A critical review of the impact of South Africa’s mine closure policy and the winding-up process of mining companies

Abstract

We reviewed South Africa's legal frameworks relating to mine closure, the windingup of gold mining companies and the impact of sudden closure on the environment and communities.Method: This review built on and extended previous systematic reviews. We focused on the regulation for financial provisioning for prospecting, mining, exploration and rehabilitation. Two examples of gold mining companies that were closed prematurely were examined. We also reviewed the mine closure and environmental policies of other countries, notably Australia and Canada and noticed similarities to South African policies.Results: Differences are evident in the enforcement of compliance in Australia and Canada, which are more proactive in dealing with the challenges of winding-up and its impacts. Conclusion:South Africa could adopt these countries' models to enforce compliance and proactivity regarding sudden mine closure. One recommendation is to establish a fund for immediate rehabilitation in such cases as part of the temporary mine closure framework.

Non-Renewable Resources and Sustainable Resource Extraction: An Empirical Test of the Hotelling Rule’s Significance to Gold Extraction in South Africa

“…A number of concerns have been raised over the future of several leading gold mines in South Africa. Most mining operations are viable for a period of 30 years, depending on the mineral extracted and the available reserves [16]. Most reserves are already exhausted, and the costs involved in mining lower grade ore, as well as deposits located very deep in the earth, are becoming excessive.…”

“…In 2009, it closed the Evander shaft numbers 2, 5, and 7 in the Mpumalanga province and several other shafts in its mines in the Free State province [18]. Moreover, the rate of decline in the reserves of several mines owned by the three giants gives them less than ten years of continued production; moreover, about one-tenth of these reserves are in the form of mine dumps from which gold is being recovered [16]. South Africa's gold reserves (gold in the ground that can be extracted profitably) are becoming depleted at a rate that, within 25 to 33 years, will mean the end of the industry on which South Africa's economy has been built [13,15,19,20].…”