Wednesday, September 30, 2020

Gov’t working on legislation that compels mines to rehabilitate

Government, under the facilitation of the Economic and Legal Section of the Commonwealth Secretariat, is in the process of formulating a law that will make it a precondition for companies to show readiness on their part, to continually rehabilitate mining sites, up to the point of closure, before they could be issued with mining licenses.

John Gara, Legal Adviser from the Special Advisory Services Division of the Economic and Legal Section of the Commonwealth Secretariat, this week pointed out that although existing laws provide for financial guarantee and rehabilitation of mining sites, no provision is made to ensure that companies live up to their obligation.

Consequently, most companies end up leaving the sites in an environmentally sorry state, with the result that government is bound to expend a lot of money in trying to repair the damage visited on the environment.

At a workshop at Boipuso Hall to brainstorm on government proposal to amend existing mining laws, Nchidzi Mmolawa, Director of Minerals, at the Ministry of Minerals, Energy and Water Resources (MMEWR), stated that government has had to incur more than P20 million refilling several abandoned shafts around the Francistown area, where several companies used to mine gold. Most of these companies that undertook mining operations are nowhere to be found.

“To compound matters, some of these shafts continue to pose a threat not only to the environment, but even in relation to human life,” lamented Mmolawa.

In this respect, an incident was cited whereby one of the pillars of a building at the Nyangabgwe Referral Hospital was recently on the verge of collapsing, apparently because it was situated on top of an underground mine shaft.

Against this background, “Our role as the Commonwealth Secretariat Economic and Legal Section is to assist Botswana Government in looking at new areas not covered by existing law, and accordingly advise on the practicable way forward,” said Gara.

Thus the law being proposed seeks to put in place a scheme whereby some money is going to be set aside for the purpose of rehabilitating the mine sites, and to ensure that the mining companies would leave the area where the mining was done, in good state at the end of the prospect.

It is intended that the scheme would be designed in a way that companies cannot easily get away without fulfilling their part of the responsibility.

Gara stated that the procedure preceding financial guarantee, will be such that the applicant for a mining license, will be required to submit a plan detailing construction designs, then the cost of the whole mining project, and finally how they propose to finance the project.

In addition, he posited that a separate tabulation of the envisaged rehabilitation costs will have to be attached to the application.

This has prompted reaction from Mining Business, that the cost of rehabilitation will adversely affect their profit margins, with some proposing that Government should share the expenses.

One company lawyer who expressed interest in the issue told the Sunday Standard that it was virtually impossible for mining companies to comment meaningfully on the draft legislation without a clear understanding of the changes to the Income Tax Act ‘that will go hand in glove’ with the Mines and Minerals Act, 1999”.

The lawyer expressed the view that on account of a section in the draft, that “the minister may by regulation apply the new provisions with such modifications as he may determine, providing its not inconsistent with the Act”, existing mining companies be exempted, so that the proposed changes providing for mine sites rehabilitation and closure are not made applicable to them by regulation.

One aspect of the draft legislation, which seemed to worry business, related to a clause that stated that, should the minister not be satisfied with the data or details provided with the application for consideration he may ask for more information to be furnished by the affected company.

Former Director of Mines, Watson Gabonewe, has advised that it would be wiser to stipulate clearly what specific requirements need be met, rather than leave it to the Minister which could either result in uneven treatment of companies or create recipe for otherwise preventable queries.

“It is for this reason that we are saying that, the draft presented for discussion is merely intended as something to base our consultation with stakeholders on, and certainly, in no way a representation of Government’s final view,” said Kgomotso Abby, Director of Mines, at MMEWAR.

Concurring with Abby’s statement, the Commonwealth legal expert said there tended to be a mistaken perception that the financial will be situate somewhere away from the company’s operational capital.

Instead, the actual position is that, although clear and categorical declaration will be expected, and also reflected in the balance sheet of the company, the cost will be spread through from commencement, in the continual and ongoing financing of rehabilitation of the various areas of operation upon proceeding to the next level, well up to the point of mine closure.

The workshop was attended by a number of mining and prospecting companies as well as environmental experts.

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