NATURAL CAPITAL

KEY FEATURES

• Waste licence obtained at Zondereinde salvage yard
• Use of hydropowered equipment and backfill results in savings of 31 506MWh annually at Zondereinde
• Panel management system fully implemented at Booysendal
• Power factor correction equipment results in savings of between R1.3 million and R2.0 million
• Buttonshope Conservancy Trust in place to at Booysendal

APPROACH

Competition for resources such as land, water, energy and fuel is becoming progressively more robust in South Africa. In terms of environmental custodianship, Northam has identified these resources as its highest priorities with its most significant challenges being their conservation and optimal use.

The health, safety and environmental (HSE) committee is responsible at board level for overseeing environmental matters. As a matter of course, environmental management issues are reported to the operational general managers and the chief executive on a monthly basis, and on a quarterly basis to the board’s HSE committee. The chief executive and general managers of Zondereinde and Booysendal have final accountability for environmental compliance and performance.

At Zondereinde and Booysendal, environmental issues are dealt with by a specific management team. At Zondereinde, in particular, the environmental management function and engineering services are inextricably intertwined, given the Zondereinde operation’s reliance on technology, which is applied in many instances, specifically to creating environmentally safe working areas. The engineering department is responsible for overseeing this function under the guidance of the engineering manager who is supported by the environmental officer. The safety, health and environmental manager at Booysendal heads this process and is supported by environmental staff.

At Booysendal, the mine management team is responsible for looking after only approximately 8% of the mine’s freehold area. The balance of the land (approximately 6 200 hectares) is managed by a dedicated land manager and, of this, 960ha is under the custodianship of the Buttonshope Conservancy Trust, an offset area which was created under the stewardship of former chief executive, Glyn Lewis, and which has been set aside specifically for conservation and biodiversity purposes.

LEGISLATION AND COMPLIANCE

South Africa has a strict environmental legislative framework and this is governed by the following:

• Constitution of the Republic of South Africa No 108 of 1996
• Mineral and Petroleum Resources Development Act No 28 of 2002 (MPRDA)
• National Environmental Management Act No 107 of 1998 (NEMA)
• National Environmental Management: Waste Act No 59 of 2008
• National Environmental Management: Waste Act No 59 of 2008
• National Environmental Management: Biodiversity Act No 10 of 2004
• National Heritage Resources Act No 25 of 1999
• National Environmental Management: Air Quality Act No 39 of 2004
• National Water Act No 36 of 1998

Care has been taken to uphold Northam’s compliance with South Africa’s environmental and mining legislative framework. The company is committed to prudent practices and usage of natural resources, in accordance with NEMA, and this is outlined in its environmental policy.

At Zondereinde and Booysendal, a precautionary environmental approach has been taken – aligned with NEMA and Northam’s own environmental management systems (EMS).

Management at both operations engage regularly with regulatory authorities including the DMR and the Department of Water Affairs (DWA) and other relevant departments. New mining projects are subject to environmental impact assessments (EIAs) which involve thorough public participation and many studies to assess environmental aspects such as air, water, land, flora and fauna. These EIAs become part of the mines’ approved environmental management plans or EMPs. EMPs provide guidance in monitoring, addressing and mitigating environmental impacts. Routine audits are undertaken to ensure compliance with the EIAs and EMPs. Northam has the requisite permits for Zondereinde and Booysendal in terms of new order mining rights and integrated water use licences.

Zondereinde has recently completed a revised EMP application in line with the DMR’s requirement to consolidate its original document and three amendments for the UG2 stockpile, coal-fired boilers and the slag dump. The mine is awaiting approval from the DMR.

In compliance with the amendment to the NEMA: Air Quality Act, which came into effect in 2013, Northam has submitted an application for an atmospheric emission licence for the Zondereinde operations as well as a request for exemption from the requirement to reduce sulphur dioxide (SO₂) emissions by 2020, based on affordability and the historic dispersion of SO₂ at Zondereinde which has been significantly lower than the licensed limits.

Northam is a member of the South African Waste Information System (SAWIS) developed by the DEA, and both Zondereinde and Booysendal are registered with SAWIS. The company complies with the monitoring and management processes of hazardous waste in terms of recovery, recycling, treatment, disposal and exportation.

Northam did not receive any significant fines or non-monetary sanctions for non-compliance with environmental laws and regulations.

In January 2014, waste water (6 234m³) from the sewage treatment plant at Zondereinde was discharged directly into the Bierspruit, following above-average rainfall, as the evaporation dam and settling ponds were near full capacity due to fissure water being pumped and no consumption during the extended strike. Although this incident was reported to the DWA, the discharge volume was within the 1 000 000m³ provided for in section 7 of the water licences. As such no fine was issued and no administrative action was taken.

No grievances regarding environmental impacts were received during the year.

ISO14001

Northam has adopted the ISO14001 standard as the basis for its EMSs. The Zondereinde mine has been ISO14001-certified since 2011. A re-certification process conducted in February 2014, identified seven non-conformances. These were rectified and recertification was issued on 12 May 2014 until 2017.

Procedures, aspect and impact identification are currently underway for the implementation of ISO14001 at the Zondereinde metallurgical complex with a view to completion in mid-2015. A gap analysis will then be conducted and an application for certification of the plant will be submitted as soon as identified shortcomings have been addressed.

While the ISO14001 standard is taken into account in managing environmental issues at Booysendal, a formal ISO14001-compliant EMS is not yet in place at this operation.

F2014 PERFORMANCE

Zondereinde

Water and energy consumption continue to be the most pressing environmental management concerns at Zondereinde. Efforts to reduce consumption are assessed and implemented continuously.

Zondereinde was granted a waste licence for the salvage yard although local interested and affected parties did raise concerns about community job creation. An external audit was conducted on 19 August 2014.

Zondereinde recorded one reportable environmental incident in the year under review but did not incur a fine.

Booysendal

During F2014, Booysendal implemented a number of projects to reduce the impact of operational activities on the environment.

In order to ensure that hydraulic and motor oil is not released into the surrounding area and water system, extra sumps are in the process of being installed into the storm water system to capture the oil and separate it from the system before the surface water run-off reaches the pollution control dams.

Biodegradable tablets, known as ECO tablets, have been introduced into the main pollution control dam. These tablets assist in maintaining water quality of the dam within the required limits of the water use licence.

Three annual audits were conducted at Booysendal during the year, these include:

• An annual performance assessment of the EMP as required by the MPRDA.
• The first ever performance assessment of the EIA as required by NEMA.
• An annual audit of the new water licence

No reportable environmental incidents were recorded at Booysendal during the year.

RESOURCE UTILISATION

As a mining company, Northam is mainly reliant on natural resources – water, energy and bulk materials. Bulk materials comprise mined and processed rock, liquid fuels, coal, grease, steel, timber, lubricating and hydraulic oils as well as diesel. Zondereinde and Booysendal take pride in utilising resources efficiently and recycling materials like plastics, steel, timber and scrap.

MATERIALS USED AT ZONDEREINDE IN F2014

	Unit	F2014	F2013	F2012	F2011
Rock mined	000t	1 907	2 276	2 154	1 801
Ore milled	000t	1 724	2 116	1 934	1 591
Timber use (bulk support)	m3	2 412	1 573	827	754
Cartridge explosives	t	2 076	2 401	2 552	2 010
Oxygen	t	1 722	1 561	2 018	2 461
Sulphuric acid	t	586	520	769	747
Sulphur dioxide	t	61	56	82	90
Grease	t	34	47	47	41
Lubricating and hydraulics oils	l	130 618	130 270	135 155	112 311
Diesel	l	648 709	635 739	576 079	500 639

MATERIALS USED AT BOOYSENDAL IN F2014

	Unit	F2014	F2013
Rock mined	000t	1 233	755
Ore milled	000t	1 517	261
Emulsion explosives	t	960	284
Lubricating and hydraulics oils	l	640 192	83 314
Diesel	l	1 830 066	1 745 435

WATER USE

Northam recognises the importance of optimising its water usage through reuse and recycle processes, especially as a large volume of water is used for the mining and processing of minerals. The vital role water plays is highlighted in regular water awareness campaigns.

Two primary water sources contribute to Northam’s water consumption at both Zondereinde and Booysendal, namely industrial and potable water. Northam’s source of potable and industrial water is from Magalies Water at Zondereinde and the Lebalelo Water User Association at Booysendal – Northam has contracts with both companies in this regard.

Zondereinde

Zondereinde’s integrated water licence was granted in May 2012. The mine has since applied for relaxation of certain standards and requirements. In September 2013, the DWA conducted a compliance audit on Zondereinde’s water use licence and the mine submitted an annual water management report to the DWA in December 2013. On 11 August 2014, Zondereinde received feedback from the DWA, requesting further assessment by a specialist.

Water is fundamentally important for Zondereinde mine, not only from an environmental and permitting perspective, but also operationally. Through a shaftbased hydropower system, the mine uses water as its primary source of energy for its direct mining operations underground. These technical innovations were pioneered at Northam and refined over time. Hydropowered equipment has the advantage of reducing the temperatures in the working areas. This technology, used in conjunction with the strategic application of backfill helps to lower underground temperatures by reducing heat ingress from workedout areas while also reducing the size of the area to be cooled by 65%.

Zondereinde endeavours to run a zero discharge operation and closely monitors any potential impact of its operations on surface and groundwater sources. The water bodies that could be affected by surface water discharges are the Crocodile River and the Bierspruit River.

Extensive monitoring is undertaken and a comprehensive groundwater model, developed and maintained by a third party consultant, has been in place for nine years. This consultant also monitors and advises on surface and groundwater quality control.

The only significant water discharge during the year was from the sewer plant into the Bierspruit, as described in more detail above. In terms of the water use licence, 1 000 000m³ of water is allowed to be discharged annually.

Booysendal

Water allocation is also of critical importance at Booysendal. The integrated water use licence requirements guide water management processes, especially in terms of water allocation. This licence is reviewed every five years from the date of issue. Water quality at Booysendal is monitored on a continuous basis and compared with the original base line study information.

The Lebalelo pipeline is the main source of industrial and potable water at Booysendal, which could be supplemented with on-site boreholes. The mine currently holds a 20-year licence to extract water from boreholes should additional water be required. The Groot Dwarsrivier is the only water source that could potentially be affected by the withdrawal of water from the boreholes. However, as a limited volume of water is currently being drawn from this source, there is no risk.

Nevertheless management is vigilant about the potential for any contamination risk, and closely monitors the conservation processes and water reduction practices, along with checking water levels in the pollution control dams, which could result in discharges or run-off.

The Groot Dwarsrivier and the Der Brochen Dam are the only at-risk water bodies. Management has an emergency preparedness programme in place to address any run-off or spillages, which includes a stakeholder schedule along with emergency remediation measures. Three water evaporators have been installed at the pollution control dams to mitigate the effects of excessive rainfall during the rainy season.

Industrial water at Booysendal is maintained within a closed circuit and recycled on an ongoing basis.

ENERGY CONSUMPTION

In South Africa, electricity is supplied by Eskom, the national electricity supplier. In recent years, Eskom’s tariffs and supply shortages have increased steadily, by 16% in 2012, 8% in 2013 and 9% in 2014. For F2014, Northam’s electricity spend totalled R424.9 million (85% at Zondereinde and 15% at Booysendal).

In terms of its overall focus on efficiencies and avoidance of waste, the company’s energy reduction initiatives (such as a move to using electricity at low-peak periods to reduce the strain on the national grid during high-peak periods) have been ongoing for many years.

At current capacity at Zondereinde, Eskom’s supply is currently sufficient. Nevertheless, power requirements are not static, given the deepening project and the smelting of additional material from Booysendal. Zondereinde, therefore, has to concentrate on energy efficiency rather than outright quantity. To this end, a number of initiatives have been implemented, such as an underground refrigeration plant and fan clipping.

With the refrigeration plant being moved underground water is not required to be pumped to surface, which immediately provides some savings: one refrigeration machine fulfils the function of two 2MW pumps. It is estimated that R22.8 million could be saved annually.

The company’s use of hydropower has also reduced its reliance on Eskom as the primary energy source. As a result, less electricity is required for production than other platinum mines on compressed air to power underground equipment. The use of hydropowered equipment and backfill has led to annual power savings of 31 506MWh.

Booysendal currently has sufficient power to continue operating, with one incoming Eskom line and transformers capable of sustaining 80MVA. The maximum demand at the moment is 29MVA.

ELECTRICITY CONSUMPTION (MWh)

	Zondereinde			Booysendal
	F2014	F2013	F2012	F2014	F2013
Energy from electricity purchased by shafts	470 117	485 654	461 484	35 251	6 726
Energy from electricity purchased by plants	108 600	101 732	125 548	57 515	7 533
Total electricity purchased	578 717	587 386	593 441	92 766	14 259

Power factor

Power factor correction equipment is in place at both Zondereinde and Booysendal to reflect the correct power consumption and reduce the overall electricity bill. Power factor correction was upgraded at Zondereinde to the value of R4.0 million. At Booysendal, power factor correction equipment was installed during the construction phase.

A study conducted by DRA Mineral Projects indicates that the annual estimated saving per substation is between R1.3 million to R2.0 million.

Zondereinde recorded an overall decrease in energy consumption in F2014 – attributed to the 11-week strike as well as the furnace rebuild. The company’s long-term strategy is based on energy efficiency rather than energy reduction as the mines continuously strive to replace ore reserves and require more energy for production. The energy efficiency strategy is continuously reviewed in order to optimise its effectiveness.

See our Energy conservation projects below.

Zondereinde

Apart from the measures mentioned above, no further energy saving initiatives were introduced at Zondereinde in F2014. Two independent parties reviewed the mine’s energy consumption; no viable, cost-effective solutions which do not pose any safety risk to employees, was found.

In F2014, total indirect non-renewable energy consumption of electricity sourced from the national grid at Zondereinde decreased by 1.48% to 578 717MWh (F2013: 587 386MWh). This was mainly due to loss in production days as a result of the 11-week strike as well as the furnace rebuild, offset by an increase in smelting activities from processing Booysendal’s production.

Booysendal

Given the strain on South Africa’s energy utility Eskom, energy efficiency has and will continue to be a priority at Booysendal. A panel management system which assists with the protection and annual testing of the medium voltage network, and fault analysis has been fully implemented and operational since June 2014. A monthly report on the findings is presented by the engineering department. Going forward, this system will allow Booysendal to identify areas where electricity savings may be affected.

In F2014, total indirect non-renewable energy consumption from electricity sourced from the national grid increased by 551% to 92 766MWh (F2013: 14 256MWh) owing to the ramp-up.

A solar-aided water heating system at the mine’s change house is in place to conserve energy.

CLIMATE CHANGE AND EMISSIONS

Climate change has increasingly become an area of concern for mining companies with the many regulations governing environmental management. At Northam, climate change has been assessed as a moderate risk managed primarily through the company’s energy conservation initiatives. In addition, PGMs are used in the production of technologies to reduce emissions thus limiting the climate change risk.

Northam has considered the risks and opportunities relating to climate change, including the financial implications, in its sixth consecutive voluntary submission to the Carbon Disclosure Project (CDP).

Northam reports on emissions of carbon dioxide (CO₂) and SO₂, the most significant of its emissions.

In F2014, 4 807 tonnes of SO₂ were emitted by the Zondereinde operations attributed to direct emissions from the smelter. These emissions comprise SO₂ (directly from the smelting operations), CO₂ (both direct and indirect), potential discharges to water courses and dust from tailings dams.

As mentioned earlier, Northam has applied for an atmospheric emission licence at Zondereinde, which requires an amendment to be submitted by the end of November 2014. The company has also applied for exemption from the requirements for SO₂ emissions.

Zondereinde’s energy efficiency programmes have reduced the mine’s GHG emissions.

ENERGY CONSERVATION PROJECTS

GREENHOUSE GAS EMISSIONS (CO₂e TONNES)

	Zondereinde				Booysendal
	F2014	F2013	F2012	F2011	F2014
Total Scope 1 emissions (direct emissions)	23 451	15 509	15 401	14 432	4 912
Total Scope 2 emissions (indirect emissions)	596 079	605 008	611 244	619 947	95 549
Total Scope 3 emissions (indirect emissions)	580	665	815	1 089	103
Total emissions	620 110	621 183	627 460	635 468	100 565

Dust management

Due to the nature of its operations, Zondereinde monitors dust fall-out and its stakeholder engagement programme is effective in dealing with any incidents and complaints logged. Since inception, Zondereinde has had no such complaints.

The tailings dam is continuously revegetated to reduce dust entrainment, and to minimise wind and water erosion.

Previously exposed areas at Booysendal have been paved, tarred or grassed, and the few areas where dust could be produced, are monitored and dust suppression is conducted as needed.

Continuous dust fall-out monitoring at Booysendal is conducted at potential receptor sites around the Booysendal operation. Monitoring results indicate that dust fall-out within these areas is well within residential dust fall-out limits.

The mine’s location in a valley surrounded by mountains means that dust dispersion into the surrounding communities is limited. No community or stakeholder complaints were received regarding dust emissions during the year.

LAND MANAGEMENT AND BIODIVERSITY

Northam acknowledges that biodiversity entails careful land management, especially with mining processes that could have an adverse impact on the environment. Careful planning for new mining projects, engagement with stakeholders and the surrounding community, and compliance with legislation could also add value to the mining process and prove beneficial in land management.

Zondereinde

No animals or plants in the area are listed on the IUCN’s Red List of Threatened Species nor the Red Data list.

Land management and conservation at Zondereinde is simpler than it is at Booysendal for a number of reasons, including the fact that the required policies and practices have been established and entrenched over the years.

Northam’s land ownership of Zondereinde is larger than the actual mining operations, with a surface freehold of approximately 4 439 hectares.

Final rehabilitation of Zondereinde’s tailings storage facility will only take place after closure. However, ongoing rehabilitation continues for dust management as well as aesthetic reasons. The total rehabilitation and closure costs for F2014 were R6.4 million.

Booysendal

Booysendal’s host area, the Dwarsrivier Valley, is situated within the Sekhukhuneland Centre of Plant Endemism and the Roossenekal Subcentre of Endemism. The Booysendal property encompasses several landscape types, which are critically important for conservation action – Mpumalanga’s conservation authorities actually prioritise these areas.

The Dwarsrivier Valley is unique as the landscape includes forests, small wetlands, seepages and grasslands. Certain protected mammals and species of fish have also been recognised as endemic to this habitat. Research has also indicated that the threatened SCPE is not formally protected, and that more land needs to be incorporated within reserves to protect the province’s biodiversity.

In the spirit of preserving the biodiversity of the area, a creative approach was adopted to generate long-term funding to support the protection of the environment surrounding Booysendal. A key result was the Buttonshope Conservancy Trust, which funds Booysendal’s conservation, offset management and expansion.

Rehabilitation and closure costs at Booysendal amounted to R2.9 million in F2014.

While Zondereinde’s operational footprint has been reduced, including the processing of waste rock, the unused footprint has not been rehabilitated. Several years ago, the borrow pits at the village and turn-off to the smelter plant were rehabilitated, and rubble heaps at the entrance to Setaria were levelled and covered with topsoil so that the area could be rehabilitated to a more natural state.