Cape Town – The National Treasury is looking at setting up a private-public partnership (PPP) and considering implementing an environmental levy to fund the rehabilitation of groundwater affected by acid mine drainage.
Alongside with these interventions, Treasury will also craft a long-term funding model to tackle the problem.
Acid mine drainage contaminates groundwater and leads to increased seismic activity, among other things.
Briefing the National Assembly’s parliamentary committee on water affairs, the National Treasury’s Director of Public Finance, Maselaganye Matji, said a PPP could include the Departments of Mineral Resources and Water Affairs, adding that businesses, including mines, are interested in funding a long-term solution.
Matji said to date, private institutions had committed R78 million, the Industrial Development Corporation (IDC) R5 million and the Development Bank of Southern Africa (DBSA) a further R10 million to tackle long-term acid mine drainage.
The idea was that what ever income was generated by the public-private partnership would be used to fund necessary water and technical infrastructure, he said.
The PPP would treat polluted underground water at Grootvlei Mine and the Witwatersrand Basin, as well as develop and fund a long-term solution to tackling acid-mine drainage.
Outside of the Witwatersrand, acid mine drainage has been reported from a number of other areas in South Africa as well, including coalfields in Mpumalanga and KwaZulu-Natal and the Northern Cape’s O’Kiep copper district.
In his presentation, Matji said his department’s idea was to fund the clean up of acid-mine drainage through the enforcement of the National Water Act and other acts and measures.
The various measures proposed include: an acid mine drainage levy on mines; a penalty for water sources levied on industries and water treatment works; a penalty for water pollution from non-point sources such as agriculture; fines on general environmental pollution and penalties levied on businesses and organisations for non-compliance at various levels.
The idea of an environmental levy and a management process to mitigate long-term effects of acid mine drainage was mooted in the inter-ministerial committee’s report on acid mine drainage, released in December last year.
Matji said National Treasury had also recently met with the US Trade and Development Agency to discuss the possibly of the agency financing a study and tour of the US by South African officials.
Such a tour would help officials to gain insight into how the US’ “super fund” tackles environmental management, while providing for an opportunity for South Africa to assess various technical resources in the US.
The committee’s chairman, Johnny de Lange, welcomed the idea of a PPP, but cautioned that it was necessary for the three departments, parastatals and the private sector, to work together to create an institutional arrangement that could award clear responsibilities to each partner.
In line with the findings of the inter-ministerial commission’s report, de Lange also cautioned that the government’s current approach to treating acid mine drainage by diluting polluted rivers with fresh water was problematic, as the high salt content could still kill a river even while bringing the problem of acid mine drainage under control.
The government’s current strategy is to only begin the more expensive route of desalination in 2014.
De Lange said neutralisation, coupled with a private-public partnership, was a solution if the treated water could be sold to and used by mines and industries, rather than being channelled back into the river.
The government has allocated a total of R553 million over the next three years to treat the acid mine drainage problem.
The Department of Mineral Resources has allocated R328 million to combat acid mine drainage (which includes R200 million in transfers to the Council for Geo-Science and Mintek) and R225 million to the Department of Water Affairs.
The Department of Water Affairs’ R225 million allocation includes R220 million to fund a short-term solution and R5 million to develop a long-term strategy to deal with acid mine drainage and to develop a funding model.
The Department of Water Affairs will also lean on experts from the Trans-Caledon Tunnel Authority for technical assistance and financial resources.
De Lange said a long-term strategy to tackle acid mine drainage is expected to be released next month after the conclusion of a feasibility study by the Department of Water Affairs on treating acid mine drainage. – BuaNews
