitation.
* Insufficient incentives were given for the development of technology needed for the post-closure rehabilitation of mine-impacted landscapes.
* Insufficient attention was given to policy development capable of guiding a transition from a mining to an as yet ill-defined beneficiation-type economy.

* Visit EE Publishers website to register to atte nd the debate.

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