financial provision report with respect to sanral … of borrow pit 111215_az... · 2017-06-13 ·...

Financial provision SANRAL Borrow Pit at Penhoek –December 2015

Coastal & Environmental Services SANRAL: Financial Provision i

FINANCIAL PROVISION REPORT WITH RESPECT TO SANRAL PENHOEK

BORROW PIT

Prepared by:

EOH Coastal & Environmental Services

GRAHAMSTOWN P.O. Box 934,

Grahamstown, 6140 South Africa

December 2015

Prepared for:

SANRAL Southern Region P O Box 27230

Greenacres, 6057 South Africa


Coastal & Environmental Services SANRAL: Financial Provision ii

This Report should be cited as follows: Coastal & Environmental Services December 2015. Financial Provision Report with respect to Borrow Pit associated with the NR6, Section 4 at Penhoek Pass, CES, Grahamstown.


Coastal & Environmental Services SANRAL: Financial Provision iii

THE PROJECT TEAM

Ms. Lara Crous (Cand. Sci.Nat.) Senior Environmental Consultant Lara holds a BSc (Environmental Science and Geography) as well as a BSc Honours (Environmental Science) from Rhodes University. Her honours thesis evaluated Grahamstown’s Municipal water supply, focussing on aluminium for which she received a distinction. She is currently writing up her MSc (fisheries science) thesis on using constructed wetland technology in the treatment and beneficiation of brewery effluent. Lara presented her preliminary results at the International Water Association’s conference on Wetland Systems for Water Pollution Control in Venice (2010) and will present a case study titled “Turning of Industrial Wastewater into Irrigation water” at the constructed wetlands conference in Johannesburg later this year. With interests in environmental, municipal and effluent water quality, Lara has worked on and managed various EIA’s relating to mining, wind energy facilities, upgrading of roads as well as agri-production projects in South Africa, Mozambique as well as Cameroon. Lara is also experienced in undertaking water use licence applications, mining applications and environmental control officer / auditor duties.

Ms Ayanda Zide, Environmental Consultant Ayanda holds a BSc in Botany, Microbiology and Chemistry and a B.Sc. (Hons) in Botany where her thesis focused on identifying and characterising galls and gall forming insects and associated pathogens (Fungi) on the mangrove species Avicennia marina. Courses in her honours year included Diversity Rarity and Endemism (DRE), Pollination Biology, Estuarine Ecology, Rehabilitation Ecology, a Stats course and a short GIS course. Her research interests lie in biological invasion, conservation, rehabilitation ecology, plant biotechnology and water research. Ayanda conducts vegetation and impact assessments that guide proposed developments to reduce their impacts on sensitive vegetation. As part of these surveys she identifies and maps the vegetation communities and areas of high sensitivity. She has worked as a botanical assistant on the Lesotho Highlands Development Authority botanical baseline survey and has conducted groundtruthing surveys for developments in the Eastern Cape.


Coastal & Environmental Services SANRAL: Financial Provision iv

TABLE OF CONTENTS

1. INTRODUCTION .............................................................................................................................. 5 PROJECT BACKGROUND .......................................................................................................... 5 1.1

DESCRIPTION OF CURRENT CONDITIONS............................................................................... 5 1.2

2. LEGISLATION .................................................................................................................................. 7 3. PROCEDURE TO DETERMINE THE QUANTUM FOR FINANCIAL PROVISION ................................ 9

PROCEDURE TO DETERMINE THE QUANTUM FOR FINANCIAL PROVISION ....................... 9 3.1

QUANTUM FOR FINANCIAL PROVISION FOR THE BORROW PIT ASSOCIATED WITH THE 3.2

NR6, SECTION 4 at PENHOEK PASS ....................................................................................................... 9 3.2.1 Step 1: Determine primary mineral and sealable mineral by-products ......................... 9 3.2.2 Step 2: Determine risk class of mine ....................................................................................... 9 3.2.3 Step 3: Determine the area sensitivity ................................................................................... 9 3.2.4 Step 4.1: Determine level of information ............................................................................ 10 3.2.5 Step 4.2: Determine the closure components ................................................................... 10 3.2.6 Step 4.3: Determine the unit rates for closure components ........................................... 11 3.2.7 Step 4.4: Determine and apply the weighting factors..................................................... 11 3.2.8 Step 4.5: Identify area of disturbance ................................................................................. 11 3.2.9 Step 4.6: Identify closure costs from specialist studies ...................................................... 11 3.2.10 Step 4.7: Calculate closure costs ......................................................................................... 11

LIST OF TABLES

Table 1: Closure components ................................................................................................................. 10 Table 2: Closure costs: Maintenance and Aftercare ......................................................................... 11

Financial provision SANRAL Borrow Pit at Penhoek – December 2015

Coastal & Environmental Services 5 SANRAL: Financial Provision

1. INTRODUCTION

PROJECT BACKGROUND 1.1

The road upgrade of the National Route 6 section 4, Penhoek Pass (between Kilometers 52.0 and 66.2), between Queenstown and Jamestown in the Eastern cape province resulted in the extension of an existing borrow pit to provide building material for the road upgrade. The borrow pit is situated on portion Remaining Extent of Farm Valschfontein No.180. This borrow pit was mined for weathered dolerite to a depth of 2 - 5 metres and had a foot print of 5.3 ha. Mining of the borrow pit ceased in February 2015 and rehabilitation of the pit started at this time (February 2015) Rehabilitation in this area has been on-going.

DESCRIPTION OF CURRENT CONDITIONS 1.2

The mine is no longer operational, and all equipment and infrastructure have been removed from the site. The mining of material from the borrow pit ceased in February 2015, due to enough material having being obtained for the Rehabilitation of the N6 section 4 at Penhoek Pass. Plate 1-1 below illustrates the general area where the borrow pit was located. Rehabilitation of the area included the following:

Filling of the borrow pit with overburden, soil and crushed concrete aggregate.

Hazardous waste such as contaminated soils were safely removed and disposed of at an appropriate facility that accepts hazardous waste.

The ground at the borrow pit site was levelled and re-shaped.

Alien vegetation from the stockpiles and surrounding areas (road verge) was removed.

The area was hydro-seeded (October 2015) with Indigenous grasses which included (Eragrostis tef, Eragrostis curvula, Cynodon dactylon, Cenchrus ciliaris, Panicum maximum, Chloris gayana, Anthephora pubescens, Digitaria eriantha) to allow for the establishment of vegetation on the disturbed area.

Erected structures and storage units on the site have been dismantled and removed.

Due to Rehabilitation being a process which takes time, an after care of a minimum of 2 years after the mining of the borrow pit will be put in place to ensure that the area is left in a manner which the area has an established vegetation cover, all risks associated with the area have been minimised or eliminated and the area is integrated back with the surrounding area.

The South African National Roads Agency (SANRAL) is requesting a closure certificate for the borrow pit to be granted. The objectives of phased closure are:

To ensure the site is contoured and covered with locally occurring indigenous vegetation.

To ensure the closed borrow pit does not poses any health, environmental or safety risks.

To ensure closure complies with the Mineral and Petroleum Resources Development Act 28 of 2002.

EMP of the project covers other project activities which are not part of the Borrow pit closure, thus only activities relevant to the rehabilitation of the Borrow pit are considered in this project.


Site photographs

Plate 1-1: Site Photographs of the Borrow Pit area

N W E S 31°28'47.3"S; 26°42'45.5"E


2. LEGISLATION The relevant sections within the MPRDA (Act 28 of 2002) that deal with the financial provision are as follows:

Section 41(1), requires that an applicant for a prospecting right, mining right or mining permit must, before the Minister approves the environmental management plan or the environmental management program (EMP) in terms of section 39(4), make the prescribed “financial provision” for the rehabilitation or management of negative environmental impacts,

Section 41(2) provides that, if the holder of a prospecting right, mining right or mining permit fails to rehabilitate or manage, or is unable to undertake such rehabilitation or to manage, any negative impact on the environment, the minister may, upon written notice to such holder, use all or part of the financial provision to rehabilitate or manage the negative impact in question,

Section 41(3) requires the holder of a prospecting right, mining right or mining permit to annually assess his or her environmental liability and increase his or her financial provision to the satisfaction of the minister, and

Section 45, allows the minister to recover costs in the event of urgent remedial measures.

The financial provision required to be submitted by the holder of a prospecting right, mining right or mining permit (in the terms of Regulation 53 of the MPRDA Act 28 of 2002) is to achieve the total quantum for rehabilitation and remediation of the environmental impacts and associated damage as well as close-out must be provided for by one or more of the following methods:

Approved contribution(s) to a dedicated trust fund as provided for in terms of section 10(1)(cH) of the Income Act, 1962;

A financial guarantee from a South African registered bank or other bank or financial institution approved by the Director-General, guaranteeing the financial provision relating to implement the EMP in the format approved by the Director-General from time to time;

A deposit into the account specified by the Director-General in the format as approved by the Director General from time to time; or

Any other method as the Director-General may determine.

Regulation 54 requires that the quantum of financial provision, to be approved by the minister, must be based on the requirements of the approved EMP and shall include a detailed itemisation of all actual costs required for;

1. Pre-mature closure regarding; - The rehabilitation of the surface of the area; - The prevention and management of pollution of the atmosphere; - The prevention and management of pollution of water and the soil; and - The prevention of leakage of water and minerals between subsurface formations

and the surface. 2. Decommissioning and final closure of the operation; and 3. Post closure management of residual and latent environmental impacts.

The holder of a prospecting right, mining right or mining permit (in this case holder of the EMP) is required to annually assess the total quantum of environmental liability for mining operation and ensure that financial provisions are sufficient to cover the current liability (in the event of premature closure) as well as the end-of-mine liability. This is referred to as the “window in time or snapshot in time approach “as each assessment provides an indication of the environmental liability at that time only. The holder will also provide, on an annual basis, an indication of the end-of-life environmental liability.

Coastal & Environmental Services SANRAL: Financial Provision 8

Group five Civil Engineering (Pty) Ltd on behalf of SANRAL contacted EOH Coastal & Environmental Services (CES) to provide a financial provision report for the closure application. Coastal and Environmental Services (CES) carried out a site visit investigation, in order to:

Assess the current status of the mine and rehabilitation of the operation.

Provide a breakdown of all rehabilitation and after care costs for the borrow pit in its current state.


3. PROCEDURE TO DETERMINE THE QUANTUM FOR FINANCIAL PROVISION

PROCEDURE TO DETERMINE THE QUANTUM FOR FINANCIAL PROVISION 3.1

The procedure to determine the quantum for financial provision was aligned with the Guideline document for the evaluation of the quantum of closure – related financial provision provided by a mine (Department of Minerals and Energy, January 2005). This is an official guideline as contemplated in Regulation 54(1) to the Mineral and Petroleum Resources Development Act, 2002 (Act 28 of 2002). This costing exercise involved undertaking the following steps: Step 1: Determine primary mineral and sealable mineral by-products Step 2: Determine risk class of mine Step 3: Determine the area sensitivity Step 4: For class A and B mines and preferred route Class C mines

Step 4.1: Determine level of information Step 4.2: Determine the closure components

Step 4.3: Determine the unit rates for closure components Step 4.4: Determine and apply the weighting factors Step 4.5: Identify area of disturbance Step 4.6: Identify closure costs from specialist studies Step 4.7: Calculate closure costs

Step 5: Operational route for Class C mines Step 5.1: Determine minimum rate per hectare for closure Step 5.2: Determine overall area of mining operation Step 5.3: Calculate closure costs

Step 6: Commission independent review (if required)

QUANTUM FOR FINANCIAL PROVISION FOR THE BORROW PIT ASSOCIATED 3.2WITH THE NR6, SECTION 4 at PENHOEK PASS

3.2.1 Step 1: Determine primary mineral and sealable mineral by-products Dolerite is a mineral related to quarrying. There are no saleable by-products from the mine process.

3.2.2 Step 2: Determine risk class of mine As per table B.13 on page 25 of the Guideline document, Dolerite has a primary risk rating class of ‘C’ (low risk)

3.2.3 Step 3: Determine the area sensitivity This was done by assessing and ranking the sensitivity of the area by individually assessing the biophysical situation, then the social situation and then the economic situation.

Sensitivity Biophysical Social Economic

LOW Limited natural fauna and flora remains

Alien plant species evident

Largely disturbed from natural state

The local communities are not within sighting distance of the mining

The area is insensitive to development

The area is not a major source of income to the local communities


operation.

Lightly inhabited area (rural)

3.2.4 Step 4.1: Determine level of information

Information available about the borrow pit is extensive, due to the available authorised EMP, a detailed closure plan and detailed breakdown of the costs envisaged for rehabilitation and closure.

3.2.5 Step 4.2: Determine the closure components

This is based on the type of mining as well as specific conditions. Borrow pit mining is an open-cast activity and therefore the following components in Table 1 are applicable (highlighted in green).

Table 1: Closure components

Component No.

Main Description Applicability for the Borrow Pit

1 Dismantling of processing plant and related structures (including overland conveyors and power lines)

NO. All structures have been dismantled and removed from the project area.

2(A) Demolition of steel buildings and structures NO. There are no steel buildings / structures require demolishing.

2(B) Demolition of reinforced concrete buildings and structures NO. There aren’t any reinforced concrete buildings and structures.

3 Rehabilitation of access roads No. Existing road to the farm leads to borrow pit, paths on the borrow pit area have been rehabilitated.

4(A) Demolition and rehabilitation of electrified railway lines There are none at site

4(B) Demolition and rehabilitation of non-electrified railway lines There are none at site

5 Demolition of housing and facilities There are none at site

6 Opencast rehabilitation including final voids and ramps No. All voids and ramps have been filled.

7 Sealing of shafts, audits and inclines There are none at site

8(A) Demolition and rehabilitation of non-electrified railway lines There are none at site


8(B) Rehabilitation of processing waste deposits and evaporation ponds (basic, salt-producing waste)

There are none at site

8(C) Rehabilitation of processing waste deposits and evaporation ponds (acidic, metal rich waste)

There are none at site

9 Rehabilitation of subsided areas There are none at site

10 General surface rehabilitation, including grassing of all denuded areas

YES

11 River diversions Not required.

12 Fencing No. There is already fencing around the site.

13 Water management (separation clean and dirty water, managing polluted water and managing the impact on ground water, including treatment, when required)

Not required.

14 2 to 3 years of maintenance and aftercare YES

3.2.6 Step 4.3: Determine the unit rates for closure components Please refer to table 2.

3.2.7 Step 4.4: Determine and apply the weighting factors

The nature of the terrain is generally flat within the borrow pit area. This results in a weighting factor of 1.00. The proximity of the borrow pit to the urban area and where goods and services are to be supplied is considered as peri-urban (less than 150 km from a developed urban area). This results in a weighting factor of 1.05

3.2.8 Step 4.5: Identify area of disturbance

The disturbed areas are limited to the Borrow pit area (see Section 2 of this report for full description and maps).

3.2.9 Step 4.6: Identify closure costs from specialist studies

This is not applicable, as an independent third party (EOH CES) has calculated these costs.

3.2.10 Step 4.7: Calculate closure costs

The closure cost totals R10 249.00 inclusive of VAT (table 2). The rate per hectare for 2 – 3 years of maintenance and aftercare (line item 14) was R700 per ha when the guideline was produced in 2005. Assuming 7.5% increase (inflation) every year this amount has been adjusted to R1342 /ha. Line item 10 was not included as the area has already been hydro-seeded (October 2015) and the area needs to be given time for grass to establish in the area. Table 2: Closure costs: Maintenance and Aftercare

No. Description Unit A B C D E=A*B*C*D

Quantity Master rate

Multiplication factor

Weighting factor 1

Amount (Rands)

Step 4.5 Step 4.3

Step 4.3 Step 4.4


14 2 to 3 years of maintenance and aftercare

ha 5.5 1342 1 1 7 381

SubTotal 1 7 381

1 Weighting factor 2 1.05 7 750

Preliminary and General

6.00% if Subtotal 1 < 100 000 000

465

7 Contingency 10.00% 775

SubTotal 2 8 990

Add Vat (14%) 1 259

GRAND TOTAL 10 249

SANRAL (as the holders of the mining rights) is exempted from having financial provision to be held by DMR in the form of a bank guarantee. Thus due to this being a SANRAL project no Bank guarantee was required prior to the operation of the borrow pit but budget has been set aside by SANRAL to ensure that this area is rehabilitated and left in a manner that is environmentally safe. The Budget will be used to cover the after care of the area and any added rehabilitation activities that maybe required should no vegetation establish in the area. Should the area require another exercise of planting grasses in the area, an amount of R60 426 (Table 3) should be provisioned. With regards to the alien vegetation found in the area, it is recommended that the amount required for the removal of these species will be covered by the maintenance and aftercare. It should be noted that it is important to ensure that aliens are monitored on the site, this will ensure that these are controlled on site and that they do not disturb the progress of rehabilitation on the project area.

Table 3: Closure costs: Re-seeding, grassing of the Borrow Pit area.

No. Description Unit A B C D E=A*B*C*D

Quantity

Master rate

Multiplication factor

Weighting factor 1

Amount (Rands)

Step 4.5

Step 4.3

Step 4.3 Step 4.4

10 General surface rehabilitation, including grassing of all denuded areas

ha 5 10000 1 1 50 000

SubTotal 1 50 000

1 Weighting factor 2 1.05 52 500

Preliminary and General

6.00%

if Subtotal 1 < 100 000 000

3 150

7 Contingency 10.00% 5 250

SubTotal 2 60 900

Add Vat (14%) 8 526


GRAND TOTAL 69 426


References

Guideline Document for the Evaluation of the quantum of closure-related financial provision provided by a mine- Official guideline as contemplated in Regulation 54(1) to the Mineral and Petroleum Resources Development Act, 2002 (Act 28 of 2002).

financial provision report with respect to sanral … of borrow pit 111215_az... · 2017-06-13 ·...

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