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AngloGold Ashanti comments on speculation concerning underground water at its
Vaal River Operations
ANGLOGOLD ASHANTI COMMENTS ON SPECULATION CONCERNING UNDERGROUND WATER AT ITS
VAAL RIVER OPERATIONS
AngloGold Ashanti Limited
(formerly AngloGold Limited)
Incorporated in the Republic of South Africa
Registration Number: 1944/017354/06)
ISIN Number:ZAE000043485
JSE Share Code: ANG
(`AngloGold Ashanti/Company`)
ANGLOGOLD ASHANTI COMMENTS ON SPECULATION CONCERNING UNDERGROUND WATER AT ITS
VAAL RIVER OPERATIONS
There has been some speculation reported in the media about AngloGold
Ashanti`s position in regard to the cessation of the mining operations at, and
the placing into liquidation of, DRD Gold`s North West operations at
Hartebeestfontein and Buffelsfontein.
Four mining companies operate in the Klerksdorp-Orkney-Stilfontein-
Hartebeestfontein (KOSH) area: Buffelsfontein Gold Mines Limited (`Buffels`),
which owns Hartebeesfontein Gold Mine and Buffelsfontein Gold Mine; Harmony Gold
Mining Company Limited (`Harmony`); Stilfontein Gold Mining Company Limited
(`SGMC`) and AngloGold Ashanti Limited.
The mines not operated by AngloGold Ashanti are all updip of AngloGold
Ashanti`s mines and underground water, if not controlled, would flow down the
natural dip in the underground strata into the AngloGold Ashanti mines.
Consequently, the updip mines are obliged in law to continue pumping underground
water, even after their mining operations have ceased.
1 The Law
The obligations to continue pumping underground water arise under the
following statutory provisions as well as common law:
1.1 National Water Act 36 of 1998
In terms of the National Water Act, the upstream mines require a licence
in order to undertake their pumping activities. Any alteration to the pumping
activity (including cessation of those pumping activities) would only be
permissible if authorised by the relevant licence or the Department of Water
Affairs and Forestry (DWAF).
The National Water Act also imposes a relatively stringent duty of care on
the upstream mines` use of water (which includes the pumping of water from
underground) and any pollution arising from such water use. In the event that
cessation of pumping upstream causes pollution downstream, the National Water
Act obliges the upstream mines to effect reasonable measures to prevent any
pollution from continuing, occurring and recurring. Failure to implement such
measures empowers the DWAF to issue a directive to the upstream mine responsible
for causing downstream pollution. Failure to comply with that directive in turn
permits DWAF to effect the necessary reasonable measures, and to recover the
costs from the offending mine.
Furthermore, under the National Water Act, it is a criminal offence to
unlawfully and intentionally or negligently commit any act or omission, which
detrimentally affects or is likely to affect a water resource.
1.2 National Environmental Management Act 107 of 1998 (`NEMA`)
NEMA also contains a relatively stringent duty of care provisions as far
as general pollution is concerned.
1.3 Mineral and Petroleum Resources Development Act 28 of 2002 (`the MPRDA`)
The MPRDA is relevant to the closure of any of the upstream mines. Under
the MPRDA a closure certificate may not be issued unless the Chief Inspector and
DWAF have confirmed in writing that issues pertaining to health and safety as
well as management of potential pollution to water resources have been
addressed.
The MPRDA also places joint and several liability on the directors of a
company for any unacceptable negative impact on the environment, including
damage, degradation or pollution advertently or inadvertently caused by the
company which they represent or represented.
The Minister also has the power to issue a directive to the holder of a
Mining Right to take the necessary measures to stop pollution of the
environment. If the company fails to comply, the Minister may cause the
necessary measures to stop the pollution to be implemented and seek recourse
against the offending company or as stipulated under the MPRDA.
Mine Health and Safety Act 29 of 1996 (`the MHSA`)
The MHSA is relevant to the issue of actual or potential risks and hazards
to the safety of employees as well as third parties. Under the MHSA every
employer must provide and maintain a working environment that is safe and
without risk to the health of employees as well as persons who are not employees
but who may be directly affected by the activities at the mine. The obligation
includes an obligation not to expose such employees or any third parties to any
hazards to their health and safety.
Under the MHSA it is also a criminal offence to cause a serious injury or
a serious illness to a person other than an employer or an employee by way of
negligent act or omission.
1.5 The Common Law
In the event that the updip mines threaten cessation of pumping activities
or indeed cease pumping activities, provided Anglogold Ashanti can show that in
consequence its property may or in fact does suffer harm, there would be
sufficient basis for AngloGold Ashanti to approach a Court for an interdict
ordering the responsible upstream mines to continue pumping activities.
2 AngloGold Ashanti`s Response
From this it is clear that the legal obligation to continue pumping rests
with the mines updip. AngloGold Ashanti is not willing to assume this
liability, the cost of which we estimate at R85 million a year. AngloGold
Ashanti is already participating in the KOSH water forum which is examining long
term solutions to the region`s water problems and will continue to do so. We
will, however, also continue to expect other mining companies to continue to
meet their legal obligations. AngloGold Ashanti takes the view that an act of
liquidation cannot be utilised to
avoid statutory obligations.
ends
Johannesburg
6 April 2005
Date: 06/04/2005 01:00:08 PM
Produced by the JSE SENS Department
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