Mining in focus
Illegal miners follow deposits wherever they occur, even if the sites are extremely remote.
mining challenge is needed. Illegal gold mining
is the largest revenue loser for South Africa
and involves the most people. Illegal chrome
mining comes second and definitely has large
professional syndicates involved, with illegal
diamond mining a distant third, Major said.
Major provides some interesting statistics:
• It is estimated that at least one million
tons per annum (tpa) of chrome is
illegally mined and sold. Good quality
chrome ore is worth USD150 to USD200
per ton. So that is USD150-million to
USD200-million annually.
• It is estimated that at least 10% of South
Africa’s annual gold production is lost
through illegal mining or theft from
operating mines. Just 10% of 155tpa
production is 15tpa. Gold is
USD1 300 per ounce (oz), which is
USD42-million per ton. Here the 15 tons
equals USD630-million.
• South Africa’s official diamond
production is about eight million carats
per annum at an average of USD120
per carat, equalling USD1-billion.
Even if illegal mining is 10% the size of
official production, that would be at least
USD100-million per annum.
DMR’s approach
The DMR has adopted a three-pronged
approach in dealing with illegal mining
practices. Firstly, it aims to promote legitimate
mining practices through the authorisation
of mining permits. Secondly, the DMR is
attending to the rehabilitation of derelict
mines, particularly in the sealing of mine
www.miningmirror.co.za
entrances and shafts to prevent illicit access.
Lastly, the department is working closely with
law enforcement agencies to reduce incentives
to become involved in illegal mining.
Estimates are that more than 30 000 illegal
miners operate in South Africa. Speaking
at the Sustainability Week 2018 seminar
in Pretoria recently, mining analyst David
van Wyk looked at the social and economic
contribution of informal mining. Assuming
a dependency ratio of 1:8, it implies that
250 000 people are indirectly affected by the
artisanal mining sector. Van Wyk suggested
that South Africa needs to consider the
transition from large-scale industrial mining to
small-scale mining that is orderly, sensible, and
safe.” To achieve this, he suggests organising
artisanal miners into legal business entities,
such as cooperatives, and providing them with
the required training. In addition, he suggests
it is beneficial to cluster these operations
geographically into units of 5–10 operations
and assign an engineer and a health and safety
officer to each cluster. He further suggests
creating a central buying agency that will
legally buy from these miners and offer them
market-related prices.
An arduous process
To get a mining permit from the DMR
in terms of the Mineral and Petroleum
Resources Development Act (MPRDA),
small-scale miners must comply with
government requirements. This includes
providing environmental assessments and
feasibility studies on the land they want
to mine. The mining permits are non-
transferable and are usually registered in the
name of a person or a company. The formal
process for gaining these mining permits is
expensive and onerous. Mining permits are
only issued if the mineral in question can be
optimally mined within a two-year period and
if it does not exceed five hectares in extent.
It may however be renewed for three more
periods of no more than a year each.
The applicant for the mining permit also
needs to apply for environmental authorisation
and engage in a consultation process with the
land owner or legal occupier that holds the
surface rights. There also needs to be a public
participation process with all interested and
affected parties. The mining permit holder
is also only allowed to extend the mining
right to residue dumps that were produced
by sole virtue of the existing mining permit.
The mining permit holder is also obligated
under the MPRDA to remain responsible for
environmental liability, pollution, ecological
degradation, pumping and processing
of extraneous water, compliance of the
environmental authorisation, and management
and sustainable closure thereof until a closure
certificate is issued.
The action of handing out mining permits
to informal and illegal miners raises several
questions in the small-scale mining sector. It
would appear that these miners did not have to
meet any of the usual requirements set for the
application for a mining permit. This includes
the drawn-out public and land ownership
public consultation and participation process,
environmental authorisation, and conducting
feasibility studies. Will these requirements now
be waivered for the small-scale mining sector?
Other unanswered questions relate to the
enforcement of tax and royalty payments, as
well as the responsibility of the rehabilitation
of these sites.
MARCH 2019 MINING MIRROR [27]