The South Africa mining industry is changing

2017 was another tempestuous year for the South African Mining and Natural Resources Sector. The sector was disrupted by a range of changes and uncertainties, including the publication of the Reviewed Broad-Based Black Economic Empowerment Charter for the South African Mining and Minerals Industry, 2016 on 15 June 2017 (Mining Charter 3); the proposed moratorium on applications for new mining and prospecting rights, mining and prospecting right renewals and mining and prospecting right transfers; mine closures under instructions issued in terms of section 54 of the Mine Health and Safety Act (29 of 1996) (MHSA); the ever-increasing involvement of stakeholders and environmental activists; and regulatory and policy uncertainty. 

While the South African Mining and Natural Resources Sector is facing constant turmoil, it cannot ignore the reality of the fourth industrial revolution, more commonly referred to as Industry 4.0: the role of the Internet of Things (IoT) and the impact of Artificial Intelligence (AI). There is no doubt that the future of mining will include driverless vehicles, mines run by cellular networks, and automation technology. These developments will require innovation, and re-consideration of legal principles, with a strong emphasis on data capturing, data storage, analysis, and of course, one of the greatest concerns, privacy. 

But for now, the emphasis is also on getting the basics right. The South African Mining and Natural Resources Sector is heavily regulated, and there are a range of Environmental Laws applicable to mining. While much of the day-to-day interpretation and application of South Africa's Environmental Laws are left to the regulators such as the Department of Environmental Affairs, the Department of Water and Sanitation, and the Air Quality Manager, at municipal level, the South African courts are occasionally called on to interpret key provisions. One of the more prominent judgments was handed down in March 2017, by the High Court of South Africa, Gauteng Division, Pretoria in the matter of Earthlife Africa Johannesburg v Minister of Environmental Affairs and Others (65662/16) [2017] ZAGPPHC58: 2ALL SA519 (GP) (8 March 2017). This judgment is important not only because it interprets requirements of the applicable Environmental Laws but also because it touches on two very sensitive topics, namely global warming and South Africa's current reliance on coal-fired production of electricity. 

Earthlife Africa applied to court to set aside a decision of the Department of Environmental Affairs to grant an environmental authorisation to Thabametsi Power, the company that had been selected to build a coal-fired power station in the Limpopo Province. If successful, and the environmental authorisation was set aside, Thabametsi Power would need to apply for a new environmental authorisation, without any guarantee that it would be granted. 

Earthlife Africa's argument was essentially that the Minister of Environmental Affairs had a legal obligation to consider the global warming impacts of the project and, if it was found that there was a legal obligation, the Minister of Environmental Affairs had not properly considered global warming when deciding whether or not to grant the environmental authorisation.

The court decided in Earthlife Africa's favour, and set aside the decision to grant the environmental authorisation. This judgment interprets the provisions of the National Environmental Management Act 107 of 1998 (NEMA) and confirms that all relevant factors associated with a potential project must be taken into account in determining whether or not an environmental authorisation should be granted. While section 24O of NEMA does not list all relevant factors, the judgment reconfirms that factors set out in sections such as section 24O are non-exhaustive, and decision-makers are required to consider all relevant factors, whether listed or not. This principle has also been highlighted in the debates surrounding the Integrated Resource Plan for electricity, and the publication, on 10 November 2017, of the amended schedule II to the Electricity Regulation Act 4 of 2006 (ERA) which has increased the number of activities relating to electricity generation that do not require a licence in terms of the ERA, but which must be registered with the regulator. While the list of activities has been increased, the requirement to register with the regulator provides the regulator with an opportunity to intervene and set terms and conditions under which electricity generation projects are implemented. This includes those that are being implemented on an increasing basis by businesses which are attempting to reduce reliance on Eskom generation, and are focusing strongly on generation of electricity from waste produced at the various operations. 

It is not only the courts that are intervening in the interpretation and application of the Environmental Laws. Historically, some entities that have required environmental authorisations have applied the old adage "it is easier to ask for forgiveness than for permission", and have applied for rectification under the provisions of section 24G of NEMA, where the environmental authorisations had not been applied for and/or had not been granted, before the commencement of activities that require environmental authorisations under section 24. In addition to the administrative fine that must be paid in terms of section 24G before the rectification application is processed, section 24G of NEMA does not exclude the possibility of criminal proceedings being instituted against the applicant. Section 24F of NEMA provides that no person may commence a listed activity without the requisite environmental authorisation. In terms of section 49A, a person who breaches this obligation is guilty of an offence. 

Historically, there have been a number of instances when criminal prosecution has not been initiated against the applicant that has applied for rectification under section 24G of NEMA. Recently, an application was made with the stated purpose of initiating private prosecutions where the state failed to do so, under the provisions of the Promotion of Access to Information Act 2 of 2002. The applicant was provided with a schedule setting out all applications made under section 24G of NEMA. While there are several challenges that face any person initiating a private prosecution, including the provisions of section 33 of NEMA itself, the threat is enough to make applicants nervous. 

2016/2017 also saw mining companies challenging the Department of Mineral Resources' instructions and decisions in the South African courts. One of the matters which was commented on extensively during 2017 was that involving AngloGold Ashanti Limited, the Acting Chief Inspector of Mines, the relevant Principal Inspector, and the Inspector who issued a section 54 Instruction in terms of the MHSA. In late 2016, the Labour Court handed down a judgment in favour of AngloGold Ashanti, which criticised the Mine Health and Safety Inspectorate and the manner in which the closure notices were issued. 

The Labour Court held, in relation to stoppage notices, such as section 54 Instructions,that "one ought not to use a sledgehammer to crack a nut". The AngloGold Ashanti judgment provided useful guidance to all stakeholders in the industry. The judgment also urged all stakeholders to consider their positions carefully, and to engage meaningfully to ensure the ultimate object of zero harm. 

The Labour Court was also asked to weigh in on another sensitive topic – that of pregnant women in mining, in the case of Tshegofatso Manyetsa and New Kleinfontein Gold Mine Proprietary Limited (Case No JS2006/14). The court, which handed down its judgment on 7 November 2017, acknowledged that South Africa has come a long way in advancing women's rights in various pieces of progressive legislation, including their protection in the world of work. The court reiterated that in giving effect to the constitutional right to equality, the primary focus of these pieces of legislation is to protect women and pregnant employees from unfavourable treatment in the workplace. The judgment summarises the personal and horrific financial situation of the applicant, despite legislative protection for pregnant women. Suitable alternative employment could not be found for the applicant and she was suspended without pay. The judgment highlights the gaps in legislation which is meant to protect pregnant employees. Judge Edwin Tlhotlhalemaje found, that because of these shortcomings, the mining company had not breached its policies and it had not acted unlawfully. The court's decision not to award costs against the applicant is no doubt of little consolation to the applicant, and it is clear that an extensive amount of work is necessary to address shortcomings in legislation which aims to protect women in the mining industry. 

Industry 4.0, the Internet of Things and Artificial Intelligence is also a reality that should be embraced to improve efficiencies, while balancing a critical component of the South African mining industry, namely its employees, through the implementation of appropriate programmes of re-skilling, implementation of open source/access infrastructure which can be shared by sectors such as the agriculture sector, and buy-in from key stakeholders in the Mining and Natural Resources sector. 

South Africa has been acknowledged for its "can do" approach, and many innovations developed in South Africa have been successfully exported abroad. It is critical for leaders who embrace the changes that are so necessary for the success of South Africa to come forward. 


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