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«A CASE STUDY Prepared by: Victor Munnik (Mvula Trust) with Geraldine Hochmann (Mvula Trust), Mathews Hlabane (SA Green Revolutionary Council) and ...»

-- [ Page 1 ] --

The Social and Environmental Consequences

of

Coal Mining in South Africa

A CASE STUDY

Prepared by:

Victor Munnik (Mvula Trust)

with Geraldine Hochmann (Mvula Trust), Mathews Hlabane (SA Green Revolutionary

Council) and Stephen Law (Environmental Monitoring Group)

January 2010

A joint initiative of Environmental Monitoring Group, Cape Town, South

Africa and Both ENDs, Amsterdam, The Netherlands Copyright : Environmental Monitoring Group Contents Acronyms

Introduction

Coal mining in South Africa

South African coal export and Dutch coal import

The politics of coal mining

Coal dynamic on the Mpumalanga Highveld

Legislation and regulation of coal mines

Water quality

Air pollution from coal mining and coal use

Climate change and the political importance of coal mining

Coal miners’ health and labour issues

Biodiversity effects of current coal mine expansion

Community Case Study

Community response

Democracy, regulation, rule of law

Conclusions: the externalities

Environmental externalities

Recommendations

Endnotes

Page 1 of 24 Acronyms AMD Acid mine drainage ANC African National Congress BEE Black Economic Empowerment D&O Mines Derelict and Abandoned Mines DEAT Department of Environmental Affairs and Tourism DME Department of Minerals and Energy DWAF Department of Water Affairs and Forestry EIA Environmental Impact Assessment EMP Environmental Management Programmes EMPR Environmental Management Programme Report HIV/Aids Human immunodeficiency virus/Acquired immune deficiency syndrome LTMS Long Term Mitigation Scenarios MMSD, Mining, Minerals and Sustainable Development MPRDA Minerals and Petroleum Resources Development Act Mt/a million tons per year MW Megawatt NEDLAC National Economic Development and Labour Council NEMA National Environmental Management Act NGO Non government organisation NWA National Water Act pH a measure of the acidity (low pH) or basicity (high pH) of a solution PM particulate matter (breathable) RBCT Richards Bay Coal Terminal SA South Africa WESSA Wildlife and Environment Society of SA Page 2 of 24 Introduction This case study focuses on the costs of the environmental and social effects of coal mining in South Africa, undertaken for export to the Netherlands. Coal mining imposes many external costs on its surroundings and the people who live in it. Some of these can be quantified by estimates, others are difficult to estimate. Coal mining is by nature disturbing and destructive of the environment. Open cast mining removes large volumes of soil and rock overburden to get to the workable coal seams, and destroys regional aquifers. Mining produces large mountains of solid waste. Coal heaps are prone to spontaneous combustion. Leachate from waste heaps are often acidic, adding to the general and large scale acid mine drainage impact and interferes with underground and surface water. Mining also has serious social consequences: on the movement of people, on people’s health and the environments they live in.

Page 3 of 24 The case study looks at air pollution, water quality issues, biodiversity effects, climate change effects, community responses, mine companies’ engagement with these responses, and the issues of coal miners. It is based on desk top research, interviews, and interactions with affected communities and activists in the Witbank-MiddelburgErmelo area, South Africa’s most intensely worked coalfield. A number of coal mine managers, coal companies and the Chamber of Mines were approached, but chose not to respond.

Mine publicists generally point to the positive impacts of mining, like job creation and spin-off businesses. It is a sobering thought that only 41% of the income from economic activities in the area, chief of which is coal mining, remains in the area1.

What remains behind is land that is mostly not rehabilitated for agricultural use, although some is, rivers like the Olifants polluted with acid mine drainage, areas of soil subsidence and underground fires, air pollution from dust and the associated effects of coal fired power stations with inadequate pollution control, and coal miners suffering the effects of silicosis, tuberculosis and other occupational diseases.

Coal mining in South Africa It was mining that gave South Africa its current shape through processes from the 1880s to 1910. Gold mining took centre stage early, both because of its importance for the British and thus global monetary system and the profits to be made. Cheap black labour, achieved via the migrant labour system (in which mineworkers left their families behind and lived in all male, strictly controlled compounds), required political control. Early conflict between gold companies and Paul Kruger’s Transvaal Republic about access to water, railroad transport and dynamite concessions, led to the Anglo Boer War and the consolidation of four independent provinces into a single South African state in 1910. At the core of this state is a minerals energy complex2, centred on the South African Chamber of Mines, which was formed in 1887, with its object “the promotion and protection of the mining interest”3. In 1980, the Department of Minerals and Energy (DME) was formed with the express mandate to promote mining.





Gold mining had to deal with deep, low grade ore requiring large capital and cheap labour to keep costs down. The concentration of capital in gold mining gave the South African economy its basic structure organized around six dominant groupings of capital which extend into manufacture, banking and retail, but have at their basis a historic investment in mining.

Coal mining played a supportive role as provider of energy to the growing gold mining industry and indeed, many collieries were historically and are today owned by gold mining companies. To these coal mine owners it was more important to keep the costs of their own energy inputs low, than to profit from coal mining itself4. The coal price remained very low until the mid 1970s, when export opportunities opened up through a deep terminal in Richards Bay, and Japanese long term contracts. The low coal price was accompanied by harsh working conditions and low wages for African workers, a tendency to mine only the best coal (“picking out the eyes” in mining jargon) instead of mining the whole seam, and a disregard for environmental impacts.

Page 4 of 24 According to official statistics5 (DME (Department of Minerals and Energy), around 77 percent of South Africa's primary energy needs are provided by coal. Coal is used for electricity generation, the production of synthetic fuel by Sasol (itself a very dirty process) and used in industry and homes. Around 28 percent of South Africa's production is exported, mainly through the Richards Bay Coal Terminal, making South Africa the fourth-largest coal exporting country in the world.

South Africa’s coal reserves lie in 18 coal fields. Historically the Vaal coalfields were the first to be intensively exploited, hosting a number of coal fired power stations as well as steel and heavy industry. The largest coalfields are found in a continuous expanse from Mpumalanga into KwazuluNatal (see map), where seams are between 15 and 100 metres deep, and around seven metres thick, but very variable6. More recently, coalfields to the North (Waterberg and Soutpansberg) have been opened up.

South Africa has 64 collieries, ranging from among the largest in the world to smallscale producers. A handful of large-scale producers supply coal primarily to electricity and synthetic fuel producers. About 51 percent of South African coal mining is done underground and about 49 percent is produced by open-cast methods.

The coal-mining industry is highly concentrated with five companies accounting for 85 percent of saleable coal production. These companies are Ingwe Collieries Limited, a BHP Billiton subsidiary; Anglo Coal; Sasol; Eyesizwe and Kumba Resources. Xstrata is an important exporter, as the following section shows.

South African coal export and Dutch coal import Coal is exported from South Africa through the Richards Bay Coal Terminal (RBCT).

The terminal was opened in April 1976, with an export capacity of 12 million tons of coal per year (12 Mt/a). Over the years, export capacity has grown to 76 Mt/a in 2008.

The last phase in capacity expansion was finalized in 2009: RBCT now has an official export capacity of 91 Mt/a7. Several mining operations hold shares in the RBCT, and their percentage shareholding and export allocations, are listed Table 1 (based on the 2008 export capacity of 72 Mt/a).

–  –  –

Page 5 of 24 Out of the extra capacity of 19 Mt/a that has become available with the latest expansion, 4 Mt/a is earmarked for Black Emerging Miners, 6 Mt/a is allocated to South Dunes Coal Terminal (which represents a number of BEE exporters) and 9 Mt/a has been allocated to applicants: Arm Coal (3.2 Mt/a), Exxaro Coal (2.5 Mt/a), Mmakau Mining (0.35 Mt/a), Tumelo Coal (0.60 Mt/a), Umcebo Mining (1.00 Mt/a), Yomhlaba (0.50 Mt/a) and two commercial agreements (0.85 Mt/a together).

The Netherlands imports 17% of all coal used in Europe (40.1 Mt in 2006), of which the Dutch use 8.5 Mt/a for electricity generation9. The remainder of the imported coal is distributed to other European countries. The Netherlands is considering building more coal-fired power stations, which would add another 11.5 Mt/a to their coal import requirements (there are no sources of coal in the Netherlands). There are no official figures of the country of origin of the coal that the Netherlands uses for electricity generation, but figures show that of all imports into the Netherlands, 37% of the coal comes from South Africa. Applying this percentage directly to the usage of coal by the Netherlands, this would come down to 3.25 Mt/a of coal being mined in South Africa. This amount could possibly increase to 7.4 Mt/a with the contemplated building of additional coal-fired power stations. 3.25 Mt/a represents 3.6% of South Africa’s total coal exports per year.

The politics of coal mining The dominance of coal interests has imposed a logic on the political economy which is played out in the form of weak regulation and the dependence of local and provincial government on coal interests. Under apartheid, coal mining provided an avenue for advancing Afrikaner capital10, and is now the focus of a programme for building a black middle class through participation in coal mining.

Coal mining also has a history of cheap labour, and confrontation with organized labour11. Mine owners in general, like other business and industry, made a limited presentation to the Truth and Reconciliation Commission, but did not come near to accepting responsibility for, amongst others, miners’ deaths and ongoing illnesses12.

South Africa is a politically sophisticated country and both mine owners and the communities they work in, have developed an understanding of and an interest in mining and its externalities. SA mine owners have played a prominent part in the MMSD, mining council and related initiatives, and have developed sophisticated environmental management, reporting and communication systems, programmes of corporate social responsibility and community outreach. Mining has long been a closed book for researchers, and research information circulated in small circles aimed at immediate practical application and amelioration, under close scrutiny of the mines and with their co-operation. This literature was created under a commitment to guard the confidentiality of the information. In recent years, more information has flowed from researchers into the public realm beyond the narrow circles of scientists

beholden to shareholders, much of it concerning mining externalities and legacy costs:

including the uranium contamination of water resources and acid mine drainage13.

Government has shown increased concern about air pollution, with the declaration of three air pollution priority areas. All three are the result of fossil fuel pollution. The Page 6 of 24 Eastern Highveld is the third air quality pollution priority area to be declared. It means proper monitoring of air quality plus a multistakeholder development of plans to deal with future air quality system. Up to now pollution monitoring has consisted largely of self-reporting by state owned electricity monopoly Eskom (with its electricity overwhelmingly from coal fired power stations) and Sasol, the coal based liquid fuel and chemicals from coal business.

As a stakeholder politics has developed, communities and activists have become more outspoken, and mines more guarded in their relationships with critical researchers14.

The popular media – as opposed to a generally uncritical business media – have taken the side of communities and, as the mines see it “sensationalized the issue”. Mines also accuse activists of not having a scientific basis for their accusations – while ironically themselves guarding the scientific information very closely! Government departments – mineral and energy, water affairs and local government – operate with progressive legislation, but constrained capacity for monitoring and acting against mining and other industrial polluters. However, pressure is mounting to act because SA water resources are fully committed, and future wellbeing of the nation depends crucially on guarding the water quality. While legislation is in place for a stakeholder driven catchment management system, this has been slow to take effect.

Coal dynamic on the Mpumalanga Highveld The largest number of collieries – 22 – are concentrated around Witbank, now

renamed Emalahleni (place of coal). The export mines are15:

• Anglo: Bank, Goedehoop, Greenside, Kleinkopje, Landau.

• BHP Billiton: Koornfontein, Optimum, Eikeboom, Douglas, Middelburg.

• Eyesizwe – Glisa, New Clydesdale.

• Xstrata: Phoenix, South Witbank, Tavistock, Arthur Taylor, Boschmans, Waterpan, Witcons, Goedgevonden, Spitzkop and Tselentis (Bothasrust).

This area was taken as the focus of field work and as a community case study.



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