It is not always understood what mining is. So let’s be clear, “The Mineral Petroleum Resources Development Act” (MRPDA) states that once this material is taken away from its natural state and put in another form it is or has been mined.
What is of concern is that it is found acceptable for construction companies and municipalities to excavate material from illegal borrow pits for the duration of specific projects and pretending they are doing nothing wrong.
The consequences are that many unregulated excavations are being carried out all over the country. What is often not understood is the disastrous effects these little diggings have on the Environment, the surrounding communities as well as the negative effect and impact on legally operating quarries.
Unfair Competition
In South Africa we constantly hear about the terms, “unfair competition” and “collusion”. If we look at this in the surface mining industry we see a vicious circle of unfair competition, lets discuss:
Unfair competition jeopardizes the future of all companies in this part of the mining industry.
We constantly have new legislation – developed for big mines – forced upon smaller legal operations, but this obviously does not apply to illegal operations
There is a constant increase in the costs of compliance by legal operations.
On the other hand, we have very poor implementation of the legislation. The only ones who get focused on, are the legal quarries and again a blind eye is turned to the illegal sites. There is no control over those that just start digging. The main Regulator, the Department of Mineral Resources and Energy (DMRE) has no force, willingness or focus on these operations.
This all leads to unfair competitiveness and the compliant companies lose their competitiveness as they have various unfair competitive “enemies”, the illegal operating, Government and semi Government departments doing the digging and then also a regulating authority that is obviously turning a blind eye to the offenders.
All of this contributes to this end of the industry having a particularly bad image and the illegal non-compliance part of the industry gets away with it, while the legal operations are burning themselves to stay legally compliant.
This whole part of the illegal industry should be investigated by the competition regulator and SARS as the illegal operations will not be paying their taxes if they know they are illegal.
Other issues
Much of the aggregates extracted are used by civil works. Companies especially these registered, on the stock exchange should not purchase material to do infrastructure work that is illegally obtained. Again the Regulators, SARS and others should focus on the purchase of the materials used and if not fully legally compliant then severe penalties should be implemented. Companies should be warned about purchasing illegal materials.
Many examples of illegal land filling, backfilling and dumping of waste takes place. Legal operations in terms of the mining, environmental and water legislation have to strictly comply with the suitability of such a site to be used for these facts mentioned above.
There is nearly always poor environmental performance and no or bad site rehabilitation. Again the legal operations have to have very well-defined plans on how to rehabilitate sites and legal operators have to secure a special Rehabilitation Fund for rehabilitation. Again, illegal operations do not.
The illegal non-compliant operations have unsafe, unhealthy and dangerous working conditions. The legal operations by comparison have a flood of DMRE inspectors visiting them. But our members are witnesses to the fact that no visits are paid to the illegal operations in their vicinity – clearly an indication that illegal operations are the way to go, it is cheap, no compliance, no payment of fees etc.
Payment of correct wages and other employment conditions need to be adhered to and we cannot understand why the Department of Labour and the Unions do not focus more of their attention on the informal and illegal operations. Also, they should look at the contracts between the users, often big companies, and the illegal suppliers.
Real problems
What we see when dealing with illegal mining is that there is an underground economy, a shadow economy and illegal markets. All of these result in taxes not being paid. These operations have no accounting standards and would result in breaching the financial rules, something that SARS should check.
The suppliers of machines and other suppliers who work with these illegal operators will find late payment or no payments and other unsavoury practices. It should be pointed out to the suppliers of machines and other commodities that payment is not guaranteed when it comes to dealing with illegal operators. Likewise, companies with reputable brands must be warned that they can do serious harm to their reputations by associating with illegal operators.
Then, there is the issue of transporting the materials which is a major concern in terms of damage to road infrastructure and road safety. Overloading is a major issue as it can damage roads in a short space of time. Under payment of drivers is also an issue, as is the long hours that many of the drivers are forced to work. We feel that traffic departments should intervene and the Department of Labour should send inspectors to check on driving hours, wages and conditions of service.
Those who purchase illegally mined minerals should also not be surprised to find that the aggregates supplied probably do not comply with national quality requirements and standards,” says Nico.
It is clear that illegal operations gain their price competitiveness through a number of cost cutting measures and avoidances, such as:
- Tax avoidance
- Avoiding the costs of compliance
- Having no environmental management
- Ignoring health and safety management
- Improper transportation
- No environmental levies and rehabilitation funds
- No land rehabilitation
- A lack of compliance with construction regulations and standards
- No need for social security and salaries for employees
- Little or no external waste treatment
- Free access to land
- Other taxes like land filling
- No focus on material quality management
In conclusion
In Government Gazette No 44607, dated 21 May 2021 the document titled as National Mine Closure Strategy-2020, there are various relevant and interesting comments made that have been included into document by the DMRE that we should bear in mind. It seems that this department writes about, but does not implement legislation relating to illegal mining. The closure of mines further results in the externalisation of environmental degredation which has a negative social and economic effect on surrounding communities.
The objectives
- To manage the closure of mines in a demarcated area in an integrated and sustainable manner, hence ensuring that these mines work together to achieve self-sustaining ecosystem after closure
- To ensure that mines do not impact negatively on the livelihood of adjacent/interconnected mines in a demarcated area.
- To promote a strategic approach to managing water at mining and mineral processing sites so that water is more efficiently managed and valued and to develop a post closure mine water strategy for an area.
- To make provision for post-closure stewardship and socio-economic sustainability, to continue monitoring the implementation of individual and regional mine closure plans.
Integrate environmental management and related closure activities with socio-economic interventions and aligning these with development of a post closure economy, by rationalising current wasteful spending on Environmental Management Programme (EMPR), Social and Labour Plan (SLP) and Corporate Social Investment (CSI) by reducing duplication of efforts and spending and aggregating available funding for coordinated regional projects.
It can be seen from the aforementioned that the problem lies with implementation and enforcement, rather than the legislation itself. ASPASA and its members are playing an active role in reporting illegal operations and we hope that Government will bring its part and start enforcing legislation when it comes to illegal operations.
