1. Western, Central and Eastern Basin LONG TERM SOLUTION TO AMD
Presentation to Parliament Portfolio Committee on Water and Environmental Affairs
on the
Western, Central and Eastern Basin
LONG TERM SOLUTION TO AMD
Presentation to Parliament on the Western, Central and Eastern Basin Long Term Solution to AMD
28 June 2011
Jaco Schoeman
28 June 2011

2. Looking Back 13 Years:
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
1998
Wits Basin de-watering stops
2007
WBEC, WUC sign Heads of Agreement
CBEC and EBEC formed
WUC raises R60 million to execute PFS/DFS/Pilots
WUC completed pilot plants, engineering designs
Western Basin flooding
2002
First AMD decants at BRI – Harmony implement
emergency measures
2008
WUC completes Pre-Feasibility Study
On going pilot work
2005
DWAF issues Directive enforcing co-operative agreement between mines to find solution to AMD
2009
WUC completes Definitive Feasibility Study
WUC submits Basic Information Document, engages
Public through Open House and Public Participation,
and submit s Final Scoping Report (All part of EIA)
Objections raised by DWA
High level engagement with DWA at DDG level
2006
WBEC formed
2006
DWAF provides mine with permission to establish Water Service Provider company
2010
Feb 2010 Industry submits first Long Term Self Sustainable Solution after further engagement
July 2010 Industry re-submits proposal based on discussions with DWA at Ministerial level on their preferences

3. DWAF Mandate to the Mines
Find a Long Term Solution for AMD – June 2005
Mines received legal advice
Not responsible for legacy issues
State owns significant portion due to ownerless / abandoned mines
“The Pragmatic Approach”
Establish Section 21 companies
Develop Regional Closure Strategy in line with DME
Contract WUC to develop solution (R65million)

4. Excerpt from DWA Letter of Recognition Issued in 2006 – Page 1
Note:
Specific reference is made to the following two highlighted paragraphs in the DWA letter :
“Re: Directive in terms of Section 19 (3) of the National Water Act of 1998, Act 36 of 1998, regarding the establishment of a Water Utilities Company (WUC) and clarity on the pricing structure to be imposed on the WUC”
“A. authorisation is required for the establishment of a Water Utilities Company (WUC) for the purpose of treating Acid Mine Drainage (AMD) which is decanting from Black Reef Include Shaft in the Tweelopies Spruit, and ...”

5. Excerpt of DWAF Letter of Recognition Page 2 …
Excerpt from DWA Letter of Recognition Issued in 2006 – Page 2
Excerpt of DWAF Letter of Recognition Page 2 …
Note: Specific reference to highlightedparagraphs
A. and 1.

6. Proposed Project : Regional Closure

7. Scope of the Proposal : Interim Solution

8. Approach to Development of a Solution
Industry directed by DWA in 2005 to develop a Long Term Solution
First Class Feasibility Study and Stakeholder Engagement
Definition of the scale of the AMD problem – qualities and quantities
Multiple Options considered
Detailed Feasibility Study undertaken
Risk Assessments
Extensive Regulator and Public engagement
Permitting advanced to approval of Final Scoping- E.I.A Report
WULA ready for submission
DWA was involved throughout this process in open forum
Offtake and structural issues still open

9. Financials Notes: Before mine or Govt contribution
ZARm
ZAR/m3
Capital expenditure
2.32
Civil
160.0
0.24
Mechanical
514.2
0.79
Pipes and valves
374.8
0.57
Electrical & Instrumentation
129.9
0.20
Preliminary & General
85.6
0.13
Other
52.2
0.08
Total Cost of Works
2.01
Contingency
170.5
0.26
Escalation
34.4
0.05
ZAR/m3
Operating costs
4.29
Plant costs
Chemicals
1.37
Power
0.48
Direct labour
0.40
Maintenance
0.59
Grootvlei costs
0.53
Royalties
0.08
Overheads
0.07
Management & Admin labour
0.26
Pumping
Collection
0.30
Distribution
0.20
Notes:
Before mine or Govt contribution
Plant Opex alone R3.10/m3
ZAR/m3
TOTAL REVENUE
8.14
Potable water
5.70
Grey water (R3.75)
1.44
Sulphuric acid
0.80
CO2 sales
0.20

10. Current Situation
Final Scoping Report (FSR) approval received on 14 Dec 2009
Environmental Impact Report (EIR) ready for submission
Includes 14 Specialist Studies
Definitive Feasibility Study has proven project viability
Project finance via private sector (R1,52 billion)
Regional Closure Strategy in line with DMR objectives
Industry has submitted formal proposals
11 November 2009 (original proposal)
13 July 2010 (amended proposal based on DWA comments and interactions with mines at DDG/DG/Ministerial level)
DWA has formally rejected these proposals(IMC report) and decided to engage TCTA as their preferred option

11. Key Attributes of our Proposal
Sound Governance - Public Private Partnership
Regional Scale Solution
Regional Impact - Vaal River salt load
Material to future Vaal strategies
Stageable
Economically viable and externally financeable
Significant BEE opportunity
“Blue Print” for other mining regions
Ready to go!

12. Conclusion We’ve done what you asked us . . .
Regional scale solution - regional significance
Sustainable
Economically viable & financeable
Structurally sound
WUC is the solution proposed by the mines in a response to the DWA directive in 2005
The Solution is commercially viable, which means neither the state nor the current companies, neither of who created this, have to fund it.