1 PROGRESS REPORT ON THE MANAGEMENT OF ACID MINE DRAINAGE (AMD) IN THE WITWATERSRAND MINING REGION Portfolio Committee: Water and Environment Cape Town, September 2011

2 Content of Presentation 1.Background / Introduction 2.Feedback on actions requested by the Chair of PC: W&E 3.Update on mine water status per Basin 4.Recent Developments and Progress 5.Risk Management 6.Conclusion / The Way Forward

3 1. Background / Introduction Inter-Ministerial Committee (IMC) on AMD first convened on 01 Sep 2011 “Mine Water Management in the Witwatersrand Gold Fields with Special Emphasis on Acid Mine Drainage” (IMC AMD Report) approved by Cabinet on 9 Feb 2011 DWA tasked to implement certain recommendations in IMC AMD Report TCTA appointed as Implementing Agent on 6 Apr 2011 Subsequent progress reported to PC: W&E on Jun 2011

2. Feedback on actions (1) No.ActionStatus 1Furnish PC with copies of all directives issued to minesDone 2 DWA to provide proof of engagement with I&APs in mine water forums (i.e. list of invitees must reflect municipalities, Provincial Government, farmers and community members who live in affected areas) Done 3 Report to the Committee every three months on the relationship between mines, municipalities and DWA  Mines: continuous engagement on mine water management  Municipalities: engagements with Ekurhuleni and City Jhb concluded. Engagements with Western Basin municipalities will commence shortly Done / in process 4 The DWA is responsible to provide clean water. How will the DWA recover costs incurred when treating mine water?  To be addressed in Feasibility Study for long-term mine water management In process 5 What is the legal water quality standard for mines to discharge mine water and which law is used to issue the licenses?  Authorisations (WULs) issued / to be issued in terms of NWA and WQOs Done / in process

No.ActionStatus 6 Review Modder East’s 2006 groundwater specialist study and revert to PC Done 7 How many mines has Government assisted to pump/treat mine water?  Grootvlei Mine and ERPM Done 8 How much treated mine water can be used by the mines?  Potential users in WB identified In process 9 DWA response to the WUC Feasibility Study (2009)  Reply to WUC awaiting signature In process 2. Feedback on actions (2)

No.ActionStatus 10 Proposal by the WB mines following a directive issued by DWA to address AMD was rejected  Due to legacy issues, the IMC on AMD recommended that the State must take the lead in addressing AMD challenges in the Witwatersrand Done 11 Is it acceptable to allow Gold One (Modder East) to flood?  Gold One (Modder East) is not connected to the Eastern Basin so if this operation is flooded, it will not impact on the Eastern Basin Done 12 DWA has issued directives of high standing and must continue this process  Directives are used routinely in ensuring mine water management Continuous 2. Feedback on actions (3)

7 3. Updated Mine Water Status in the Witwatersrand Mining Basins (Eastern, Central and Western Basins)

8 Current mine water status per Basin Basin Mine water level (mbs) ECL (mbs)Est. date to ECL Eastern628306Dec 2013 Central415174Aug 2012 – Mar 2013 WesternAt surface160 ECL currently breached resulting in surface decant

ECL = 174 mbs Water Level at ERPM (SWV) Shaft – CENTRAL BASIN

Water Level at #3 Shaft – EASTERN BASIN ECL = 306 mbs

11 4. Recent Developments and Progress TCTA concluded Due Diligence Review for all 3 Basins (7 Jul 2011) Short-term treatment solution for each Basin conceptualized Immediate (emergency) solution approved for the Western Basin. Planned for commissioning by Nov - Dec 2011 and will improve discharge of treated mine water from 12 ML/day to 32 ML/day Short-term solution for Western Basin at advanced stage of design. Immediate (emergency) solution and short-term solution will achieve combined output of up to 60 ML/day until ECL attained Surface and groundwater monitoring systems in place with further improvements / expansion planned to support short-term interventions Potential users for treated mine water identified in Western Basin DWA and TCTA have met with liquidators to understand the situation at the Grootvlei Mine (ex Pamodzi Gold) in the Eastern Basin BA and EIA processes have commenced Engagement with I & APs have commenced

12 5. Risk Management (a) Risk / ChallengeResponse Budget Request for funding submitted to NT R 924 million CAPEX required Private sector exploiting potential solutions (“money-making”) Regulators to identify and manage according to legislation/policies TimeframesTCTA formulated implementation plan with realistic target dates Reputational riskMedia statements to keep public and key stakeholders informed Identification of suitable entity to operate and maintain infrastructure Rand Water will be appointed by a Ministerial directive to perform operations and maintenance of short-term solutions Lack of reliable monitoring data Monitoring Committee to ensure strategic monitoring programmes to support interventions in all Basins

13 5. Risk Management (b) Risk / ChallengeResponse Regulatory matters (e.g. environmental authorisations/EIAs/water uses for implementing proposed solutions) Authorities Task Team established encompassing relevant Regulators to review and expedite required authorisations Mining industry distancing themselves from liabilities DMR to ensure Regional Mine Closure Strategies are active Mines to revise EMPs to address environmental liability DWA to consider invoking Sections 19 and 20 of the NWA Impact of neutralised mine water discharge into water courses Impact similar to qualities discharged during periods of active mining Releases from Vaal Dam to ensure acceptable water quality By 2014, salt loading will be removed (Vaal Reconciliation Strategy)

14 6. Conclusion / The Way Forward ToE  Identify information gaps to support long-term solution  Expand surface- and ground-water monitoring  Review TCTA short-term recommendations TCTA  Implement immediate (emergency) engineering solution in Western Basin  Expropriate land and appoint service providers  Consult I & APs Inter-Governmental Task Team  DWA advertised bid for Feasibility Study (long-term use of Wits mine water) & concluded mandatory Briefing Session with potential bidders. Bid closed on 01 Sep 2011 and PSP to be appointed by 30 Sep 2011  DMR to support with access to mine shafts for monitoring, pumping and water treatment infrastructure (Mine Health and Safety)  Ensure proper engagement with Provincial and Local Government  RW to be appointed for operations and maintenance of short-term solutions  Report to the IMC and / Cabinet