Johannesburg - The Centre for Environmental Rights (CER), a non-profit organisation that champions the rights of communities to a healthy environment, has called for transparency in the sale of Anglo American’s coal and iron ore assets.
In an open letter penned to Anglo American chief executive Mark Cutifani, the CER called on management to act responsibly and in the interest of the environment and South Africa’s public as it prepared to sell the assets.
Anglo said last month that it was shaking up its portfolio as it buckled under pressure of debt and as low commodity prices weighed heavily on the already shrinking mining sector.
The company said it would cut the number of assets to 16 from 55 and envisaged focusing on its diamond, platinum and copper businesses.
The CER said it had noted a trend in South Africa where large mining houses sold mines, usually with significant environmental liabilities, to smaller companies after most reserves were depleted.
“The trend sees these smaller companies going insolvent shortly after the sale, before any of the prescribed rehabilitation of environmental damage has taken place.
“Liability for pollution, ecological degradation, the pumping and treatment of extraneous water, and latent and residual impacts, as well as obligation to apply for a full closure certificate, vests in the last holder,” it said.
“The seller, who held and benefited from the mining right, avoids liability for rehabilitation on the grounds that it was not the last holder of the right.”
Anglo spokesman Pranill Ramchander said information regarding the various engagements and bidders could not be disclosed as the company was bound by confidentiality undertakings entered into with potential bidders.
“It is also premature to answer any detailed questions pertaining to the disposal our non-Eskom coal mines, as we made the announcement of the sale as recently as Tuesday, February 16 and have consequently initiated a review to evaluate the most optimal manner and timing to exit from these assets,” he said.
“We have made it clear publicly that we will exit in a responsible manner that would not only maximise value for our shareholders but also ensure that these assets continue to be managed by an experienced and credible operator and in the best interests of employees, communities and other stakeholders,” he added.
The CER said the sale of Harmony Gold’s operations in Northwest to Pamodzi Gold remained a matter of contention despite a Supreme Court ruling that it could not walk away from historic pollution.
“Given this trend, the CER calls for transparency, as publicly committed to by Anglo American and public participation in the transfer of any rights by Anglo American. We call specifically on management of Anglo American to act responsibly, and in the interests of the environment and the South African public, as it readies itself to dispose of its coal and iron ore asset,” it said.
In its report titled “Full Disclosure: The truth about corporate environmental compliance in South Africa”, an assessment of the extent to which 20 listed South African companies complied with environmental laws between 2008 and 2014, it found the companies in breach of environmental laws.
“Our findings are that many companies which have regularly been hailed as shining examples for their approach to managing environmental, social and governance factors, have in fact committed serious breaches of environmental laws during the assessment period.
“In many cases, the information provided by these companies to their shareholders about their environmental impacts and non-compliances is either misleading, or so minimal as to make it impossible to verify claimed commitments to sound environmental management,” the report said.
In the report, it said that Anglo had provided little data on environmental non-compliances and incidents to shareholders. The CER report further alleged that Lonmin, the world’s third-largest platinum producer, as well as other mining companies, had violated laws and caused harm to the environment.