South African Mines to Pay Levy for $760 Million Water Clean-Up

  • Mines to pay 67% of cost through environmental levy: minister
  • Three plants set up throughout Gauteng as emergency measures

South Africa’s government said operating mines should pay two-thirds of the cost of cleaning up toxic water pollution caused by more than 100 years of mining in Gauteng, the country’s richest province that includes Johannesburg.

A long-term plan to treat so-called acid mine drainage will cost as much as 12 billion rand ($760 million) and be implemented by February 2020, Water Affairs and Sanitation Minister Nomvula Mokonyane said in a speech Wednesday in Germiston, east of Johannesburg. Water users, mostly industrial companies, will pay for a third of this while the rest will be funded by the National Treasury, which aims to reclaim the money from mines through an environmental levy, she said.

After intensive mining since the 1880s, Johannesburg and its surrounding areas are littered with enormous underground mined-out caverns that have become flooded. Water and oxygen combine with toxic metals such as uranium and iron, by-products of excavating for gold, to create a highly acidic and sulfuric liquid that flows into the rivers supplying water to the region.

“This planned intervention will turn the AMD problem into a long-term sustainable solution by producing fully treated water that will significantly increase water supply to the Vaal River system,” Mokonyane said.

Not Retrospective

Johannesburg is at the center of the Witwatersrand Basin, a geological deposit billions of years old that’s produced a third of all the world’s gold. While most of the problem was caused by loose environmental regulations before the 1990s, the government won’t seek to recover money from mining companies that are no longer operating.

“Nothing is going to be applied retrospectively,” Mokonyane said. “We’re not on a witch-hunt.”

The initial cost to the Treasury will be about 600 million rand a year, but the government plans to recover this cost from the mining industry. That approach is opposed by the Chamber of Mines, which represents mining companies, including AngloGold Ashanti Ltd., the world’s third-biggest producer of the metal, and Sibanye Gold Ltd., the largest producer of bullion from mines in the South Africa.

Opposing Levies

“We are not in favor of imposing levies,” said Roger Baxter, the chamber’s chief executive officer. “Levies are not the solution.”

Treating the acid mine water will defer the need to extend the Lesotho Highlands Water Project, which supplies the city and its surrounds, beyond its second phase for at least 30 years, Mokonyane said.

Trans-Caledon Tunnel Authority SOC Ltd., which builds dams and tunnels to supply water to South African factories and mines, is managing both the three emergency and long-term projects to process the toxic water. Permanent plants to treat the water will start operating in February 2020, Mokonyane said.

The government is expanding existing water-treatment facilities in Krugersdorp, west of Johannesburg. It is also building a new operation in Springs in the eastern part of the Witwatersrand Basin, with the plant set to be among the world’s largest, processing 100 megaliters daily. They will be supplemented by an existing facility in Germiston.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE