De Beers is courting controversy with the proposed sale of its 86-year-old Namaqualand diamond mine after the company applied to the state to alter the mine’s closure costs and stands accused of failing to consult transparently with communities around the mine sites.
While labour, community and environmental groups have commended the mining giant for contributing to the region’s conservation and socioeconomic upliftment, they are concerned legacy issues will not be addressed in the sale, which De Beers hopes to complete this year.
There is particular concern about an application by the mining group to the Department of Mineral Resources to lower its environmental rehabilitation costs for Namaqualand, and a lack of financial detail about the petition.
In 2004, De Beers forecast the closure costs for Namaqualand at R507 million, but said last week it had applied to the department to revise this “premature” estimate, and had simultaneously amended a single environmental management plan (EMP) into a separate plan for each of six mining concessions in Namaqualand.
De Beers spokesman Tom Tweedy insisted the bulk of the revised EMP content was unchanged, although each area now required its own closure liability estimates. He would not specify the revised closure costs, saying the level had yet to be finalised with the Department of Mineral Resources. But he indicated revised costs would total more than a rumoured figure of R150m.
Department of Mineral Resources spokesman Bheki Khumalo said De Beers had advised the department it was still determining the size of financial liability and would submit its position by today.
The De Beers application was “still in process and has not yet been approved”, he said.
Conservation South Africa (CSA) said at the weekend it was concerned that interested and affected parties had no access to the final financial provisions calculated in the EMP. Director Sarah Frazee said the EMP had been deposited at the Springbok library, minus closure cost data.
CSA was concerned that lack of adequate provisions in the sale of the Namaqualand mine could result in the bankruptcy of the region’s municipalities as they would be responsible for the eventual costs of restoration.
“An area where this is already playing out in South Africa right now is the acid mine drainage issues from historic gold mining in the Gauteng area,” Frazee said.
“Our concern is that profit motives will outweigh social and environmental concerns and that poor process in the sale will initiate a cycle of sales that lead to less and less responsible companies coming,” she said.
Like the large gold mining houses that sold off marginal mines on the Witwatersrand, De Beers is selling Namaqualand to focus instead on large-volume mines, but believes that as South Africa’s biggest alluvial diamond resource, the mine is attractive to smaller mining companies.
It has received several binding offers since initiating the sale process in July last year, and hopes to complete the disposal before the end of 2011.
Namaqualand mine, which has been a loss-making operation for De Beers for many years, temporarily closed in 2009 due to the economic crisis, but De Beers said rehabilitation had continued, with about R100m spent.
CSA and the National Union of Mineworkers said they did not intend to delay or halt the sale of Namaqualand mine as they were confident of “responsible operators in the bidding process… Our aim is to ensure that the conditions for end land-use and sufficient financial securities are in the place, even if it reduces the current sale price”.
According to Frazee, some of De Beers’ recommendations, for example not capping the fine residue deposits as recommended in a prior EMP, would lead to major cost savings for the rehabilitating party, and a great increase in risk to the environment. However, De Beers insisted the revised assessment covered the costs of fine residue deposit areas, including provision for “prevention of future ground water pollution and no further ecological degradation”. CSA claimed the information provided was vague.
In a letter to De Beers last month, the NGO sought information on several issues, including the consideration of verified land claims in the mine closure plan.
Andy Pienaar, the manager of an advice office in Kommagas, claimed De Beers had been sidelining his community neighbouring the mine “for quite some time. De Beers is not acting in good faith. They should give the mine to somebody who can work it so people can be employed, but they shouldn’t forget their responsibility to the community after more than 80 years.” - Ingi Salgado