Full Disclosure 2016

Northam Platinum Limited's disclosure of environmental non-compliances in annual reports

2011 company reports

Northam’s 2011 Sustainable Development Report states the following regarding environmental compliance:

Northam manages it operations in line with the environmental legislation and regulations of, in particular, the Department of Mineral Resources (DMR) and the Department of Water Affairs (DWA). Consultation is also held with the regulatory authorities. The company did not receive any environmental fines or legal sanctions during the year under review.¹

The report states that the Zondereinde mine water use licence was still outstanding due to processing backlogs and that the mine was operating under an exemption from the DWA as a result.²

The report further states that the Zondereinde mine was awarded ISO 14001 certification for the first time in February 2011.³

The report states that were no significant environmental incidents at Zondereinde during the year, and no significant water spillages during the year.⁴

2012 company reports

Northam’s 2012 Sustainable Development Report states as follows:

Our 2012 Sustainability Report is deliberately focused and brief. At the heart of our sustainability thesis is the need for our business to survive, thrive and grow. Without that, there would be no impacts and benefits to report on, there would be no mitigating measures and, above all, there would be no value added. Reporting on compliance for the sake of it does not add value in our view. Reporting on material issues does – and this is what we have attempted to do in this report.⁵

With respect to environmental compliance, the report states:

All permitting and other records of regulatory compliance are in place at both our operations, following the granting of a Water Use Licence at Zondereinde in May 2012.⁶

The report states further:

Northam manages its operations in line with the environmental legislation and regulations of, in particular, the Department of Mineral Resources (DMR) and the Department of Water Affairs (DWA). Consultation is also held with the regulatory authorities. The company did not receive any environmental fines or legal sanctions during the year under review.⁷

The report states the following with regard to environmental incidents:

While a smelter run-out occurred at Zondereinde, the matte spill was contained within the building footprint and the matte will be recycled. There were therefore no significant environmental incidents or water spillages at Zondereinde during the year.⁸

2013 company reports

The 2013 Sustainable Development Report states as follows:

As a responsible corporate citizen, we are deeply conscious at Northam of compliance with legislation, regulations, reporting standards and norms, and we keep abreast of changes in the thinking around reporting. I alluded last year to the growing number of “sustainable” and “responsible” indices and guidelines we need to consider in our reporting and my concern about reporting for reporting’s sake.

This concern has not gone away and, indeed, the headwinds we encounter as a metals producer in South Africa have intensified to such a degree, that the very sustainability of our prime business activity is threatened. And without our business activities, we have to be sanguine about this, we will have no impact whatsoever, positive or negative for that matter.⁹

Under the heading “Legislation and Compliance”, the report states:

With regards to environmental management, Northam has adopted a precautionary approach, implicit within the regulations of NEMA and the company’s own environmental management systems (EMSs), which meet the necessary regulatory requirements and are in place at both Zondereinde and Booysendal. Northam’s approach to environmental management and compliance is also guided by the requirements of the DMR and the DWA. Consultation with these, as well as other regulatory authorities, is held on an on-going basis.¹⁰

The report states further:

The new Air Quality Control Act came into effect during F2013 and will have an impact on Northam’s emissions. The company intends to submit an application to the National Air Quality Advisory Committee for the postponement of compliance with the new emission requirements, as the construction of its new SO₂ treatment plant may require more time than was originally allocated.¹¹

Northam states that it did not receive any environmental fines or legal sanctions during the year under review.¹² The report states as follows with respect to Northam’s ISO14001 accreditation:

Northam has adopted the ISO14001 standard as the basis for its EMSs. The Zondereinde mine has been ISO14001-certified since February 2011. During the year under review, an ISO14001 audit was conducted, with three minor findings requiring attention:

• the improvement of incident reports in determining the causes and corrective actions of environmental issues;
• the improvement of documented objectives so that they can be measured against established targets; and
• the inclusion of the sewer plan on the aspect register.¹³

The report also referred to a public participation meeting held by Zondereinde in May 2013 at which the following issues were raised regarding Zondereinde’s integrated EMP:

• the sourcing of labour and the employment of local youths and disadvantaged individuals;
• the identification and preservation of environmentally sensitive areas that are impacted by Northam’s mining activities;
• the impact of mining on the health of neighbouring communities;
• the use of SO₂ that will result from the proposed Cansolv process intended to be introduced to absorb SO₂ flue gas;
• the use of filters for the SO₂ that is released into the atmosphere; and
• the enforcement of new regulations.¹⁴

The report states that four minor environmental incidents were reported at Zondereinde during the year, none of which incurred any fines.¹⁵

The report states that two environmental incidents were recorded at Booysendal during the year, one concerning the plant and mine pollution control dams and one involving the tailings dam. The pollution control dam incident is described as follows:

In September 2012, owing to unexpected heavy rains over a short period of time, both the plant pollution control dam and the mine pollution control dam overflowed into tributaries of the Dwarsrivier. This incident was reported in full and in writing to the DWA. The issue was swiftly resolved and no further communication regarding this incident has been received from the department. Booysendal management continues to monitor the surrounding fresh water, and the pollution control dams are controlled in order to maintain a healthy free board margin.¹⁶

The tailings dam incident is described as follows:

In April 2013, a drainpipe malfunction on the storage tailings facility (TSF) resulted in a relatively small quantity of tailings being released into the upper reaches of a watercourse in the area. The watercourse runs into the Der Brochen dam. Prompt and effective action quickly stemmed the flow and reduced the impact, and the DWA was immediately informed.  A number of interventions have been put into place to mitigate the impact and to avoid similar such events, including:

• two emergency waste rock embankments were constructed along the watercourse below the tailings dam;
• a weir across the rock bed of the watercourse has been constructed as a precautionary measure to protect the downstream environment; and
• manual rehabilitation was undertaken in the upper reaches of the stream, without causing any damage to the surrounding environment.

Booysendal has been informed that the DWA is satisfied with the immediate and long-term remedial and mitigation measures undertaken, and no fines were incurred as a result of this incident.¹⁷

The report states as follows with regard to dust emissions:

No external complaints have been received regarding dust emissions. The mine’s location in a valley surrounded by mountains means that dust does not disperse into the surrounding communities. Internal complaints, however, were received during the year, but most of these problem areas have since been paved.¹⁸

2014 company reports

Northam’s 2014 Integrated Annual Report states as follows:

Management at both operations engage regularly with regulatory authorities including the DMR and the Department of Water Affairs (DWA) and other relevant departments… Routine audits are undertaken to ensure compliance with the EIAs and EMPs. Northam has the requisite permits for Zondereinde and Booysendal in terms of new order mining rights and integrated water use licences.¹⁹

The report states further:

In compliance with the amendment to the NEMA: Air Quality Act, which came into effect in 2013, Northam has submitted an application for an atmospheric emission licence for the Zondereinde operations as well as a request for exemption from the requirement to reduce sulphur dioxide (SO₂) emissions by 2020, based on affordability and the historic dispersion of SO₂ at Zondereinde which has been significantly lower than the licensed limits.²⁰

The report states that Northam did not receive any significant fines or non-monetary sanctions for non-compliance with environmental laws and regulations in the reporting year.²¹

The report refers to the following environmental incident regarding waste water:

In January 2014, waste water (6 234m3) from the sewage treatment plant at Zondereinde was discharged directly into the Bierspruit, following above-average rainfall, as the evaporation dam and settling ponds were near full capacity due to fissure water being pumped and no consumption during the extended strike. Although this incident was reported to the DWA, the discharge volume was within the 1 000 000m3 provided for in section 7 of the water licences. As such no fine was issued and no administrative action was taken. No grievances regarding environmental impacts were received during the year.²²

The report states that Zondereinde recorded one reportable environmental incident in the year under review but did not incur a fine²³ and that no reportable environmental incidents were recorded at Booysendal during the year.

The report also states that no community or stakeholder complaints were received regarding dust emissions during the year.²⁴

2015 company reports

Northam’s 2015 Integrated Annual Report states as follows with regard to compliance:

Northam has the requisite permits for Zondereinde and Booysendal in terms of new order mining rights and integrated water use licences… In compliance with the amendment to the NEMA: Air Quality Act, which came into effect in 2013, Northam has submitted an application for an atmospheric emission licence for the Zondereinde operations as well as a request for exemption from the requirement to reduce sulphur dioxide (SO₂) emissions by 2020, based on affordability and the historic dispersion of SO₂ at Zondereinde which has been significantly lower than the licensed limits. The company is awaiting feedback from DEAT.²⁵

The report states that Northam did not receive any significant fines or non-monetary sanctions for non-compliance with environmental laws and regulations and that no grievances regarding environmental impacts were received during the year.²⁶

With regard to Northam’s environmental management systems, the report states as follows:

Northam has adopted the ISO14001 standard as the basis for its EMSs. The Zondereinde mine has been ISO14001-certified since 2011. A re-certification process conducted in February 2014, identified seven non-conformances. These were rectified and recertification was issued on 12 May 2014 until 2017.²⁷

The report states that Zondereinde recorded zero reportable environmental incidents in the year under review and nine reportable environmental incidents were recorded at Booysendal.²⁸

The report also states that subsequent to the granting of Zondereinde’s integrated water licence in 2012, the mine applied for a relaxation of certain standards and requirements.²⁹

2016 company reports

Northam’s 2016 Integrated Annual Report states as follows under the heading “Legislation and Compliance”:

At both Zondereinde and Booysendal, a precautionary environmental approach has been taken – aligned with NEMA and Northam’s own environmental management systems (EMSs).

Management at both operations engage regularly with regulatory authorities including the DMR and the Department of Water Affairs (DWA) and other relevant departments. New mining projects are subject to environmental impact assessments (EIAs) which involve comprehensive public participation and many studies to assess environmental aspects such as air, water, land, flora and fauna. These EIAs become part of the mines’ approved environmental management plans or EMPs. EMPs provide guidance in monitoring, addressing and mitigating environmental impacts. Routine audits are undertaken to ensure compliance with the EIAs and EMPs. Northam has the requisite permits for Zondereinde and Booysendal in terms of new order mining rights and integrated water use licences.³⁰

Northam confirms that Zondereinde received its atmospheric emission licence in February 2016:

In compliance with the amendment to the NEMA: Air Quality Act, which came into effect in 2013, Northam submitted an application for an Air Emission Licence for the Zondereinde operations as well as a request for exemption from the requirement to reduce sulphur dioxide (SO₂) emissions by 2020, based on affordability and the historic dispersion of SO₂ at Zondereinde which has been significantly lower than the licensed limits. The Department of Environmental Affairs and Tourism (DEAT) granted Northam an Air Emission License in February 2016.³¹

In relation to fines and complaints, the report states:

Northam did not receive any significant fines or non-monetary sanctions for non-compliance with environmental laws and regulations. No grievances regarding environmental impacts were received during the year.³²

With regard to Northam’s environmental management systems, the report states that:

Northam has adopted the ISO14001 standard as the basis for its EMSs. Zondereinde has been ISO14001-certified since 2011. Recertification was issued in 2014 until 2017.

At the Zondereinde metallurgical complex, the ISO standard was converted from ISO14001:2014 to ISO 14001:2015. The metallurgical plants will transition to ISO 14001: 2015 by 2017.

While the ISO14001 standard is taken into account in managing environmental issues at Booysendal, a formal ISO14001- compliant EMS is not yet in place at this operation.³³

The report states that “Zondereinde recorded zero reportable environmental incidents in the year under review”³⁴ and that “[a]ll environmental incidents were recorded at Booysendal during the year, one of which was reportable.”³⁵ The report also states that “[a] new reporting structure for environmental incidents was implemented in July 2015 which enhances the detail and accuracy of incident reporting”.³⁶ No further details are provided in respect of the one reportable incident at Booysendal or in respect of the new reporting structure for environmental incidents.