The Impact of Acid Mine Drainage in the Witwatersrand on the Mining Industry in Mpumalanga, Free State, Limpopo, North West and Northern Cape Provinces CONTENTS 1. THE PURPOSE OF THE DISCUSSION DOCUMENT ............................................................. 2 2. INTRODUCTION AND CONTEXT TO ACID MINE DRAINAGE ......................................... 2 3. THE PROBLEM STATEMENT ................................................ Error! Bookmark not defined. 4. LEGISLATIVE ENVIRONMENT FOR WATER RESOURCE MANAGEMENT AND WATER SUPPLY.............................................................................. Error! Bookmark not defined. 5. IMPACT ON TARIFFS ............................................................................................................... 7 6. CONCLUSION............................................................................................................................. 8 1|Page 1. THE PURPOSE OF THE DISCUSSION DOCUMENT The purpose of this document is to promote discussion on the issues relating to the implementation of a sustainable, long-term solution to the Acid Mine Drainage (AMD) challenge in the Witwatersrand so as to mitigate its impact on mining in the Mpumalanga, Free State, Gauteng, Limpopo, North West and the Northern Cape The information pertaining to the Vaal River System is taken from publications, presentations and reports from the Directorate: National Water Resource Planning: Department of Water Affairs, the work of the Steering Committee on the Vaal River System Reconciliation Strategy. 2. INTRODUCTION AND CONTEXT TO ACID MINE DRAINAGE Acid mine drainage is a significant and costly environmental challenge facing the mining industry worldwide and continues to affect the environment long after mining operations have ceased. Many metallic ores contain significant amounts of sulphide minerals, particularly pyrite (FeS2). Mining exposes this pyrite and other sulphide minerals to oxygen, which then oxidises. When this oxidisation product comes into contact with water, it dissolves, producing Acid Mine Drainage. This can happen in the mine void or in the waste rock and tailings on the surface On the Witwatersrand Goldfields the Western Basin has been decanting into the Crocodile River catchment since 2002, in the Central Basin, where pumping ceased in 2008, the level of the acid water is rising, with the risk of breaching the Environmental Critical Level (and also the tourist level of the Gold Reef City shaft) by June 2012. In the Eastern Basin, where pumping stopped in January 2011 it is estimated that the Environmental Critical Level will be breached in June 2013. An Inter-ministerial Committee was established to investigate the problem and recommended the following short-term actions: a. The installation of pumps to extract water from the mine voids to on-site treatment plants. b. The neutralisation of the acidity, and the removal of heavy metals, but not the removal of salts. c. Installation of infrastructure to convey the neutralised water to nearby water courses. Although the treatment would neutralise the acidity and remove a significant percentage of the heavy metals the water would still have high sulphate content, which unless used as make up water in a closed industrial process, such is found in the mines, would have no value and would be discharged into the environment. Money would be needed to fund both the capital and operating costs and the treated AMD would have a detrimental impact on the receiving watercourses due to the high sulphate content. 2|Page The release of saline water into the Vaal River System will put the Upper Vaal catchment (i.e. the catchment that supplies Gauteng, North West Platinum mines and the Mpumalanga coalfields and power stations) into deficit1, see Figure 1, requiring periodic releases of water from the Vaal Dam into the Vaal Barrage to ensure that the quality of water released into the Middle Vaal meets the required standard of 600 mg/litre. Yield / Water Requirements (million m3 / annum) INDICATORS: 1. High demand, with target WC/WDM achieved 2. AMD: Neutralised only, then discharged 3. Unlawful abstraction from Liebenbergsvlei eradicated High Water Requirement Scenario with Water Conservation and Demand Management 3800 3600 3400 Short-term excess yield Yield reduction due to dilution wastages 3200 Deficit 3000 Deficit 2800 System Yield Polihali Dam Yield 2600 2400 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Years AMD pumping commences. Yield increases by 76 million m3/annum First transfer from LHWP Phase II 1 Figure 1: Vaal River System Reconciliation From the DWA records, See Figure 2, show that there has been a considerable reduction in dilution releases from the Vaal Dam, which coincides with the cessation of pumping of saline mine water (only neutralisation was undertaken) in the Central and Eastern Basins. The assumption is that by resuming pumping, or allowing decant, the salt load will be put back into the river system and an estimated that 220 million m3/annum would then need to be released from the Vaal Dam to ensure the water quality standards in the Middle Vaal are met. Since this would create an excess in the Middle and Lower Vaal this represents a loss of approximately R482 million at the current Vaal River Tariff. This does not count the potential constraint on economic growth, which would be brought about by water shortages, if a drought occurred. 1 It is noteworthy that, should water conservation and demand management programmes prove to be less effective, the deficit may commence at a date earlier than 2015 3|Page Figure 2: Dilution Releases from the Vaal Dam Failure to establish a sustainable long-term solution to AMD would lead to the prolonged reliance upon funding from the general fiscus, increase of the salt load in the Vaal River, which could only be mitigated by releases from the Vaal Dam, and a subsequent deficit in the Upper Vaal which could have severe economic impacts if a drought occurs (the last drought ended in December 1995). 3. VAAL RIVER SYSTEM The development of the Vaal River System can be directly traced to the discovery of gold on the Witwatersrand in 1886, which posed unique challenges in providing a secure water supply as the gold reef lay almost directly along the continental divide. This meant that no rivers ran through the developing mining towns and the Witwatersrand area experienced continual water shortages until Rand Water, which was established in 1903, commissioned the Vaal Barrage in 1923. One of the main features of the Rand Water System, is the need to pump the water 380 m up to the continental divide. Thereafter to meet the continual rising demand in the Gauteng and the adjacent areas, as well as the development of the power, mining and oil from coal plants in the Mpumalanga Highveld further dams were constructed on the Vaal River and then dams and transfer schemes developed in the adjacent catchments, to the south and east, to meet the ever rising demand. Currently water is transferred from the Usuthu, Uthukela, Senqu catchments to meet the demand on the Vaal River as well as the Nkomati, which forms part of the Vaal River Eastern Subsystem feeding the Mpumalanga Highveld. 4|Page Due to the complexity of the system and the need to be able to respond to hydrological events (drought and floods) the Vaal River System tariff was developed whereby all domestic and industrial consumers down to the confluence of the Vaal with the Orange River pay the same average tariff as they are all deemed to have benefitted from the additional water brought into the system, even if they do not use the water directly. Based on the extensive investigations and studies by The Department of Water Affairs, the following have been identified as the main options for increasing the availability of water in the Vaal River System: Lesotho Highlands Water Project Phase II: This comprises the proposed Polihali Dam and connecting tunnel to Phase I of the LHWP. In order to compensate for the reduction in yield downstream along the Orange River that would result from transferring the full yield of Polihali Dam to the Vaal River System, it would be necessary to also construct dams at Vioolsdrift as well as at the Bosberg site on the Orange River. Use of acid mine drainage: This will comprise the collection and processing of acidic water draining from defunct mines, for supply to urban users. Orange-Vaal transfer: Water could be made available from a larger dam near Bosberg on the Orange River (the proposed Boskraai Dam) for transfer via pipeline to the Vaal River System, after the LHWP Phase II. Thukela-Vaal transfer (Phase II): Planning has already been done for the construction of a dam at Mielietuin on the Bushmans River as well as a dam at Jana on the Thukela River, and the piping and pumping of water up the Drakensberg escarpment to the head waters of the Vaal River System. Mzimvubu-Vaal transfer: With the Mzimvubu River as the only major river in South Africa that is still largely undeveloped, the option exists for dams to be constructed on the main tributaries of the river and the water to be transferred to the upper Kraai River in the Orange River catchment, for further transfer to the Vaal River System via a pipeline from the proposed Boskraai Dam. Zambezi-Vaal transfer: A conceptual assessment was made of abstracting water from the Zambezi River upstream of the Victoria Falls, and pumping it via a pipeline to the Gauteng Botswana may also exist (as well as for water supply to the Lephalale area and further on to the Olifants River System). Such a scheme will obviously be subject to agreement being reached with the Zambezi basin countries with respect to the abstraction of water as well as on royalties. A provisional allowance for royalties is included in the URV. Desalination of seawater: As the ultimate fall-back option and benchmark, seawater can be desalinated and pumped to locations where needed. 5|Page In the case of the Vaal River System only the Polihali Dam has advanced sufficiently far in planning to enable construction to commence and with first transfers expected by 2020. The pre-feasibility for Orange-Vaal Transfer and Thukela Vaal Transfer has not yet commenced, therefore, the ability to obtain water from these systems is even further in the future. The conclusion by the Department of Water Affairs is that use of Acid Mine Drainage remains the only option available to augment the Vaal River System within the required timeframe. Although the use of AMD only produces 58 million m3/annum due to the fact that dilution release will not be required it will release a further 220 million m3/annum, in the Vaal Dam, for consumptive use. The effect of implementing this option is shown below. Yield / Water Requirements (million m3 / annum) SCENARIO INDICATORS: 1. Demand: High with target WC/WDM 3800 3600 Yield reduction due to dilution wastages Short-term excess yield 2. AMD: Neutralised and desalinated, used as a water source System yield conserved due to desalination of mine water 3. Unlawful abstraction from Liebenbergsvlei eradicated High Water Requirement Scenario with Water Conservation and Demand Management 3400 3200 Polihali Dam Yield 3000 2800 2600 2400 2005 System Yield 2010 2015 2020 2025 2030 2035 2040 2045 2050 Years AMD pumping commences. Yield increases by 76 million m3/annum Desalination of AMD commences First transfer from LHWP Phase II Figure 4: Vaal River System Reconciliation (AMD used as a Water Source) If AMD is not treated to a level where the salt load is removed, the Upper Vaal will go into deficit and if there is a drought, long overdue, either: 1) Restrictions will be placed on consumers in the Upper Vaal; or 2) The dilution standard at Vaal Barrage will be relaxed resulting in very poor quality water reaching the consumers in the Middle and Lower Vaal (KOSH area, Free State Goldmines and all the mining activity in the Northern Cape on the Vaal Gamagara Scheme) With the Upper Vaal in deficit there would then be no possibility of transferring water into the Olifants catchment (currently possible through the VRESS) and mining activities in 6 provinces could be affected if water consumption is curtailed. 6|Page Unlike electricity where it is possible to purchase stand-by generating capacity, if there is no water, it cannot be replaced. However to date: 1) Only R433 million has been made available for the short-term solution (capital requirement R924 million); 2) The long-term solution is still subject to a feasibility study even though DWA’s own planning directorate shows that treatment of AMD to remove the salt load must be implemented; and 3) The Government still talks of making the “polluter pay” even though it would involve invoking retroactive legislation (legally it is doubtful this would be possible) and the alternative is an environmental levy on all operating mines in South Africa. The mining industry is already being constrained by shortages of water on the Eastern and Western Limbs of the Bushveld. The question it needs to ask itself is that even though it cannot be held liable for the legacy created in closed mines, where it no longer has ownership of the mining rights, is it prepared to risk seriously curtailed production in the event of a drought by letting the Upper Vaal go into deficit? 3. CAPITAL CONTRIBUTION TOWARDS MITIGATING THE EFFECTS OF ACID MINE DRAINAGE In the end the mining industry will pay either: 1) Through legislation (the polluter pays principle or an environmental levy); or 2) Through the Vaal River System tariff, along with all the other domestic and industrial consumers on the Vaal River System, for the treatment of AMD and or other augmentation options. If the 2nd option is implemented it is currently estimated this will add between 40 – 50 cents/m3 to the price of water. Given that to date that it has not been possible to hold the mining industry liable for the environmental impacts caused by the closed gold mines, the 2nd option is more likely. The question is “Will the long-term treatment option be implemented before the Vaal River System goes into deficit?” Without admitting liability for the problem it would appear to be in the economic interest of the mining industry to prevent this. One way of achieving this, without admitting liability, is to make a capital contribution to towards the construction of the long-term solution. 7|Page The estimated capital cost to implement the Long-Term AMD Solution for a 160 Ml/day plant is R3.450 billion in 2011 terms, including the cost of abstraction, neutralisation and desalination (This cost will be reduced if customers can be found to purchase the neutralised AMD). Thus far the government has committed R433 million towards implementing the solution. 4. CONCLUSION The Department of Water Affairs has clearly demonstrated the impact on the Vaal River System, resulting in the imposition of water restrictions if drought occurs, if the salt load from decanting, or partially treated, Acid Mine Drainage is not kept out of the Vaal River System. It is simply not possible to bring forward another augmentation scheme to prevent this and in any case it makes very little sense to incur the expense of another augmentation scheme simply to dilute the salt load in the Vaal Barrage and create an excess of water in the Middle and Lower Vaal. All consumers, including the mining industry, would pay for these augmentations through the Vaal River tariff. The impending deficit in the Upper Vaal, or lowering the total dissolved solids standard at the Vaal Barrage has an impact on mines in 6 provinces and will result in increased treatment costs or curtailed production due to restricted water supplies. Although it has not been possible to hold the mining industry liable for the problems caused by Acid Mine Drainage, the mining industry will be directly impacted by the Upper Vaal going into deficit. Although the mining industry is one of the many consumers that will be affected by this, it is the only one with direct linkage to problem. In order to prevent the problem, but without admitting liability, it is suggested that the mining industry makes a capital contribution (up to R3.45 billion) towards the construction of the long-term solution. The magnitude of the contribution, together with any conditions attached, will determine how this will influence government policy. ooOoo 8|Page