PORTION OF PORTION 59 OF THE FARM VISCHGAT 467 IR PRI_003-15

Transcription

1 DMR Application Reference No. GP MR Section 24P(3) of the NEMA The holder of a mining right must annually assess his or her environmental liability and increase his or her financial provision to the satisfaction of the Minister. PROJECT COMPILED FOR: PRIME SPOT TRADING 11 (PTY) LTD PROPERTY DESCRIPTION: PORTION OF PORTION 59 OF THE FARM VISCHGAT 467 IR REPORT NUMBER: PRI_ DATE: APRIL 2017 REPORT COMPILED BY: UMHLABA ENVIRONMENTAL CONSULTING CC

2 COPYRIGHT WARNING Unless otherwise stated, the copyright in all text and other matter (including the manner of presentation) is the exclusive property of Umhlaba Environmental Consulting CC. It is a criminal offence to reproduce and / or use any matter, technical procedure and / or technique contained in this document, without written consent, unless it is being reproduced for the purpose in which it was intended. AUTHOR S CONTACT DETAILS Umhlaba Environmental Consulting CC Tell: (011) P.O. Box Fax: (011) Fairland, info@umhlaba.co.za April 2017 Page i

3 EXECUTIVE SUMMARY This document aims to satisfy the requirements of Section 24P(3) of the National Environmental Management Act, Act No. 107 of 1998 (NEMA) and represents the 2017/2018 annual review of financial provision. On 20 November 2015, Financial Provision Regulations (GN 1147) was promulgated under the NEMA. According to amendments to these Regulations, which were published by way of GN 1314 on 26 October 2016, the transitional period for the implementation of the new financial provision regulations is 39 months (i.e February 2019). As a result of the extended timeline, this Financial Provision Calculation is undertaken by making use of the Department of Minerals and Resources (DMR) Guideline Document for the Evaluation of the Quantum of Closure Related Financial Provision Provided by a Mine, Revision 1.6, published in January 2005, (DMR, 2005). The Trading 11 (Pty) Ltd mining right application area is situated in the Magisterial district of Vereeniging, located approximately 15km south-east of Vereeniging. Access to the site is gained via the R54. The mining right application area is located on Portion 59 of the Farm Vischgat 467 JR. This calculation considers both the liability associated with the existing disturbance and the liability associated with the proposed future disturbance. Google Earth imagery was used to calculate the various areas currently disturbed. The information required to determine the financial provision calculation was ascertained from a combination of; Discussing the extent of the infrastructure / areas with the applicant. Making use of a GPS on-site to mark specific areas during a site inspection. Using Google Earth and measuring the size of various areas associated with the current disturbance and the proposed future mine. By making use of the DMR guideline document for calculating financial provision, the 2017 / 2018 financial provision for the existing disturbance at the proposed mining right area is R Based on the planned activities proposed for future mining an end of life liability of R has been estimated. The financial provision calculation should be re-evaluated for the March 2018 February 2019 period of assessment. Thereafter the new Financial Provision Regulations, 2015 should be followed. April 2017 Page ii

4 CONTENTS 1 INTRODUCTION REGULATORY CONTEXT BACKGROUND INFORMATION TO THE QUARRY DESCRIPTION OF THE CLOSURE REQUIREMENTS OF THE MINE SPECIFIC DESCRIPTION OF CURRENT SITE CALCULATING THE FINANCIAL PROVISON METHOD AND PERIOD OF ASSESSMENT MULTIPLICATION AND WEIGHTING FACTORS DEGREE OF DISTURBANCE: THE FINANCIAL PROVISION CALCULATIONS CONCLUSION DECLARATION OF AGREEMENT TABLES Table 1: Summary of the multiplication and weighting factors used for Sky Quarry Table 2: Degree of Disturbance... 8 Table 3: Present day closure costs FIGURES Figure 1: Indication of the existing disturbance and proposed future mining activities Figure 2: Aerial photo of the existing disturbance covered under the financial provision calculation. (Google Earth.)... 6 PHOTOGRAPHS Photograph 1: The existing pit Photograph 2: The plant associated with Sky Quarry Photograph 3: Overburden located to the south east of the pit Photograph 4: Administration building... 5 Photograph 5: Additional mobile containers April 2017 Page iii

5 1 INTRODUCTION Trading 11 (Pty) Ltd requested Umhlaba Environmental Consulting CC to undertake a financial provision assessment of the area covered by their mining right application area. Pertinent to the calculation is that there is an existing disturbed footprint from historical mining activities and then a proposed end of life footprint based on the application to expand the existing mined out area. 1.1 REGULATORY CONTEXT This document aims to satisfy the requirements of Section 24P(3) of the National Environmental Management Act, Act No. 107 of 1998 (NEMA) and represents the 2017/2018 annual review of financial provision. On 20 November 2015, Financial Provision Regulations (GN 1147) was promulgated under the NEMA. According to the transitional arrangements and specifically in terms of Section 17(5) which reads as follows: 17(5) A holder must (a) within three months of its financial year end following the coming into effect of these Regulations and annually thereafter; or (b) within 15 months after the coming into effect of these Regulations and annually thereafter; ensure that a review, assessment and adjustment of the financial provision is conducted in accordance with regulation 11 of these Regulations, read with the necessary changes, and submit an updated financial provision, including the plans and report contemplated in regulation 11(1), a copy of the independent auditor s reports and proof of payment or arrangements to provide the financial provision for approval by the Minister responsible for mineral resources. Subsequently, amendments to these Regulations were published by way of GN 1314 on 26 October 2016 and this effectively extends the transitional period for existing mines to implement the requirements of the new regulations. The following excerpt, from GN 1314, is applicable in this regard. Extension of the transitional period 3. A holder, or holder of a right or permit who applied for such right or permit prior to the commencement of the Regulations but who obtained such right or permit after the commencement of the Regulations, must within 39 months of the commencement of the Regulations and annually thereafter- (a) ensure that a review, assessment and adjustment of the financial provision is conducted in accordance with regulation 11 of the Regulations, read with the necessary changes; and (b) submit an updated financial provision, including the plans and report contemplated in regulation 11(1), a copy of the independent auditor's reports and proof of arrangements to provide the financial provision for approval by the Minister responsible for mineral resources, which updated financial provision must be- (i) included in any audit required terms of an environmental authorisation issued terms of the Act; and (ii) attached to any amendment of an environmental management programme to be submitted in terms of the Environmental Impact Assessment Regulations, These amended Regulations extend the transitional period and compliance to February As a result of the extension, this Financial Provision Calculation is undertaken by making use of the DMR Guideline Document for the Evaluation of the Quantum of Closure Related Financial Provision Provided by a Mine, Revision 1.6, published in January 2005, (DMR, 2005). 1.2 BACKGROUND INFORMATION TO THE QUARRY The original quarry was developed through a mining permit (GP 76 MP). This resulted in the devlopemtn of a pit (Pit 1), a crushing plant, limited supporting infrastructure, stockpile area and overburden berms. The historic mining activities ceased due to lapsing of the mining authorisation (as opposed to reaching the end of life of mine (i.e exhausting of viable mineral resources). A new mining right application is being undertaken by. This can be viewed as a continuation of the mining activities that have already occurred over the property, as the prospecting results have indicated that there still is a viable mineral resource to facilitate mining for over another 50 years. See Figure 1 below for an indication of the existing disturbance and the proposed additional footprint disturbance associated with the new application. April 2017 Page 1

6 Excluded Grave Area Power Room & Workshop - Fuel Area - Waste Management Proposed Mining Right Area 50m Mining Pillar Pit 1 Pit 2 Pit 3 Power Line Offices & Parking Access Road Crushing & Screening Plant Stockpile Area Overburden Dumps Figure 1: Indication of the existing disturbance and proposed future mining activities. April 2017 Page 2

7 1.3 DESCRIPTION OF THE CLOSURE REQUIREMENTS OF THE MINE The following overarching information concerning closure requirements is applicable for both the current status of the site and the future mining; Mine closure will comply with the legal requirements of the day when closure is implemented. At the end of the life of mine, the quarry will be made safe through sloping at least the top 2 benches to an angle of repose. Water will be allowed to accumulate in the base of the quarry. All infrastructures (with no future value for the landowner at the time of closure) will be demolished and removed from site. The site will be assessed for potential contamination. Any contamination noted will be appropriately removed. All disturbed surfaces will be profiled, topsoiled and revegetated. If necessary, the material contained in the berms and dumps will be used as a medium to profile areas and to encourage revegetation. If not required the berms and dumps will be left re-vegetated. 2 SPECIFIC DESCRIPTION OF CURRENT SITE The following section provides detail concerning the existing status of the historical mining permit area. Google Earth imagery, was used to calculate the various areas. When reviewing this section of the report, Figure 2, below should be consulted as it provides an indication of the location of the various areas / structures associated with the proposed mine The Pit The existing open cast pit is approximately 2.1 ha in extent (Photograph 1). Photograph 1: The existing pit. Future mining will involve the expansion of pit 1 into pit 2 (~49 years of mining) followed by the opening up of pit 3 (15 years of mining). Based on the current plans at the end of the life of the mine, the pits will cover an area of approximately 25 hectares The Plant There is one crushing plant at Sky Quarry. It is estimated that there is 790m 3 of crushing structures associated with the plant (Photograph 2). April 2017 Page 3

8 Photograph 2: The plant associated with Sky Quarry. It is assumed that when re-commissioning mining operations the existing structures will be evaluated and where necessary replaced. There is a potential to increase the area associated with the plant over the course of the mine The overburden dumps The overburden is currently dumped in 2 locations. Area 1 is adjacent to the western side of the pit and area 2 is to the south east of the pit (Photograph 3). Photograph 3: Overburden located to the south east of the pit. Future overburden (which cannot be sold as fill material) will be located adjacent to the final pit dimensions. The overburden will either be use to profile areas on the mine or left in situ at the end of the life of the mine. April 2017 Page 4

9 2.1.4 General surface disturbance General surface rehabilitation areas include; Area associated with the existing plant, and Stockpile areas (area 1 and 2) Infrastructure: Other than the crushing plants, the following infrastructure is on site which will require removal A mobile administration container (Photograph 4) Additional mobile containers (Photograph 5) Photograph 4: Administration building Additional mobile containers Photograph 5: Additional mobile containers Access road: There is an access road from onto the mine property. However this access is required not only for the mine but to also allow access for relatives of deceased people who have been buried on the property. Therefore, at the end of life of mine the access road will be left to continue to facilitate access to the graves. April 2017 Page 5

10 Figure 2: Aerial photo of the existing disturbance covered under the financial provision calculation. (Google Earth 1.) 1 Download the application for free from April 2017 Page 6

11 3 CALCULATING THE FINANCIAL PROVISON The following legal references are from the Mineral and Petroleum Resources Development Act, No. 28 of 2002 Regulations. These regulations have not been repealed and are therefore still considered. 51(b)(v) Financial provision in relation to the execution of the environmental management programme which must include: (aa) the determination of the quantum of the financial provision contemplated in Regulation 54; and (bb) details of the method providing for financial provision contemplated in Regulation (1) The quantum of the financial provision as determined in a guideline document published by the department from time to time, include a detailed itemisation of the actual costs: In order to calculate the Financial Provision for the operation, the author referred to the DMR Guideline Document for the Evaluation of the Quantum of Closure Related Financial Provision Provided by a Mine, Revision 1.6, published in January 2005, (DMR, 2005). The author has opted to calculate financial provision using the Rules-based assessment. The guideline document is based on determining the amount of infrastructure and areas of disturbance within the mine and then allocating the areas to a defined component as documented within the guideline document. 3.1 METHOD AND PERIOD OF ASSESSMENT The re-assessment of the financial provision was undertaken by evaluating the extent of current physical disturbance compared to that of historic disturbance captured in the previous financial provision calculation which was last conducted in The information required to determine the financial provision calculation was ascertained from a combination of: Discussing any changes to the extent of the infrastructure / areas captured in the previous financial provision calculation with the mine manager. Making use of a GPS on-site to mark specific areas during a site visit on 1 March Plotting the GPS points taken on-site on Google Earth and measuring the size of various areas associated with the mine This financial provision calculation covers the period March 2017 to March MULTIPLICATION AND WEIGHTING FACTORS Although Sky Quarry has an approved EMPlan they do not have a detailed Closure Plan based on the EMPlan nor a detailed breakdown of costs for rehabilitation. Therefore they are classified as having limited information available for the calculation of financial provision. The financial provision has therefore been calculated using the rules-based approach. A summary of the multiplication and weighting factors used in calculating the financial quantum is provided in Error! Reference source not found.. Table 1: Summary of the multiplication and weighting factors used for Sky Quarry. FACTOR BASIS FOR CHOSEN VALUE Multiplication Factor 1 Mineral: Stone / aggregate 2 Risk Class: Category C - Low Risk 3 Area Sensitivity: High. reasons provided below: Biophysical: Medium: Area is a mix of natural and exotic fauna and flora, development is a mix of disturbed and undisturbed areas. Social: High: The local communities will have an important interest in the graves located in an excluded area within the middle of the mining right application area. Economic: Low: The area is not a major source of income to the local communities. 4.1 Level of Information: Rules-based approach. 4.2 Closure Component: Open-cast activity, hence component 7 is excluded from calculations. 4.3 Unit Rates: Selected based on information provided above. 4.4 Weighting Factors Weighting Factor 1: Terrain is considered flat. April 2017 Page 7

12 FACTOR Weighting Factor 2: 3.3 DEGREE OF DISTURBANCE: BASIS FOR CHOSEN VALUE The proposed mine is located within a peri-urban area. Table 2 provides a summary of the disturbance associated with the existing and proposed future operations. Table 2: Degree of Disturbance COMPONENT AS PER GUIDELINE 1. Dismantling of processing plant and related structures (including overland conveyors and power lines) 2A. Demolition of steel buildings and structures 2B. Demolition of reinforced concrete buildings and structures CURRENT FUTURE EXTENT EXTENT MOTIVATION The current structures associated with the crushing plant extends over approximately 790 m m m 3 An assumption is that the crushing infrastructure will expand during the course of the mining operation and hence an additional 500 m 3 has been added to the existing extent. 245 m m 2 The existing steel building include; Administration container (45 m 2 ) Additional containers (200 m 2 ) An additional allocation has been made for a future workshop (400m 2 ) which will be constructed should the mining right application be successful. 110 m m 2 The reinforced structures include the following: 110m 2 associated with the crushing plant Future additional structures include; 100m 2 associated with additions to the crushing plant 40m 2 associated with the weighbridge 5m 2 associated with the bunded fuel tank 10 m 2 associated with the washbay 100m 2 associated with a new workshop and oil trap 3. Rehabilitation of access roads 0 m 2 0 m 2 The access road onto the property will continue to be used once mining activities have been completed. Hence no allocation. 4A. Demolition and rehabilitation There are no electrified railway-lines 0 m 0 m of electrified railway lines present in the proposed mining area. 4B. Demolition and rehabilitation of non-electrified railway lines 0 m 0 m There are no non-electrified railway-lines present in the proposed mining area. 5. Demolition of housing and/or administration facilities 0 m m 2 Future housing / administration facilities than would require removal includes: 50 m 2 associated with the weighbridge offices 140 m 2 associated with administration offices 10m 2 associated with a security building April 2017 Page 8

13 COMPONENT AS PER GUIDELINE 6. Opencast rehabilitation including final voids and ramps 8A. Rehabilitation of overburden and spoils 8B. Rehabilitation of processing waste deposits and evaporation ponds (non-polluting potential) 8C. Rehabilitation of processing waste deposits and evaporation ponds (polluting potential) 9. Rehabilitation of subsided areas 10. General surface rehabilitation CURRENT FUTURE EXTENT EXTENT MOTIVATION 2.1 ha 25 ha The current extent of the pit was measured at 2.1 hectares. At the end of the life of the mine the proposed extent of all pits is 25 hectares (See Figure 1) Ha 3 Ha The existing overburden dumps which require rehabilitation are 0.85 hectares. Assuming the sale of some of the overburden material as fill material, it has been estimated that the overburden dumps could expand to 3 hectares over the life of the operation. 0 ha 0 ha No washing of material will take place and hence no settlement dams will be created. 0 ha 0 ha There is no polluting processing waste associated with the proposed mine. 0 ha 0 ha There is no potential for any subsidence, from the proposed open cast mining operations. 2 ha 2 ha The areas included within this allocation includes; The disturbed area associate with the plant and stockpiles. The intention is to erect all future mining requirements within the existing disturbed footprint. 11. River diversions 0 ha 0 ha None necessary 12. Fencing 0 m 0 m Once the mine is rehabilitated, no fencing will be required. 13. Water management 0 ha 0 ha No allocation to water management has been provided as none is deemed necessary to 3 years of maintenance and aftercare 3.4 THE FINANCIAL PROVISION CALCULATIONS 4.85 ha 30 ha Maintenance and aftercare will be required in all areas requiring active rehabilitation. Presently this covers an area of approximately 4.85 ha. With the expansion of the pits and overburden over the life of the proposed mine, the full extent of disturbance could increase to up to 30 ha. The value for financial provision, as calculated in Tables 3 and 4 below, is the financial provision that would have been required in 2005 (as this is the year that the Guideline Document and master rates were determined). To determine a suitable financial provision for present day costs, the provision must be adjusted for inflation. The inflation rates were taken from a report published by Stats SA; CPI History: 1960 Onwards 2 ( 3 ). The base CPIX inflation as of January 2005 was The latest available inflation figure is for March 2017 which provides a base inflation rate of This represents a 105% increase in cost since January 2005 through to March Downloaded on 28 April 2017, 18:00pm April 2017 Page 9

14 The original master rates within the financial provision (in Tables 3 and 4 below) have been adjusted to consider the impact of inflation. The original Master Rate for Component 14, in the DMR Guideline, is 7,00. As this appears to be a printing error, an original Master Rate of 7,000 has been used in the calculations. April 2017 Page 10

15 Table 3: Present day closure costs April 2017 Page 11

16 Table 4: End of life closure costs (at present day prices): 4 CONCLUSION By making use of the DMR guideline document for calculating financial provision, the 2017 / 2018 financial provision for the existing disturbance at the proposed mining right area is R Based on the planned activities proposed for future mining an end of life liability of R has been estimated. The financial provision calculation should be re-evaluated for the March 2018 February 2019 period of assessment. Thereafter the new Financial Provision Regulations, 2015 should be followed. April 2017 Page 12

17 5 DECLARATION OF AGREEMENT I, on behalf of Trading 11 (Pty) Ltd confirm that I have read and understood the contents of this report and associated Financial Provision Calculation. Furthermore, I accept this Report to be the final version and offer signature of agreement. Signed on this day of, 20 at Signature: Designation:. April 2017 Page 13