Full Disclosure 2016

African Rainbow Minerals Limited's disclosure of environmental non-compliances in annual reports

2016 update

2015 company reports

ARM’s 2015 Sustainability Report states the following with respect to environmental compliance:

During January 2014, Modikwa received a pre-directive in terms of Section 53 of the National Water Act relating to the encroachment of waste rock on the river. A rehabilitation plan approved by the Department of Water and Sanitation (DWS), was implemented and the DWS has subsequently stated that no directive will be issued.

At the end of 2014, Two Rivers Platinum received a notification of intent to issue a pre-directive in terms of Section 53 of the National Water Act from the DWS for unlawful water use pertaining to the construction of a lapa with associated ablution facilities on the wall of the Inyoni Dam. A comprehensive geohydrological investigation and risk assessment report was presented to the DWS in April 2015 and the matter is still under consideration.

In the case of the Khumani Housing Development Company Proprietary Limited, a subsidiary of Assmang Proprietary Limited, its appeal against the administrative fine in terms of section 24G of the National Environmental Management Act, which was lodged in the 2014 financial year, remains unresolved.¹

It is also stated in the 2015 Sustainability Report that:

Contaminated land surveys were completed at Machadodorp Works and Cato Ridge Works in terms of the National Environmental Management: Waste Act (NEMWA). The outcomes of these studies have been included in the assessment of closure and rehabilitation costs and reflect in their financial provision towards closure and rehabilitation.

The six potential non-compliance issues identified in the Green Scorpions compliance inspection and investigation at Machadodorp Works in F2014 have been resolved to the satisfaction of the relevant authorities.²

With respect to environmental incidents, the 2015 Sustainability Report states as follows:

Incidents where process/polluted water (below the quality specified for discharge as specified in the Water Use Licences of the operations), occurred at Dwarsrivier Mine (approximately 1 642 m3) and Machadodorp Works (10 000 m3) during the year. The discharge at Machadodorp was an emergency release of storm water contained in the storm water dam. The area received heavy rainfall during January 2015 and this filled the storm water dam to capacity. In order to prevent the dam from cracking and to avoid any possible safety risk to the nearby community, a controlled release was undertaken. The discharge at Dwarsrivier Mine was caused by a pipe burst. These incidents, including details such as the volume as well as the quality of the discharged water, were reported to the Department of Water Affairs as required by the conditions of the operations’ Water Use Licences.³

The report states further:

There were no significant hydrocarbon spills during the year. Minor hydrocarbon spills were reported by Dwarsrivier, Modikwa and Two Rivers mines. Rehabilitation of affected areas was undertaken and contaminated soil was disposed at licenced hazardous waste landfill sites.⁴

2016 company reports

With respect to environmental compliance, ARM’s 2016 Sustainability Report repeats the statements made in the 2015 Sustainability Report:

At the end of 2014, Two Rivers Platinum received a notification of intent to issue a pre-directive in terms of Section 53 of the National Water Act from the DWS for unlawful water use pertaining to the construction of a lapa with associated ablution facilities on the wall of the Inyoni Dam. A comprehensive geohydrological investigation and risk assessment report was presented to the DWS in April 2015 and the matter is still under consideration.

In the case of the Khumani Housing Development Company Proprietary Limited, a subsidiary of Assmang Proprietary Limited, its appeal against the administrative fine in terms of section 24G of the National Environmental Management Act, which was lodged in the 2014 financial year, remains unresolved.⁵

With respect to water related incidents, the 2016 Sustainability Report states as follows:

Incidents where process/polluted water (below the quality specified for discharge as specified in the Water Use Licences of the operations), occurred at two operations during F2016.

There was a discharge of 1 750 m³ at Dwarsrivier Mine as a result of excessive water in the storm water system that necessitated emergency release. The water was discharged into the veld with potential impact on the Klein Dwarsrivier. Water samples were taken and a full investigation conducted and reported to the DWS.

Seventy thousand cubic metres of process water were discharged into the veld from emergency releases at Machadodorp Works with a potential impact on the Leeuwspruit. With the plant being on care and maintenance, water consumption at the operation has been significantly reduced, which resulted in a rapid build-up of water into the storm water dam during periods of heavy rainfall. The incidents were reported to the Inkomati-Usuthu Catchment Management Agency (IUCMA), the DWS and the Department of Environmental Affairs (DEA), which followed up with a site investigation.⁶

In addition, ARM’s 2016 Integrated Annual Report states as follows:

There were no significant hydrocarbon spills during the year. Minor hydrocarbon spills were reported by Black Rock (52 litres of fuel), Dwarsrivier (120 litres of oil) and Two Rivers (73 litres of oil and 114 litres of fuel). Affected areas were rehabilitated and the contaminated soil was disposed at licenced hazardous waste landfill sites.⁷

ARM’s 2016 Sustainability Report also repeats the following statement from its 2015 report in relation to contaminated land surveys:

Contaminated land surveys were completed for Machadodorp and Cato Ridge Works in F2015 and the other operations will conduct surveys as appropriate. The outcomes from the completed studies have been included in the assessment of closure and rehabilitation costs and reflect in the financial provision towards closure and rehabilitation.⁸

Full Disclosure 2015

Variations of the following statement are often made in ARM’s Annual Reports:-

Internal and external audits are regularly conducted at all operations and any instances of non-compliance with regulatory requirements are reported to management for corrective action. The Company did not receive any fines nor has it been prosecuted for any anti-competitive practices or non-compliance with any governance or legislative obligations.⁹

2008 company reports

In the 2008 Annual Report it was stated that:-

The most significant matter of non-compliance related to the Cato Ridge smelter. In August 2007, Assmang responded to a report from the Department of Environment and Tourism (DEAT) following an inspection undertaken in February 2007. Further interaction ensued between the parties in respect of air pollution and emissions, non-adherence to conditions of the dust disposal facility permit, the absence of a monitoring committee, and perceived inadequacies in terms of monitoring and general pollution issues.

Assmang was given 21 days in which to prepare detailed action plans to address the listed non-conformances and other issues raised by DEAT, and this was provided timeously on 16 November 2007. In compliance with the action plans developed, waste management (for dust and slag) and waste management facilities, water management and licensing, as well as air quality monitoring and management, have received significant attention. A number of specialists were engaged to prepare the appropriate project scopes, plans and costings to address environmental management at Cato Ridge and ensure compliance in the future. Implementation of the plan will take two to three years. Bi-monthly meetings are held between the Works, the local municipality and DEAT to track a report on progress. The project is on schedule.¹⁰

2009 company reports

No non-compliance information was included in the company’s reports for 2009.

2010 company reports

It was reported in the 2010 Annual Report that:-

The most recent external audit, conducted in F2009, identified certain areas requiring attention, which were addressed during F2010. In the first instance, certain rectification applications were submitted to the authorities in terms of Section 24G of NEMA. This resulted in Nkomati Mine paying an administrative penalty of R351 000 (the mine having an approved EMPR but not having obtained environmental authorisations in terms of NEMA for certain specified activities), and Black Rock Manganese Mine paying an administrative penalty of R161 000 (for not having an environmental authorisation in terms of NEMA for the start-up for a housing development).¹¹

2011 company reports

In ARM’s 2011 Sustainability Report it was stated that:-

The most recent liability audits were completed during the year under review. The reports on these audits are in the process of being finalised and [sic] as is confirmation of the factual correctness of the findings, after which the audit reports (both operational and corporate reports) will be distributed. Thereafter, appropriate action plans and non-conformances will be included in individual operations’ non-conformance management systems and tracked and reported on quarterly.¹²

2012 company reports

In ARM’s 2012 Sustainability Report it was stated that:-

During the year under review, Modikwa Mine received a notice of intent to deliver a directive in terms of Section 31 of the National Environmental Management Act (NEMA). The notice alleged illegal construction without an approved environmental impact assessment and related to construction of a new sewage treatment plant. Modikwa mine submitted application under Section 24G of NEMA, made representations and explained the actions as a remedy to the current unstable and old facility and is in discussions with authorities to resolve the issue. The directive has not been issued and all work is on hold until an approved EIA has been received.¹³

Notably, in ARM’s 2012 Annual Report, it was also stated that:-

During F2012 the Company did not receive any administrative penalties nor was it fined nor has it been prosecuted for any anticompetitive practices or non-compliance with any legislative or regulatory obligations.¹⁴

2013 company reports

In ARM’s 2013 Annual Report it was reported that:-

During the year under review, an administrative fine of R500 000 in terms of Section 24G of the National Environmental Management Act was paid by the Black Rock Mine of Assmang Limited and an administrative fine of R315 000 was paid by Modikwa in respect of the Montrose sewage facility. In the case of the Khumani Housing Company Proprietary Limited, a subsidiary of Assmang Limited, an administrative fine of R460 000 was imposed, but this has been taken on appeal. The appeal remained unresolved as at year end.

The Company did not receive any other administrative penalties nor has it been prosecuted for any anti-competitive practices or non-compliance with any governance or legislative obligations.¹⁵

In the 2013 Sustainability Report it was also stated that:-

Black Rock Mine is continuing with the process of amending its initial Environmental Management Programme Report (EMPR) to reflect the current realities of the operation.¹⁶

2014 company reports

In the 2014 Annual Report further administrative fines were reported:

During the year under review, Modikwa paid an administrative fine of R315 000 in terms of the National Environmental Management Act in respect of the Montrose sewage facility. In the case of the Khumani Housing Company Proprietary Limited, a subsidiary of Assmang Proprietary Limited, an administrative fine of R460 000 was imposed, but this has been taken on appeal. The appeal remained unresolved as at 30 June 2014. Dwarsrivier Mine paid an administrative fine of R1 000 000 for rectification processes in terms of section 24G of NEMA, which it had lodged in 2008, and Two Rivers Platinum also paid a consolidated fine of R1 000 000 for rectification in terms of section 24G of NEMA.¹⁷

(Note: Assmang’s Annual Reports were not included in this assessment of disclosure.)¹⁸

ARM has also published ‘Sustainability Data Tables’ for 2014. In this document, information is provided on the amount of land ‘disturbed’ by specific operations (it is unclear whether the figures are total amounts or solely for the reporting year), whether or not the disturbed land has been rehabilitated and whether the land is located in close proximity to an area of high biodiversity or a protected area:

• at Modikwa, 555 hectares have been disturbed and are not yet rehabilitated,¹⁹
• at Two Rivers, 190 hectares have been disturbed in a high biodiversity or protected area,²⁰
• at Nkomati, 377 hectares have been disturbed and are not yet rehabilitated,²¹
• at Beeshoek, 1103 hectares have been disturbed and are not yet rehabilitated,²²
• at Khumani 3080 hectares have been disturbed and are not yet rehabilitated,²³
• at Black Rock, 1464 hectares have been disturbed and are not yet rehabilitated,²⁴
• at Dwarsrivier, 181 hectares within a high biodiversity or protected area have been disturbed and are not yet rehabilitated,²⁵
• at Machadodorp 141 hectares have been disturbed within an area of high biodiversity or a protected area,²⁶ and;
• at Cato Ridge, 150 hectares have been disturbed and are not yet rehabilitated, including land located in an area of high biodiversity or a protected area.²⁷