Harmony Gold of South Africa Ordered to Pay for Pollution

Harmony Gold Mining Co. (HAR), Africa’s third-largest producer of the metal, must pay to clean up water pollution near mines west of Johannesburg even after selling the land five years ago, South Africa’s Court of Appeal ruled.

Harmony, which owned the affected area in the West Rand from 2003 to 2008, must contribute to rehabilitation costs with AngloGold Ashanti Ltd. and Simmer & Jack Mines Ltd., the court ruled. Harmony argued that its responsibilities ended when it sold the land to Pamodzi Gold Orkney (Pty) Ltd. in February 2008. Pamodzi has since been liquidated.

Extensive gold extraction in the West Rand by Harmony, AngloGold and Simmer formed a series of interlinking tunnels and cavities that have flooded since mining ceased. The rock contains iron sulfide, which oxidizes, creates sulfuric acid and dissolves other toxic metals when it comes into contact with air and water. This acidic liquid can pollute the water supply.

Harmony’s argument “would result in the absurdity that a polluter could walk away from pollution caused by it with impunity, irrespective of the principle that it must pay the costs of preventing, controlling or minimizing and remedying the pollution,” the court said. The appeal had “no merit.”

“We’re working through the results and considering our legal options,” Henrika Basterfield, a spokeswoman for Randfontein-based Harmony, said today.

The company had appealed against a 2005 directive issued by the regional director of the Department of Water Affairs, which stated that Harmony should share rehabilitation costs with AngloGold, Simmer and Stilfontein Gold Mining Co., which has since gone into liquidation.

To contact the reporter on this story: Kevin Crowley in Johannesburg at kcrowley1@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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