Full Disclosure 2016

Coal of Africa Limited's disclosure of environmental non-compliances in annual reports

2010 company reports

CoAL’s 2010 Integrated Report contained the following statements regarding the Vele Colliery in Limpopo, in respect of which a mining right was granted to CoAL in February 2010:

The Company completed extensive and thorough economic, social and environmental studies for the Vele Colliery’s NOMR [new order mining right] application. These consisted of a mine works program (“MWP”) and social and labour plan (“SLP”) which were submitted to the DMR in November 2008. These were followed by the environmental impact assessment (“EIA”) scoping report in December 2008. Extensive consultation was conducted with interested and affected parties (“IAP’s”), whilst the EIA was carried out by a group of specialist independent consultants, each covering their respective areas of expertise as required by the scoping report. The process culminated in a widely publicised open day in April 2009 attended by more than 170 persons representing various interest groups and IAP’s. The comments received during this session, as well as from the IAP consultation process, were taken into account in preparation of the Environmental Management Plan (“EMP”), which was then submitted to the DMR in mid-May 2009 (nine months before the NOMR was granted by the DMR) with the EIA documents, together comprising more than 2,200 pages. The comprehensive EMP and EIA documents submitted to the DMR committed the Company to the highest level of environmental and social performance. During the year, dust monitors were erected on the Vele Colliery area, as well as on neighbouring farms, and water monitoring boreholes have been drilled for the IWUL plan for the project, which is being compiled by independent consulting engineers.¹

The report goes on to state as follows with respect to CoAL’s response to a July 2010 news article² which published statements by the South African Minister of Water and Environmental Affairs to the effect that she was concerned that CoAL was carrying out illegal activities and that her Department may “halt development at the colliery if the company has flouted environmental laws”:

On 2 August 2010, the Company stated that all activities undertaken at the Vele Colliery had been carried out in accordance with the NOMR granted for the Vele Colliery and the Company had not undertaken any activities for which authorisation had not been given. The NOMR, which was executed on 19 March 2010, together with the approved Environmental Management Plan in respect of the Vele Colliery, as well as the rights afforded the Company under the South African Mineral and Petroleum Resources Development Act (“MPRDA”) permitted it to start development activities on site. The Company acknowledged that on 7 April 2010, the South African Department of Environmental Affairs (“DEA”) refused CoAL authorisation to build an access road on one of the CoAL owned Vele farms, Erfrust 123 MS, adjoining the Vele Colliery mining right area and to construct above ground bulk fuel storage facilities. CoAL stated that it had appealed these decisions and clarified that it has not and will not start construction of this access road on Erfrust or storage facilities until the required approvals have been received. Although the proposed access road does not prevent the Vele Colliery from operating, it would considerably shorten the distance from the mine site to the main road. CoAL sought these additional authorisations in accordance with the requirements of the South African National Environmental Management Act, Act No. 107 of 1998 (“NEMA”). The requirement to approve these additional activities are listed under NEMA, but not directly related to the authorised mining operations. The Company has subsequently been served with two pre-compliance notices (“Pre-Compliance Notice”) from the DEA alleging various matters, including that the Vele Colliery has proceeded with the construction of the access road and storage facilities. As stated above, the Company has not undertaken any activities for which authority has not been granted.³

The report goes on to describe engagements between CoAL and government departments with regard to the Vele Colliery:

On 1 September 2010 the Company disclosed that it had held several constructive meetings with the DEA, some of which were attended by the Director General of the DEA. CoAL has adhered to the Pre-Compliance Notice issued by the DEA and is in the process of submitting rectification applications in terms of section 24G of NEMA to continue with the activities. The Company has also applied to the Minister for the suspension of the Pre-Compliance Notice during this process.⁴

CoAL states as follows with respect to its application for a water use licence in respect of the Vele Colliery:

The Company still awaits approval of its application for an IWUL for the Vele Colliery which was submitted to the South African Department of Water Affairs (“DWAF”) on 10 November 2009. CoAL is liaising with the relevant authorities on an ongoing basis to enable the granting of the IWUL, which is required before the Company can commence any mining or processing activities at the Vele Colliery. However the IWUL is not required for the development activities which have been carried out to date. The Company has also applied to DWAF regarding the directive requesting the cessation of related specific activities pending the issue of the IWUL. As required in the directive, an Independent Environmental Assessment Practitioner has been appointed to assess the current and proposed activities in conjunction with the IWUL process with respect to the impact on the risks to the water source.⁵

The report goes on to state the following with respect to Vele’s compliance with environmental laws:

CoAL has made significant progress in satisfying the technical requirements raised by the DEA and the Company is confident that with continued liaison between itself, the DEA and DWAF, the issues will be satisfactorily resolved. The timelines required to complete the processes have resulted in the Company having no choice but to reduce the workforce at the Vele Colliery by 596 people. The Company expects to re-commence development activities in late 2010.⁶

CoAL’s 2010 Integrated Report states as follows with respect to opposition to Vele by environmental groups, including court action launched:

Some environmental groups have stated their opposition to the Vele Colliery due to the potentially sensitive nature of the area and the proximity of the Colliery to the Mapungubwe World Heritage Site and National Park the centre of which, Mapungubwe Hill, lies at least 20km away from Vele. On 5 August 2010, CoAL advised that court papers had been served in a South African High Court interdict application on its wholly owned subsidiary, Limpopo Coal, the company that owns the Vele Colliery. The applicants comprised a group of predominantly environmental and conservational non-governmental organisations (“Applicants”). CoAL responded to these appeals in August 2010 and the appellants had 21 days to comment (subject to any application to extend time) on CoAL’s response, following which the Minister of Mineral Resources (for the NOMR appeals) and the Director-General (for the EMP appeal) had 30 days in which to make a decision.⁷

CoAL also makes the following general statement regarding non-compliance with South Africa’s environmental legislation:

There is uncertainty regarding the interrelationship between these statutes in the mining context and as such complete compliance with all simultaneously is often difficult. The Board believes that the Consolidated Entity has adequate systems in place for the management of its environmental impacts but from time to time statutory non-compliances may occur.⁸

2011 company reports

CoAL’s 2011 integrated report discloses the following regarding the suspension of activities at the Vele Colliery due to CoAL’s non-compliance with environmental legislation:

Development activities at the Vele Colliery were halted by the Department of Environmental Affairs (DEA) in August 2010, due to non-compliance with South Africa’s National Environmental Management Act (NEMA) and various objections lodged by non-governmental organisations (NGOs). Consequently all operations were suspended at the mine and during the 11-month period thereafter the Company undertook a rigorous process to address these issues. The Compliance Notice was lifted by the DEA on 5 July 2011 and authorisation was granted to commence operations.⁹

CoAL makes further mention of the suspension of activities and the compliance notice issued by the DEA in its “Corporate Citizenship Review”:

In August 2010, as the first phase of the Vele project – including the opencast mining pit and processing plant – was nearing completion and production was expected to start pending the granting of an integrated water use licence, the DEA served the Company with a Compliance Notice in terms of Section 24G of the NEMA. Pursuant to the terms of the Compliance Notice, all developmental work at the Vele Colliery was stopped immediately and 596 workforce members were retrenched. The Compliance Notice has subsequently since been lifted and steps taken to resume and complete Vele’s development.¹⁰

The report discloses that environmental organisations lodged an appeal against the grant of a water use licence in the reporting year:

An appeal against the grant of the water use licence by the NGO coalition was submitted to the South African Water Tribunal on 28 July 2011, leading to the automatic suspension by operation of law of the IWUL. The Company subsequently submitted a petition to the Minister on 8 August 2011 requesting a directive that the suspension of the IWUL be lifted in accordance with Section 148 (2) (b) of the National Water Act.  Further representations were filed by the NGOs on 7 September 2011 in relation to the Company’s petition and the Company awaits the minister’s response to its petition.¹¹

The report goes on to state as follows with respect to the new order mining right:

With the new order mining right (NOMR) and Environmental Authorisation (EA) fully in place, the elements of the work programme that did not require the use of water were implemented from 5 August 2011. Minor repairs and the remaining construction of the plant were undertaken, certain earthworks completed and the process for re-employing staff commenced.¹²

The report states as follows with respect to objections raised about the Vele Colliery’s close proximity to the Mapungubwe National Park:

Given that our development assets are located in the Limpopo province, in close proximity to a world heritage site, we are aware of the need to work closely with the communities, institutions and affected parties around us, including SANParks. We acknowledge that as a resource company, we are perceived to carry a higher risk than most and that there will always be pressure from interest groups keeping a watching brief on what we do.¹³

The report states further in this regard:

Vele’s proximity to the Mapungubwe National Park has been a particular point of concern for the interested and affected parties in the Limpopo Province and Coal of Africa recognises this, and has sought to engage openly and transparently with all stakeholders through a rigorous stakeholder engagement process.

As illustrated on the map on page 9 of this report, Vele is not located within the Mapungubwe National Park, or the buffer zone as gazetted by the South African government.¹⁴

The report states as follows with respect to CoAL’s engagement with government regarding Vele Colliery:

On 1 September 2011 a historic memorandum of agreement in respect of the Mapungubwe Cultural Landscape World Heritage Site, located approximately 16 kilometres from the Vele Colliery, was signed between the Department of Environmental Affairs, South African National Parks (SANParks) and the Company. This paves the way for a new approach to working with the government in this sensitive area. This agreement has epitomised the great progress made by John and the team in the 2011 financial year regarding the Company’s relations with the government.¹⁵

With respect to CoAL’s environmental compliance in a general sense, the report states:

Our compliance capacity has been strengthened to ensure that the Company will comply with all the relevant legislative requirements. The issue of compliance was brought sharply into focus when operations at our Vele Colliery were halted due to the receipt of a Compliance Notice from the DEA in terms of Section 31(L) of the NEMA. Coal of Africa has since taken steps to rectify the non-compliance issues and was subsequently issued with the requisite EA.¹⁶

The report states as follows under the general heading of “environment”:

The Company is committed to sustainable business models for all stakeholders, compliance with applicable environmental legislation and environmental best practice. The Company understands the uniqueness of the areas in which it operates and intends to manage the operation of its collieries and the development of its future projects in an environmentally sensitive way.

…

In particular, water use and monitoring is critical to the Group’s current and proposed operations. Among other things, the Group is addressing environmental, permitting and licensing issues while implementing a remedial plan. As part of this plan the Group will seek additional authorisations as well as improve water monitoring at its various mines and projects. In respect of the Company’s development projects at Vele and Makhado, the Group is addressing any historical issues while seeking to avoid future environmental issues, including those relating to water use, heritage approvals and protected plants and trees as it plans its proposed operations at these projects. The Company understands that sustainable business practice relies on the careful management of environmental impacts, in the planning, operating and closure phases of its operations.¹⁷

In addition, the 2011 Directors’ Report states as follows under the heading “Environmental Regulations”:

The Group is subject to numerous environmental regulations in South Africa, including the National Water Act (No 36 of 1998), National Environmental Management Act (No 107 of 1998), the National Environmental Management Air Quality Act (No 39 of 2004) and the environmental provisions in the Mineral and Petroleum Resources Development Act (No 28 of 2002). There is uncertainty regarding the interrelationship between these statutes in the mining context and as such complete compliance with all simultaneously is often difficult. The Board believes that the Consolidated Entity has adequate systems in place for the management of its environmental impacts but from time to time statutory non-compliances may occur. The Board takes these seriously and the Board has undertaken a thorough review of all its activities to seek to bring them into compliance.¹⁸

The Director’s Report also provides the following summary of events that had occurred “post-year end”:

Post year end, the following significant operational events took place:

• On 5 July 2011, the Department of Environmental Affairs (“DEA”) granted authorisation in terms of section 24G of the South African National Environmental Management Act, 107 of 1998 (“NEMA”) in respect of the Vele Colliery.
• On 29 July 2011, the Vele Colliery’s Integrated Water Use License (“IWUL”) was suspended in terms of section 148(2)(b) of the South African National Water Act, No 36 of 1998 due to an appeal to the Water Tribunal submitted by an NGO coalition on 28 July 2011.
• On 1 September 2011, CoAL concluded a landmark agreement with the Department of Environmental Affairs (“DEA”), South African National Parks Board (“SANParks”) and CoAL, paving the way for collaborative and responsible mine development in Limpopo Province.¹⁹

2012 company reports

Under the heading “Environmental Performance”, the report states:

Although CoAL’s new projects – Vele and Makhado – are located in new mining territories in Limpopo province, they are not located in environmentally pristine areas. This land has been intensively farmed in the past, bringing its own challenges. Importantly, as these areas are likely to attract many new investors, CoAL needs to set a standard for newcomers and will seek to do so.²⁰

The report states the following with regard to the Vele Colliery:

A key development following the lifting of the suspension of the Integrated Water Use Licence (IWULA) and the commissioning of the wash plant at the end of February 2012, Vele’s first trainload of thermal coal was railed to the Matola terminal in Maputo, Mozambique (Matola) on 25 April 2012.²¹

The report states further:

In addition to the commitments made to the MoA and MoU with the DEA, SANParks and the Coalition respectively, as part of the Environmental Authorisation granted by the DEA, an Environmental Management Committee (EMC) and its subcommittees have been established with the main objective of monitoring and overseeing environmental compliance at Vele. The EMC, chaired by SANParks, involves relevant government departments, CoAL, NGOs, municipalities, farming communities and other stakeholders, is operating effectively and co-operatively. Hopefully this collaborative approach will prove to be a successful method for all stakeholders to adopt in similar future circumstances.²²

The report states as follows regarding CoAL’s environmental management approach:

CoAL’s first principle is compliance with legislation, combined with the development and application of good practice and innovations.

The CEO currently provides oversight of environmental issues at CoAL, while management and operational responsibility falls under the Chief Operating Officer (COO). The Company uses advisors and consultants for the following activities:

• compiling EMPs, EIAs and water use licence applications;
• water monitoring and analysis;
• fallout dust monitoring;
• fauna and flora management;
• legal compliance audits; and
• biomonitoring.²³

The report goes on to state:

CoAL is committed to complying with environmental legislation, which is comprehensive in the South African context. The most significant laws which guide environmental compliance are the MPRDA, the NEMA, the National Water Act and the Air Quality Control Act. As is required by legislation, CoAL has compiled EMPs which guide environmental management during the operation of a mine, and its eventual rehabilitation and closure. Specifically, EMPs identify impacts, mitigation measures as well as rehabilitation and closure plans. EMPs are legally binding and form part of the Company’s submission for and receipt of mining rights conversions.²⁴

The report summarises the following as “significant environmental developments during the year”:

• The Holfontein NOMR was granted and the EMP approved in February 2010.
• The Vele EMP was executed in March 2010 and the NEMA environmental authorisation awarded in July 2011.
• Vele’s IWUL suspension was lifted in October 2011.
• The EMP for Mooiplaats South was submitted in September 2009 for the extension of a NOMR to include additional farms. There is a double granting of rights with Anker and the DMR therefore alerted us that they were not going to process this EMP application. The mining plan has also been amended. The submitted EMP application will be withdrawn in the next financial year and a replacement submitted.
• Good progress has been made with Makhado’s environmental scoping report, EIA and EMP.
• The EMP and EIA for the Makhado Project were submitted post year-end in September 2012.²⁵

With respect to environmental incidents, the 2012 report states as follows:

CoAL has a system in place to deal with significant environmental incidents which need to be reported within 48 hours. This is in line with environmental legislation. There were no significant environmental incidents during the year.²⁶

The 2012 report also states as follows with regard to water use licences for its operations:

Mining companies in South Africa require IWULs in order to operate. However, there is currently a backlog of these applications at the Department of Water Affairs. The Woestalleen IWUL was granted in September 2009, while Vuna Colliery received an IWUL in November 2009 – the amended IWUL, to include an additional coal block, was granted in February 2012. The Mooiplaats Colliery’s IWUL was submitted in May 2010. The Company follows up on this regularly and according to the DWA the licence is currently with the Reserve Determination Department, which indicates that it is in the final stages.²⁷

In relation to Vele’s IWUL, CoAL states as follows regarding its suspension by the Water Tribunal:

Vele Colliery’s IWUL was granted by the DWA in March 2011. The IWUL was suspended in terms of Section 148(2)(b) of the South African National Water Act due to an appeal to the Water Tribunal by an NGO coalition in July 2011. The Company made an urgent counter-appeal to the Minister of Water Affairs, requesting that the IWUL remain in full force and effect in this interim period and until the final conclusion of the appeal. This IWUL suspension was lifted in the second quarter of FY2012, enabling the use of water at the colliery and its construction to continue.²⁸

The 2012 report repeats its statement on environmental compliance in a general sense from the previous year:

The Group is subject to numerous environmental regulations in South Africa, including the Atmospheric Pollution Prevention Act (No. 45 of 1965), Environment Conservation Act (No. 73 of 1989), National Water Act (No. 45 of 1965), National Environmental Management Act (No. 107 of 1998), the National Environmental Management Air Quality Act (No. 39 of 2004) and the environmental provisions in the Mineral and Petroleum Resources Development Act (No 28 of 2002). There is uncertainty regarding the interrelationship between these statutes in the mining context and, as such, complete compliance with all simultaneously is often difficult. The Board believes that the Consolidated Entity has adequate systems in place for the management of its environmental impacts but, from time to time, statutory non-compliances may occur. The Board takes these seriously and the Board has undertaken a thorough review of all its activities to seek to bring them into compliance.²⁹

2013 company reports

CoAL states as follows in its 2013 report regarding its environmental management systems:

The environmental management systems (EMS) at the operations are largely based on the criteria as per the environmental authorisations (environmental management plan report (EMPR), NEMA, authorisations and IWULs).

At Vele, the development of procedures and guidelines with ISO 14001 requirements is progressing. A formal EMS aligned to the requirements of ISO 14001 is scheduled to be developed and implemented during FY2014 with a view to begin the process toward certification in FY2015.

An environmental database is currently being developed and will be implemented during FY2014. This will ensure the recording and reporting of key performance indicators in a formal, structured system.³⁰

The report states that “no significant environmental incidents were reported for the period under review” and that:

To date, no formal complaints were received from local or affected communities regarding environmental matters at any of the operations.³¹

Under the heading of “monitoring of compliance”, the report states as follows:

Monitoring is undertaken through routine daily inspections, review of independent service provider’s performance reports, weekly management and operational reviews, performance assessment reports and implementation of the internal environmental risk assessment and tracking system. At Vele an independent Environmental Control Officer (ECO) has been appointed to audit the colliery against its environmental obligations. Third-party consultants are used in all instances where authorisations require independent audits to be conducted. A third-party legal compliance audit was conducted during FY2013 on the Mpumalanga operations.³²

The report references the section 24G process in terms of NEMA in the context of its operational review of the Vele Colliery:

Primary stakeholder engagement at Vele has been through the Environmental Monitoring Committee (EMC), established through the Section 24G authorisation to monitor compliance across all regulatory frameworks. In addition, the EMC facilitates intervention to mitigate risks and manage environmental impacts. Quarterly meetings have been held throughout the year, with participation from national, regional and local government level.

The 2013 Annual Report of the EMC states “… it can be confirmed that Limpopo Coal Company (Vele) is complying with the legal requirements. No negative impacts on the heritage and biodiversity resources have been reported and the quality and quantity of the water resources has been maintained according to the defined prescriptions.” Vele continues to strive to set new standards in the co-existence between mining, heritage and agriculture.

The Colliery remains committed to the maintenance of the integrity of the Outstanding Universal Value of the Mapungubwe Cultural Landscape.³³

The 2013 report states as follows in its “operational” review of its Mooiplaats operation:

Regular interaction with local and provincial government on regulatory and compliance issues are held resulting in the positive record of decisions obtained for the Integrated Water Use Licence (IWUL) and the Section 24G. The settlement of the criminal prosecution relating to alleged offences dating back to 2010 was the result of extensive collaboration and co-operation between CoAL and all the regulatory authorities, namely, Department of Mineral Resources, the Department of Water Affairs (DWA), and Mpumalanga Department of Environment and Tourism (MDEDET).³⁴

Under the heading “regulatory compliance update”, the report states as follows with regard to the Vele Colliery:

• At the Vele Colliery, a permit was received from the Department of Agriculture, Forestry and Fisheries to relocate four trees protected in terms of Section 15(1) of the National Forests Act, 1998 (Act 84 of 1998) for trees in the area that may be affected by mining activities. The permit has since been executed in accordance with the required conditions.
• Vele was also granted permission by the Department of Environmental Affairs to construct a 14km Eskom power line to supply power to the modular processing plant.
• The process to revise the approved Environmental Management Programme (EMP) at Vele Colliery in terms of Section 102 of the Mineral and Petroleum Resources Development Act, 2002 will commence during the 2014 financial year.
• Approval granted by the Department of Environmental Affairs to start developing the group Environmental Management System (EMS) required in terms of the Environmental Authorisation.
• The Department of Water Affairs has in principle, approved the river diversion design/report.³⁵

The report states as follows with regard to “regulatory compliance” at Makhado:

• The mining right application is in progress pending the finalisation of a BEE transaction;
• Awaiting a decision from LEDET on Listed Activities in terms of the National Environmental Management Act 107 of 1996; and
• Integrated water use licence application (IWULA) – continuous engagement with the Department of Water Affairs to address areas of concern and supply additional information as requested. Awaiting a decision on the Waste license [sic] application.³⁶

The report states as follows with regard to “regulatory compliance” at the Greater Soutpansburg Project:

• Submitted new order mining rights applications for the following projects:
  • Mopane;
  • Chapudi; and
  • Generaal.
• Environmental Impact Assessment (EIA) for the Mopane Project and Public Participation for the compilation of scoping reports for the Chapudi and Generaal projects are underway;
• On-going engagement with the land claims commission and land claimants in order to ascertain the potential impacts of project development; and
• NEMA authorisations and water use licence applications will be submitted in a separate process in 2014.³⁷

With regard to “regulatory compliance” at Mooiplaats, the report states:

• Amended EMP was submitted in April 2011 and approved in September 2012;
• Integrated water use license application (IWULA) was submitted in May 2010, approved in May 2013;
• Section 24G NEMA authorisation for rectification applications was received in April 2013; and
• A new social and labour plan (SLP) for the next five years has been submitted to the Department of Mineral Resources for approval.³⁸

CoAL states as follows in relation to “regulatory compliance” at Woestalleen:

• Amended EMP to include the new co-disposal facility and water management system was submitted in December 2012;
• Amended IWULA was submitted in March 2012; and
• Application for new co-disposal facility and water management system submitted in February 2012 in terms NEMA [sic].³⁹

2014 company reports

In its 2014 report, CoAL states as follows regarding the company’s environmental compliance:

On the environmental side, we have again had the opportunity to review all our on-site processes with respect to all our licensing provisions. The South African mining industry is a significantly regulated industry and adherence to those regulations is a priority. For example at Vele Colliery, we have licence requirements under the Department of Mineral Resources (DMR), Department of Environmental Affairs (DEA) and the Department of Water Affairs (DWA). This complex interplay requires a diligent monitoring process. To ensure we have line of sight for all the requirements and monitor all actions on site, CoAL had to design and implement a system to record the full spectrum of activities. During the year under review, we ensured compliance at our sites, particularly at Vele Colliery. I wish to extend my thanks to the Environmental Management Committee (EMC), which draws all relevant internal and external stakeholders together, for their monitoring work. This committee truly represents the vision that industry and the agricultural and leisure sectors can co-exist. It is important for all to understand one cannot work without the other.⁴⁰

The report states the following regarding compliance at Vele Colliery:

Vele Colliery’s operating activities were suspended in 2013 in anticipation of the commencement of construction activities for plant modification… The plant modification designs necessitated a review of the Vele Colliery EA in terms of NEMA and an application for non-substantive amendments. This application was lodged in March 2014 and comments from I&APs have been received and incorporated into the environmental management report, which was submitted to the DEA in July 2014 for a final decision.

Vele Colliery was granted an IWUL in March 2011, which was valid for a period of five years. The colliery has continuously complied with the conditions of its IWUL and monitors compliance through internal inspections and external audits conducted by the DWA as well as audits conducted by the Environmental Compliance Officer as required by the EA.

Upon CoAL Board approval in August 2013 for the Vele Colliery plant modifications, Vele Colliery embarked on a roadshow presenting the modifications to all national and provincial regulatory authorities, including the potential impact on the regulatory status of the mine. Vele Colliery was advised to submit applications for the amendment of its EA, as well as its IWUL. The application to amend the Vele Colliery EA was submitted to the DEA in March 2014 and the record of decision is expected shortly. An application to renew and amend the IWUL was submitted to the DWA in August 2014. Although the IWUL amendments do not affect the mining footprint, this will allow for greater stockpile capacity at the colliery once the plant modifications have been completed.⁴¹

The report states as follows regarding stakeholder engagement at the Vele Colliery:

Stakeholder engagement activities at Vele Colliery during the year under review focused on regulatory authorities and the EMC. The EMC was established in terms of the EA as an oversight committee to monitor the colliery’s compliance in respect of the EA and IWUL. The EMC comprises representatives of regulatory authorities, relevant government departments, municipal representatives, civil society (represented by the Coalition) and other key stakeholders identified during the initial public participation process. The EMC meets quarterly and has functioned effectively since its inception with constructive recommendations resulting in improved compliance at the colliery.⁴²

The report states the following under the heading “monitoring of compliance”:

An independent environmental consultancy has been appointed to conduct regular monitoring, inspection and auditing at the Mooiplaats Colliery. This includes water, dust and vegetation monitoring, monthly inspections, and IWUL, EMP and EA audits. This is enhanced by regular inspections conducted by the on-site team and Group head of department inspections/visits. The EMS at the Vele Colliery includes comprehensive monitoring and auditing schedules to facilitate structured management and compliance with all monitoring and auditing requirements as required by the colliery’s licence conditions. Monitoring and inspection at Vele Colliery includes the assessment of surface and groundwater quality and quantity, dust, biodiversity, heritage resources, threatened or protected species, plant moisture stress, bio-monitoring and ecotoxicology, habitat and vegetation assessments and alien plant monitoring.

This is supplemented by daily, weekly and monthly inspections conducted by the on-site environmental team who also conduct audits on the site’s IWUL, EMP and EA. In addition, Vele Colliery has a full-time independent environmental control officer (ECO) appointed to monitor compliance in terms of licence requirements. The ECO conducts daily, weekly, and monthly inspections with reports circulated to the colliery and Company management teams; highlighting areas for improvement, which are then recorded on the EMS and monitored for progress, implementation and compliance.

Additionally, the ECO compiles a quarterly environmental performance report (EPR), which is submitted to the DEA. The last quarterly report, submitted on 5 August 2014, indicated a commendable compliance score of 92%.

The Company employs autonomous consultants for all authorisations that require independent audits to be conducted. Both Mooiplaats and Vele collieries have conducted external IWUL audits, EMP performance assessments, and financial closure and liability assessments, which were submitted to the regulatory authorities as required.⁴³

As was the case in CoAL’s 2013 report, the 2014 report also states that “no significant environmental incidents were reported for the period under review” and that “to date, no formal complaints were lodged or received from local or affected communities regarding environmental matters at any of our operations”.⁴⁴

Under the heading “Regulatory Processes, Permits and Licences”, the report states as follows with respect to Mooiplaats Colliery:

Mooiplaats holds valid EAs and remains in compliance with regulatory authorisations such as EMP, IWUL and environmental authorisation.⁴⁵

With respect to Vele Colliery’s “Legal Compliance”, the report states:

Vele Colliery continues to demonstrate compliance with the relevant regulatory authorisations (EMP, IWUL and EA). Vele Colliery was granted an IWUL by the DWA on 29 March 2011 and the amended IWUL was granted on 18 July 2011, valid for a period of five years, expiring in March 2016. Vele Colliery continues to demonstrate compliance with the conditions of its IWUL, monitored via sampling, internal inspections and external audits conducted by the DWA as well as audits conducted by the ECO and external specialists, as required by the IWUL. In August 2013, the CoAL Board approved modifications to the current plant to enable greater beneficiation opportunities. This modification project requires an application for amendment and renewal of the current IWUL. Following consultation with the DWA, CoAL submitted the IWUL application for amendment and renewal during FY2015.

In addition, two stream diversions have been designed to ensure the distribution of potential clean water to the east and west of the open pit and plant infrastructure areas. We have engaged the DWA on the stream diversion plans, which have been conceptually approved by the regulating authority. As the water-use activity triggers NEMA listed activities, we have opted to proceed with a parallel EIA and IWULA process, as it relates to the stream diversion, and have appointed an independent consultant to complete this. This EIA process is expected to commence in first half of FY2015, and we will continue to engage with regulating authorities and key stakeholders on the regulatory processes required for the stream diversions.⁴⁶

Under the heading “Environmental Authorisation”, the report states as follows:

Vele Colliery was granted an EA for Section 24G on 5 July and 31 October 2011 respectively, and continues to comply with the requirements as stipulated in the EA. A review of the EA during FY2014 indicated an amendment was required to revise non-substantive issues and an application was subsequently submitted to the DEA during the third quarter of FY2014. A background information document was made available to all stakeholders, inviting comments for consideration from I&APs, and all relevant documents submitted to the DEA.⁴⁷

The report goes on to state as follows regarding rehabilitation and biodiversity:

Biodiversity is monitored closely by field experts who conduct regular assessments, including vegetation monitoring, aquatic invertebrate monitoring, as well as flora and fauna assessments. Where disturbance is unavoidable, sustainable alternatives are investigated to ensure that potential impact is minimised. In addition, the biodiversity offset agreement has been approved, in principle, by the DEA, South African National Parks (SANParks) and CoAL, and is expected to be finalised during the second quarter of FY2015.⁴⁸

With respect to compliance at Makhado, the report states:

The Makhado Project was granted an EA during August 2013. An IWUL application was lodged with the DWA in December 2012 and we continue to engage with the regulating authority in this regard, cognisant that the NOMR is required prior to granting of the IWUL.⁴⁹

With respect to the Greater Soutpansberg Project, the report states:

In order to comply with legislation, CoAL embarked on the MPRDA process during FY2014, following submission of the NOMR applications during FY2013. This included compilation and submission of an EIA and EMPs for all three projects Mopane, Chapudi and Generaal.⁵⁰

The report states as follows with respect to CoAL’s sale of Woestalleen Complex:

On 31 January 2014, the Department of Mineral Resources (“DMR”) granted Section 11 approval in terms of the Mineral and Petroleum Resources Development Act (“MPRDA”) for the disposal of the Woestalleen Complex. The sale consideration of ZAR80 million ($7.6million) was received on 6 March 2014.⁵¹

2015 company reports

Under the heading “Regulatory Engagement: Earning our Legal Licence to Operate”, the report states:

Regular engagement with all tiers of government – national, provincial and local – is a core component of the stakeholder engagement framework. CoAL endeavours to build partnerships to create an enabling environment for the delivery of government’s transformative agenda as it relates to improving the quality of life for all South Africans.⁵²

The report states as follows regarding CoAL’s monitoring and compliance:

Despite the reduced activity during FY2015, CoAL remains committed to meeting its regulatory commitments and Vele continues to conduct its environmental monitoring at the same frequency as it was conducted when operating.

This includes the assessment of water resources and potential impacts, air quality, bio monitoring, ecotoxicology, biodiversity, habitats and vegetation, threatened and protected fauna and flora species, plant moisture stress and alien plant eradication. Furthermore an independent archaeologist appointed by the Company undertakes monthly assessments of identified heritage resources. Vele Colliery is subject to quarterly audits by external, independent environmental auditors. The last quarterly report for FY2015 noted that the EMS: ‘Conforms to the planned arrangements for managing environmental matters; is well established with procedures in full conformance’. In addition to the monitoring and assessments conducted by external specialists, the EO conducts monthly inspections and regular audits on the environmental licences, conducted as part of the EMS quarterly audits.⁵³

The report also states the following regarding a court application instituted for an interim interdict against mining activities at the Makhado Project on the basis that the environmental authorisation should be reviewed:

Limpopo Department of Economic Development, Environment and Tourism (LEDET) issued the Environmental Authorisation (EA) for the Makhado Project during August 2013 in terms of NEMA and Environmental Impact Assessment Regulations, 2010. Certain IAAPs, which includes a group of farmers, obtained an interim interdict in December 2014 against the project’s EA, pending the finalisation of a regional environmental impact assessment. CoAL has subsequently lodged an application to rescind the interim interdict and the matter is scheduled to be heard during the third quarter of CY2015.⁵⁴

Under the heading “Regulatory Processes, permits and licences”, the report states as follows:

Approval for the Makhado Project EA was received in FY2014 and the NOMR was granted in May 2015.  Engagement with the DWS on the project’s IWUL application is at an advanced stage and the Company continues to engage with the department.⁵⁵

Under the same heading, the report states the following with respect to the Vele Colliery:

Furthermore, Vele concluded a historic BOA [biodiversity offset agreement] with the DEA and SANParks to the value of ZAR55 million. The BOA seeks to promote a cohesive approach to the management of natural resources and the commitment is over the LOM, fulfilling the colliery’s legal requirement in terms of its EA. CoAL views offsets as an absolute last resort and the primary objective of the BOA is to achieve sustainable utilisation of natural capital in order to accomplish the goal of conservation and preservation of the Mapungubwe cultural landscape World Heritage Site. The Company is confident that this landmark agreement will demonstrate that co-existence between mining, heritage and agriculture is not only achievable but also sustainable. A project steering committee has been established to monitor implementation of the BOA with SANParks as the implementing agent.⁵⁶

The report also states as follows in relation to the environmental authorisation for Vele:

The amendment to the EA was granted in January 2015. An appeal against this decision was lodged with the Minister of Environmental Affairs by IAAPs. The Company has timeously filed responding statements and is now waiting the decision from the minister.⁵⁷

The report states the following in relation to the IWUL for Vele:

In 2011, Vele Colliery was granted an IWUL for its operations, valid for a period of five years expiring in March 2016. During the reporting period, CoAL submitted an application for the amendment and renewal of the colliery’s existing IWUL for a 16 year (opencast) LOM period. The Company continues to engage with the DWS and the process of approval is at an advanced stage.⁵⁸

The report states as follows with respect to stakeholder engagement at Vele Colliery:

The Company continues to participate in the Environmental Management Committee (EMC), established as an oversight mechanism in terms of Vele’s EA… The EMC has the mandate to monitor Vele’s compliance in respect of its EA and IWUL. The Committee meets quarterly and conducts annual site visits.⁵⁹

The report states as follows in relation to compliance at Greater Soutpansberg:

The DMR is processing the NOMR applications for the three GSP Projects, namely Chapudi, Generaal and Mopane and additional information has been provided to the department. The EA and IWUL will be applied for upon finalisation of feasibility studies for the three projects.⁶⁰

With respect to Mooiplaats, the report states:

The Mooiplaats Colliery has been under care and maintenance since October 2013 and is currently undergoing a formal disposal process. The colliery remains compliant with all regulatory frameworks.⁶¹

CoAL reports that there were no significant environmental incidents in 2015. According to the report, one environmental complaint was received from a community located within the Makhado Project area. The report describes the complaint as relating to “potential impacts from the bulk sample pit on the water and air quality in the community”. CoAL stated that it undertook a site visit with a regulator and conducted dust and water quality monitoring but results indicated that the sample pit has no impact on the air and water quality of the community. There were reportedly no formal complaints from communities regarding environmental matters at the Mooiplaats or Vele Collieries.⁶²

2016 company reports

[This section was not included in the version of the assessment sent to CoAL for comment on 17 October 2016, as CoAL’s 2016 Integrated Annual Report was published after that date.]

Under the heading “Earning our legal licence to operate”, the 2016 Integrated Report states:

The Company is acutely aware of the need to balance the socio-economic potential of mining development with the potential impact it may have on natural and heritage resources. This is accomplished through building enduring relationships and strengthened co-operation between all stakeholders of CoAL, including government and communities.⁶³

The report states as follows regarding CoAL’s monitoring and compliance:

Monitoring and auditing continues as per permit conditions at both Vele and Mooiplaats, despite the current care and maintenance status of the collieries, in line with the Company’s commitment to meeting its regulatory obligations as a minimum. Monitoring includes ground and surface quantity and quality assessments, biomonitoring, ecotoxicology, plant moisture stress, invasive alien plant species and eradication status, habitat assessment, rehabilitation monitoring, biodiversity and avifaunal assessment, riverine forest monitoring, threatened and protected fauna and flora assessments as well as monitoring of identified heritage resources, as applicable to the operation.

Despite no mining activity currently underway at Makhado, given that it is still in project status, the Company has been conducting regular dust, surface and ground water monitoring at the project area in line with our commitment to environmental social responsibility. The results continue to indicate that the bulk sample pit has no impact on the air or water quality of the community.

…

All environmental audits, as required by the different licenses, have been conducted by independent consultants, including the annual external IWUL audit, Environmental Management Programme performance assessments, and financial closure and liability assessments.⁶⁴

In relation to the court application instituted for an interim interdict against mining activities at the Makhado Project, the report states:

The Environmental Authorisation was issued in terms of NEMA and Environmental Impact Assessment Regulations, 2010. The interested and affected parties, which include a group of farmers, obtained an interim interdict against the Environmental Authorisation pending the finalisation of Regional Environmental Impact Assessment [sic] and review of the decision to grant the authorisation in November 2014. The High Court amended the interdict by removing the section that requires the Regional Impact Assessment in December 2015. CoAL is opposing the matter in the High Court and is confident that the interdict will be rescinded.⁶⁵

In relation to the Water Use Licence granted for the Makhado Project, the report states:

Baobab was granted an IWUL by the Department of Water and Sanitation during January 2016.

In February 2016 an appeal was lodged, by the same group of farmers that lodged against the Environmental Authorisation, against the IWUL resulting in the suspension by law. Baobab has since compiled a responding statement which has been sent to the Minister of Water and Sanitation, accompanied by a petition for the Minister to lift the suspension of the IWUL.⁶⁶

In relation to the Biodiversity Offset Agreement, the report states:

The Project Steering Committee, established to monitor implementation of the Biodiversity Offset Agreement, meets on a quarterly basis with SANParks as the implementing agent. CoAL continues to meet its financial commitment to the Biodiversity Offset Agreement. During the period under review, three thematic areas for projects were identified and finalised at the Project Steering Committee level. These include biodiversity conservation, cultural heritage management and tourism development.⁶⁷

In relation to Vele Colliery, and under the heading “Environmental Authorisation”, the report states:

The Company applied for an amendment to the Environmental Authorisation which was granted in January 2015. The decision to grant the amendment to the Environmental Authorisation has been appealed by a group of farmers but the Minister of Environment dismissed the appeal in October 2015. The appellants subsequently lodged a High Court application for the review of the decision to grant the amendment to the Environmental Authorisation. This will be opposed by the Company and a notice of intention to oppose the application has already been filed.

The Company has applied for the authorisation of activities associated with two non-perennial streams diversions which will be required during mining in the north pit. CoAL is currently busy with public participation and will be submitting the scoping report thereafter.⁶⁸

The report states the following in relation to the IWUL for Vele:

Vele applied and was granted a new IWUL by the Department of Water and Sanitation in December 2015 for a period of 20 years.

Vele Colliery continuously complies with the conditions of its IWUL, monitors compliance through internal inspections and external audits conducted by the Department of Water and Sanitation, as well as audits conducted by the Environmental Compliance Officer as is required by the authorisation. An application for the renewal and amendment of the IWUL is being processed by the Department of Water and Sanitation. An application for water use for some activities, due to the stream diversion, will also be lodged with the Department of Water and

Sanitation and a notice of intention to apply has been issued to all the registered interested and affected parties.⁶⁹

In relation to the Great Soutpansberg projects (GSP), the report states as follows:

The GSP, situated to the north of the Soutpansberg mountains, comprises of four project; Mopane, Generaal, Chapudi, and Telema & Gray. These are owned by MbeuYashu (Pty), a company jointly owned by CoAL (74%) and its BEE partner, Rothe Investments (Pty) Ltd (26%).

We await the records of decision in respect of the NOMR applications submitted to the Department of Mineral Resources (DMR) in 2013.

The model of co-existence between mining, agriculture and heritage developed at Vele Colliery will be implemented not only at the Makhado Project, but also within the GSP.

There were no activities relating to this project during the period under review.⁷⁰

In relation to the Mooiplaats Colliery, the report states:

The Mooiplaats Colliery has been under care and maintenance since September 2013 and is currently undergoing a formal disposal process. Mooiplaats Colliery remains compliant with all regulatory frameworks.⁷¹

Under the headings “Environmental incidents” and “Complaints” the report states:

No significant environmental incidents were reported for the period under review.

And

No formal complaints were lodged/received from local or affected communities regarding environmental matters at either our Mooiplaats or Vele Collieries.⁷²