Validity of mine closure plans approved prior to the introduction of the One Environmental System

May 1st, 2024
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Given the need to phase out fossil fuel based mining activities due to climate change related commitments the clash between the Department of Mineral Resources and Energy (DMRE) and the mining right holders regarding closure obligations and the procurement of closure certificates associated therewith will continue to rise.

On 4 September 2023, the High Court of South Africa, Gauteng Division, Pretoria delivered a landmark decision in the De Beers Consolidated Mines (Pty) Ltd v Regional Manager, Limpopo: The Department of Mineral Resources and Energy and Others (GP) (unreported case no 66559/2020, 8-9-2023) (Khumalo J) where it was held that the DMRE must decide on an internal appeal submitted by De Beers Consolidated Mines (Pty) Ltd (DBCM) and that such an appeal must be adjudicated in terms of s 43 of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA), as amended (post-introduction of the One Environmental System (OES)) and not in terms of the legal regime that persisted when the closure certificate application was submitted.

Factual background

By way of background, DBCM was, in terms of s 9(1), read with s 9(3)(e), of the then Minerals Act 50 of 1991 (the Minerals Act), the holder of a mining licence for DBCM’s Oaks Mine. Accordingly, DBCM adopted and applied for an amendment of its initial Environmental Management Programme (EMPR). The amended EMPR contained closure steps and rehabilitation measures that stipulated ‘the mine pit to remain open’, which was approved by the DMRE in accordance with s 39 of the Minerals Act.

DBCM operated the mine for ten years between 1998 to 2008 when operations stopped, and the mining license lapsed as same was not converted into the new order right in terms of the MPRDA. For this reason, DBCM submitted that the amended EMPR remained valid and enforceable in accordance with item 10 of the transitional arrangements in sch II of the MPRDA.

On 3 November 2009, DBCM applied to the DMRE for a closure certificate for the mine in terms of s 43(3) of the MPRDA (prior to commencement of the OES) and ‘attached a closure plan which provided for safety, stability and sustainable land and vegetation as well as waste management measures … to the open pit mine. The closure plan provided for post-closure maintenance and control of the open pit, but stated that upon closure of the mine, the pit was to remain open’ as approved in the amended EMPR (Centre for Environmental Rights (CER) (https://cer.org.za, accessed 2-4-2024)). Accordingly, DBCM argued that its amended EMPR was approved unconditionally, as a result it had designed its mining activities and planned its operations on the basis that the pit would remain open.

The issues

In April 2011, ‘the DMRE conducted a site inspection and assessed the closure plan’ submitted by DBCM and the need ‘to address environmental flaws and findings before a closure certificate can be issued’ (CER (op cit)). The DMRE findings were based on the following 

  • the open pit will pose a high risk to scavengers and illegal mining;
  • the DMRE sought a practical plan for future land uses that would not encourage illegal mining and scavenging;
  • all relevant stakeholders must have been consulted with for future land use, including the principal inspector of mines; and
  • the DMRE will not issue any closure certificate until all the requirements of relevant legislation pertaining to closure had been satisfied.

On 10 November 2012, ‘the DMRE decided not to process the application for the closure certificate unless’ DBCM complied with the abovementioned findings (CER (op cit)).

On 26 February 2016, the DMRE wrote to DBCM notifying them of the condition that the mine closure application would only be processed once they had addressed the conditions as per the DMRE letter dated 10 November 2012.

On 10 November 2017, DBCM requested the DMRE to agree to the approved amended EMPR and to provide a closure certificate in terms of s 43 of the MPRDA. Further, DBCM ‘informed the DMRE that the mine property had been sold to a game farm and that as part of the decommissioning and closure process that took place in 2009, various consultations took place with the DMRE and other interested and affected parties’ (CER (op cit)).

On 23 October 2018, the DMRE rejected DBCM’s ‘closure application and closure plan on the basis that it wanted the pit closed and rehabilitated’ (CER (op cit)). Further, ‘it called on the Mine to submit a new Closure Plan that will indicate how the pit will be rehabilitated and include proof of results of [DBCM’s and the DMRE] consultations with interested affected parties … prior to the submission of a revised Closure Plan’ (CER (op cit)). On 23 April 2019, the Regional Manager of the DMRE ‘wrote a memorandum to the DMRE’s Chief Director: Legal Service maintaining that the pit at the [mine] must be backfilled based on health and safety reasons’ (CER (op cit)).

On 16 October 2019, DBCM ‘again submitted a closure application and alleged that the … mine had been successfully rehabilitated’ in accordance with its amended EMPR (CER (op cit)). Accordingly, DBCM ‘argued that the DMRE had unlawfully delayed in issuing it with the closure certificate for over a decade and stated that the DMRE’s condition to backfill the pit was procedurally unfair and irrational’ (CER (op cit)). DBCM ‘also argued that filling the pit would be impractical and irrational from an environmental, practical, technical and financial perspective’ (CER (op cit)).

In 2020, DBCM sought the outcome of its closure certificate application and provided evidence to DMRE that ‘its rehabilitation efforts over the last decade had been successful mentioning that no wall failures were recorded, no illegal mining has taken place due to the remote location, a blasting over of the remaining kimberlite took place, strict access control measures had been put in place, a 2,4 cm fence and a 700mm safety berm that demarcates the pit area continued to restrict access to the pit. [DBCM] reiterated that any demand by DMRE to backfill the open pit was thus unreasonable and irrational’ (CER (op cit)).

The important argument is …

According to the DBCM, ‘the DMRE had failed to make a decision on its application for closure and that this application should be decided in terms of section 43 of the MPRDA and its Regulations as they stood when the [amended EMPR] was approved in 2004. The mine argued that the amendments [introduced] to section 43 [of the MPRDA] as well as to NEMA and its regulations’ had no legal bearing on pending closure applications submitted prior thereto (CER (op cit)).

Contrary to the above, ‘the DMRE informed [DBCM] that its closure application would remain pending until a revised closure plan has been submitted, which must include an explanation of how the open pit would be backfilled’ (CER (op cit)).

‘Consequently, the mine lodged an internal appeal in July 2020 against the DMRE’s refusal to process the closure certificate and its failure to take a decision on the closure application’ (CER (op cit)). To date, ‘the DMRE is yet to make a decision, and the [internal] appeal remains open’ (CER (op cit)).

Legal implications of the De Beers judgment

In principle, any EMPR approved in terms of the Minerals Act remains valid despite the introduction of the OES on 8 December 2014. This position was confirmed in the case of Global Environmental Trust and Others v Tendele Coal Mining (Pty) Ltd and Others (Centre for Environmental Rights and others as Amici Curiae) [2021] 2 All SA 1 (SCA) and in terms of the NEMA regulations. Inevitably, any closure plans contained in those approved EMPRs remain valid and binding on mining right holders despite the introduction of the OES.

Contrary to the aforementioned principle, the net effect of the De Beers judgment is that any closure plan approved prior to the introduction of the OES can be disregarded by the DMRE. Accordingly, this undermines the transitional arrangement set out in the OES and imposes risks on pending closure certificate applications which are subject to mining transactions. In the case of mining transactions, the De Beers case opens a can of worms for any potential buyer in a mining transaction to seek a price reduction based on any pending closure certificate applications.

Madoda Mandla Aseza Koti LLB (UWC) PG Dip Environmental Law (Wits) is a Mining and Environmental Law Consultant at Gwina Attorneys in Johannesburg.

This article was first published in De Rebus in 2024 (May) DR 18.

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