Full Disclosure 2016

Kumba Iron Ore Limited's disclosure of environmental non-compliances in annual reports

2011 company reports

The 2011 Sustainable Development Report states that no fines or non-monetary sanctions were imposed for non-compliance with environmental laws and regulations during the year.¹ However, it is also reported that environmental legal compliance audits were conducted at operations during the year and that “the following key issues requiring improvement were identified”:

• completion of remediation work on legacy groundwater contamination;
• stormwater management;
• eradication of alien and invasive species; and
• waste management.²

The 2011 Sustainable Development Report states that Kumba’s incident reporting procedures are in line with the ISO 14001 management systems in place at all of Kumba’s operations and that incidents are classified according to the Anglo American plc classification system, which ranges from Level 1 (insignificant) to Level 5 (catastrophic).³

There were seven Level 3 (moderate) incidents reported during the year, all of which occurred at Sishen mine. Six of the incidents related to water or borehole incidents and one involved an accidental fire at a landfill. The report states that remedial action was taken immediately and monthly follow-up monitoring of the water-related remediation measures was implemented in all seven incidents.⁴

With respect to water management, the report states that excess clean groundwater from dewatering activities at Sishen and Kolomela mines was exported to the local authority in line with approved WULs for use by surrounding municipalities. With respect to Thabazimbi mine, the report states:

Thabazimbi mine does not have a water licence to discharge any of its water. No unplanned discharges are believed to have occurred during the year at any of the company’s operations and no natural water bodies were affected by water discharge or runoff as a result.⁵

With respect to complaints by affected parties, the report states that numerous complaints had been received since 2000 concerning alleged lowering of water levels in the area around the Sishen mine.⁶ The report states that “at local environmental meetings Kumba has itself committed to determining the impact of its dewatering and to assist those found to be affected”.⁷ It states further that a geohydrological study was carried out by an external consultant between 2002 and 2007, and that this study found that a number of private landowners to the south of Sishen had been affected by abstraction of groundwater from the Sishen mine.⁸

Kumba’s 2011 report states that the following measures of assistance were provided to affected parties:

• provision of water through pipeline infrastructure and mobile water tankers;
• testing of pumps at existing boreholes and installation of pipelines;
• drilling new boreholes, testing existing pumps and installing new pumps;
• provision of grazing land and subsidies;
• provision of water tanks for storage; and
• purchase of affected farms.⁹

The report states that contamination of groundwater at Sishen mine which occurred in the 1990s from a burst fuel pipeline has “largely been addressed”.¹⁰ In this regard, the report notes that “contaminated water is collected in subterranean drains, pumped out, treated and reused in the plant. Kumba will continue to treat the contamination until it is clean.” The 1990s spill also reportedly resulted in “major contamination of soil”, which was still being treated.¹¹ The report also states that “unexplained diesel spillages around fuelling stations” occurred in 2011, and that improved operational measures such as new nozzles at filling stations and bunding in areas where spills can occur were implemented, and that soil was removed and treated using bioremediation.¹²

In relation to biodiversity, the 2011 report notes that there has been a deterioration in the condition of camel thorn trees on mine land and that a study was being undertaken to assess the impact of mining on the trees.¹³

2012 company reports

The 2012 Sustainable Development Report states that Kumba’s new safety, health and environmental policy was approved in September 2012.¹⁴

Kumba reports that in 2012 all of its operations had their requisite permits, including EIA authorisations, waste licences, emission licences, MPRDA and water use licences.¹⁵

The report also mentions that a DMR compliance visit to Heuningkrans, a farm in the Postmasburg area, was undertaken during August 2012.¹⁶ The findings of this compliance visit are not disclosed.

The report states that no environment related directives, penalties, warnings or other sanctions were issued against any operations during the year.¹⁷ There were also no Level 3, 4 or 5 incidents.¹⁸

The 2012 Sustainable Development Report also references “conflicts of interest on dewatering” and reports that complaints relating to water quality in boreholes within the Gamagara River system were received during the year.¹⁹ The report states that:

As part of the investigation of these complaints, samples have been collected and sent overseas for analysis as there are currently limited laboratories locally to perform this analysis.²⁰

2013 company reports

The 2013 Sustainable Development Report states that EMPs and IWULs are in place at all operations and that the IWULs for Thabazimbi and Kolomela were in the process of being amended to include new activities.²¹

However, it is also stated that:

At the end of 2013, 21 business-critical environmental authorisations were awaiting approval by various government departments. We continue to engage with the DMR and other government departments in that regard.²²

It is reported that two environmental directives were received during the year, at Thabazimbi and Sishen mine, but no fines for non-compliance were issued. At Thabazimbi the DMR requested an increase in financial provision in respect of possible pit slope failure, and Sishen mine received an MPRDA Section 93 directive which reportedly “raised a number of environmental non-compliance issues”.²³ The nature of these issues is not disclosed. The report states only that the mine had responded to DMR and addressed the issues raised.

There were six Level 2 incidents during the year. These related to hydrocarbon spills, a burst tailings pipeline and the destruction of protected trees.²⁴ The report states that: “All these incidents were investigated and appropriate corrective and preventive actions were implemented.”²⁵

The 2013 report also referred to the “concerns” of farmers that dewatering due to mining activities lowered the water table and thereby affected grazing and farming activities.²⁶ The report states that Kumba had a “non-confrontational approach” to the issue and sought to establish “sound neighbourly relations based on allaying the farmer’s concerns” and that as part of a continuing process, it had:

• Provided alternative grazing or grazing subsidies;
• Provided infrastructure that allows affected farmers to withdraw water from the Sedibeng Water pipeline;
• Drilled and equipped boreholes that feed into existing farm water reticulation systems; and
• In extreme, temporary cases, trucked water to where it has been needed.²⁷

It further states that that these were temporary solutions, and that the company had “engaged with local farmers regarding scientific approaches to address specific concerns” including the claims of surface water flow in the Gamagara River.

Also in relation to water, it is reported that testing was underway to assess whether boreholes were being polluted by nitrates from Sishen mine.²⁸

It is reported that there had also been claims that mine dewatering had affected the Kathu protected forest, in particular the camel thorn trees, but that research by the Council for Scientific and Industrial Research had “thus far been inconclusive”.²⁹

2014 company reports

In 2014 the Kolomela mine received two directives from the DMR. It is reported that these related to “insufficient financial provision, poor hydrocarbon and storm water management among others”.³⁰ Sishen mine also received a pre-directive from DWS, which related to “lack of calibration certificates for flow meters, incorrect numbering of boreholes and storm water management”.³¹  The report notes that “responses and action plans were compiled and sent to both the DMR and DWS. None of these directives led to stoppages or fines”.³²

It appears that some operations are possibly operating without the appropriate WULs, as the report states that “delays with issuing of water use licences are still concerning, however, although significant progress has been made in progressing these”.³³

According to the Sustainable Development Report, there was one Level 3 incident during the year, which occurred at Sishen mine and related to the “overflow of oil separator”.³⁴ There were also eight Level 2 incidents involving soil and water pollution by hydrocarbons and contaminated waste or process water from spillages, burst pipes and the failure of process equipment.³⁵ The report states that “all incidents were investigated, and appropriate corrective action was taken to address the respective root causes”.³⁶

The Sustainable Development Report also notes that there were four complaints relating to contaminated water at Sishen mine. The report states that these related to pollution following the overflow of a municipal wastewater treatment plant, oil-contaminated water in the pipeline that supplies farmers and red oily water which flowed onto neighbouring farms.³⁷

The Sustainable Development Report notes that there were a further 13 complaints during the year which related to blasting, vibration, lowered water tables and excessive dust.  With respect to these complaints, the report states that:

All complaints are logged in the complaints register and investigated. Findings are presented to the complainants before mitigation measures are put in place.³⁸

It is reported that there were a number of exceedances of the permitted PM10 dust emission limits. Sishen mine exceeded the limit 14 times and Kolomela exceeded the industrial dust fall-out levels twice. Kolomela and Sishen also exceeded the new PM10 standard (effective from January 2015) “several times”.³⁹ The report states that “additional measures, such as increasing the frequency of dust suppression, are being taken to ensure compliance in 2015”.⁴⁰

There were also 8 “major non-conformances” identified at Thabazimbi mine, 5 at Sishen mine and 5 at Kolomela mine. “Major non-conformances” are described as “section 54 and 55 notices, environmental directives and major non-conformances raised by Bureau Veritas”.⁴¹ Bureau Veritas assesses compliance with the ISO 14001 environmental management systems standard. In relation to these “non-conformances”, the report states that: “Corrective action plans to prevent recurrence were implemented and shared with the respective auditors”.⁴² The “auditors” in this regard are described as Bureau Veritas, DMR, PwC, and DEA.⁴³

2015 company reports

The 2015 Sustainability Report states that:

In 2015, no fines, directives or non-monetary sanctions for non-compliance with any environmental regulations, licences or permits were imposed by authorities on any of our operations.⁴⁴

However, there were 8 “major non-conformances” identified at Sishen mine. Major non-conformances are described as “section 54 and 55 notices, environmental directives and major non-conformances raised by Bureau Veritas”.⁴⁵ The report states that corrective action plans to prevent recurrence were implemented and shared with the respective auditors. The “auditors” in relation to Sishen are described as “Bureau Veritas, PwC, DMR, and Shangoni”.⁴⁶

The report notes that in 2015 there was one Level 3 incident.⁴⁷ This involved a pit slope failure at Thabazimbi mine which resulted “in approximately 250,000m3 of water being ejected from the pit, which exceeded the storm-water catchment capacity and flowed into the Crocodile River, impacting the river and its flood plain”.⁴⁸ The report states that the company “responded timeously to mitigate the negative impacts and conducted an impact assessment of the river, which indicated that there was no immediate change to the fish or invertebrate community”.⁴⁹ The report states further that “water quality monitoring and a fish health assessment study have been completed and indicated no harmful impacts”.⁵⁰

The report notes that there were 113 Level 1 incidents, which primarily related to oil spills and to water, waste management and excessive dust.⁵¹

The Integrated Report states that there were 23 environment related community complaints during the year. These related to receding ground water levels, contaminated borehole water, dust and illegal hunting.⁵² The Sustainability Report, on the other hand, states that:

In 2015, 242 community complaints were submitted through formal procedures at our various operations. All were assessed, and 150 of them were resolved. The majority of community grievances were related to the Dingleton resettlement and to potential environmental impacts, such as blasting and dust, from Sishen mine’s operations.⁵³

The Sustainability Report also states that the “Sishen and Kolomela mines continue to manage issues of concern among local farmers regarding mine dewatering that potentially affects the availability of groundwater.”⁵⁴ In this regard, the report states:

Our Kolomela and Sishen mines pump groundwater that is in excess of operational needs to Sedibeng Water. In 2014, we finalised a sales agreement with the water authority to supply bulk water to farmers, to compensate for their potential losses from private boreholes. In 2015 we made progress with implementing new projects, including a new water pipeline at Sishen and using treated effluent (grey water) from the Kathu wastewater treatment works, to increase the export of groundwater to the Sedibeng reservoir.⁵⁵

The Integrated Report states that some concurrent rehabilitation work had been deferred “as part of cash preservation”.⁵⁶ The Sustainability Report expands on this by stating:

Our operations set rehabilitation targets for 2015. Progress in addressing backlogs was, however, limited during 2015. There has been a backlog against our rehabilitation target of 61 hectares due to cash preservation.⁵⁷

The Sustainability Report goes on to state that:

Due to changes in mining plans (as updated annually) and the discovery of ore formations, Sishen mine has had to adapt its approach to backfilling and rehabilitation. Approval was issued this year for an amended environmental management plan (EMP) for Sishen Western waste rock dump and extension of the Protea waste rock dump with a condition to backfill as much as possible. During 2015, we completed a study of the viability of implementing this condition and we will engage with authorities early in 2016 to discuss options. Other requested amendments are still under consideration by the DMR.⁵⁸

With respect to problems associated with dust, the Sustainability Report states that:

In 2015, PM10 dust emission levels remained within the legally allowable limits at Kolomela and Thabazimbi, however, dust emission levels, specifically PM10 emissions, continue to pose a challenge at Sishen, where there have been a number of exceedances.⁵⁹

With respect to mitigating dust, the report states:

We are currently implementing various dust suppression measures. These include the usage of ‘dust-aside’ and ICAT on our primary and secondary roads, the installation of dust extraction systems in the plant, and water cannons and mist foggers on our stockpiles and conveyor belts.⁶⁰

In the Integrated Report it is stated that:

Challenges remain with the timely processing of applications for certain permits and licences.⁶¹

Specifically in relation to WULs it was reported in the Sustainability Report that:

The rapidly changing regulatory environment can result in delays in obtaining water licences. We continue to engage with the Department of Water and Sanitation (DWS) to mitigate licensing delays and ensure that all water use licences (WULs) are in place. An important achievement this year was the issuing of some long-awaited integrated water use licences following extensive engagement with regulators. Two water licences remain outstanding and have resulted in delays in the implementation of Sishen storm-water infrastructure and Kolomela aquifer recharge projects. We are working towards implementing all measures prescribed by our licensing conditions as soon as reasonably practicable, given our capital constrained environment. We are focusing on constructing the most critical infrastructure first.⁶²

The report further states that Thabazimbi mine stopped mining operations in September 2015, and that the plant was due to cease running by March 2016.⁶³ With respect to rehabilitation, the report states:

Technical studies to support the Thabazimbi closure plan progressed well and rehabilitation requirements are being managed by dedicated mine closure resources. A seed ecology study is underway, which will inform how re-vegetation of the long slopes will be managed.⁶⁴