Acid Mine Drainage (AMD) has been the subject of much discussion on the Witwatersrand recently. There is talk of the downtown Standard Bank offices being flooded and flora and fauna being destroyed in what may be somewhat ironically called the Cradle of Humankind and the Government is viewed as inadequately dealing with what may be a major environmental disaster.

With alarms like this sounding, the pressure on Government as a result of its apparent unwillingness to find a solution is understandable. For many, it seems that the teeth of South Africa's stringent environmental laws have potentially failed to bite down on mining companies when it comes to addressing AMD. There are calls for political intervention.

AMD is particularly common in historical gold and coal mining areas including the three separate basins in the Witwatersrand which have been identified as priority areas. Rock exposed during mining activities contains pyrite (a mineral consisting of iron sulphide) which is oxidised to form iron oxide when it comes into contact with oxygen. Old mine shafts and tunnels collect water underground and when that water comes into contact with iron oxide, sulphuric acid is formed. Where no pumping or treatment occurs (as is frequently the case where now-closed mines are concerned) the acidic water containing salts, iron and other heavy metals completely fills the shafts and tunnels and thereafter it starts to decant into the surface environment, creating what is known as AMD.

The highly anticipated AMD Report was finally published by the Department of Water Affairs on 24 February 2011.

Prepared for a so-called Inter-Ministerial Committee on AMD, the Report was compiled by a team of experts chaired by the Directors General of Mineral Resources and Water Affairs.

The Report notes various risks and concerns relating to AMD, including those directly relating to flooding of mines and those to the environment generally. In particular, mine flooding may result in contamination of shallow groundwater resources required for agricultural use and human consumption, geotechnical impacts, such as the flooding of underground infrastructure in areas where water rises close to urban areas and increased seismic activity which could have a moderate localised effect on property and infrastructure. Potential environmental impacts include serious negative ecological impacts, regional impacts on major river systems and localised flooding in low-lying areas. The Report proposes various solutions, the effectiveness of which will need to be determined.

Many would argue that it is too little too late and that the Government has perhaps failed to act in a manner consistent with its Constitutional obligations, which require it to afford every person an environment that is not harmful to their health or wellbeing. If AMD has the impacts predicted, an environment which is not harmful to health and wellbeing cannot be guaranteed.

In addition to considering individual solutions for the different basins affected, the Report urgently proposes the implementation of ingress control measures aimed at reducing the rate of flooding and the eventual decanting and pumping volume. It is anticipated that this will assist in reducing the volume of water that needs to be treated and will consequently reduce the operational costs of AMD management.

Who fits the bill however? Considerable costs will be incurred in addressing the AMD problem, and Finance Minister Pravin Gordhan has allocated R3,6 billion for water infrastructure and services for the 2011/2012 financial year including "funding for the acid water drainage threat associated with abandoned underground mines". A further environmental levy for operating mines has also been proposed for investigation. Although it cannot be disputed that AMD is a serious issue which requires significant intervention, the potential impacts (particularly for investors) of an environmental levy on existing mining companies already required to pay royalties must be carefully considered. This levy is apparently proposed notwithstanding the retrospective liability imposed by the duty of care contained in the National Environmental Management Act, 1998. One wonders whether the practical difficulties attaching to the implementation of that liability (such as tracking down and seeking recompense from the operators of historical mines notwithstanding the profits gained by them) are not failing its application.

In applying environmental law, the Minister of Water Affairs has indicated that her Department will issue a notice to previous and extant mining companies in the Central and Eastern basins preventing these mines from polluting water resources as a result of their activities.

Ultimately, improved water quality management is crucial as AMD is an on-going problem and it is necessary to develop and implement measures to treat the acid mine water to a quality that will be fit for a predetermined use or for discharge into surface streams. This is foreseen as part of a long-term solution to AMD.

Written by By Justine Sweet, Senior Associate in the Environmental Practice and Cara Gilmour, Candidate Attorney, Finance Projects and Banking Practice at Cliffe Dekker Hofmeyr