Water Affairs Minister Edna Molewa allegedly intervened to prevent legal action and a possible prosecution of mining companies linked to businessman and ANC heavyweight Cyril Ramaphosa after it was discovered that they operated without water licences, government sources told the Mail & Guardian. More than five companies owned or partly owned by Ramaphosa are listed by the water affairs department — among 46 mines across the country — as having operated without water licences. They include Shanduka Graspan Colliery, Shanduka Bankfontein Colliery, Shanduka Coal Middleburg, Umcebo Mooifontein Colliery and Umcebo Nowesco (Brakfontein). Two senior departmental officials this week confirmed to the M&G that the department took the Shanduka Group of companies to court and even referred the matter to the National Prosecuting Authority for prosecution for operating without valid water licences that regulate the use and treatment of large volumes of water by mining companies. But it was Molewa’s intervention that ensured that her department and the Shanduka Group of companies settled the matter before it was heard in court. Find a way “The minister made it very clear that she did not want the matter to go to court as it would cause an embarrassment for Ramaphosa. She said if the matter went to court it could even cost her her job [as minister]. She instructed officials in the department to find a way of settling out of court,” said a government official, who asked not to be named. Nigel Adams, director of compliance, monitoring and enforcement in the department, said it went to court in a bid to force companies under Shanduka to stop operating. “We issued predirectives and asked them [Shanduka] to produce proof that they have the authority to use water. We were not happy with their representation. They were supposed to explain to us why we should not take action against them, but they failed,” said Adams. Although Adams said senior officials in the department updated Molewa on a regular basis about developments on the matter, he rejected claims that she had intervened to protect Ramaphosa. “The minister never gave us instructions. We kept her informed about the developments. She [only] gave us her opinion. That, for me, is not an intervention,” said Adams. Settlement The department’s chief director for legal services, Anil Singh, said the decision to settle out of court came from her unit, not the minister. She said the department initially took the matter to court and laid criminal charges against Shanduka. The case was later dropped after the parties settled out of court. Singh did not explain why the unit decided to settle, nor did he give details of the settlement. Approached for comment about the alleged intervention by Molewa, her spokesperson, Mava Scott, said: “The department cannot confirm such ‘intervention’ rumours.” When approached by the M&G later, Molewa avoided direct questions regarding her intervention. “What about Patrice Motsepe [whose company, Harmony Gold, is also among the companies that have been operating without water licences]? We come from the same area [in North West]. When we deal with companies, it is not about who owns them. It is about our environmental mandate. I never knew that Cyril had something to do with those companies until the deputy minister [Joyce Mabudafhasi] in the department issued instructions that they [Shanduka companies] must stop operation,” said Molewa. She questioned why the Shanduka Group of companies should be singled out for scrutiny when there were many other companies operating without licences. ‘Unfair’ “It can’t be right that we separate Shanduka Group because Cyril’s name has been in the news because of Marikana. That will be unfair. We are dealing with all the companies the same way,” Molewa said. Ramaphosa, who has been nominated by some ANC branches to take over the party’s deputy presidency during its conference in Mangaung in December, recently came under fire for allegedly using his political influence to instruct Cabinet ministers to take firm action against striking workers at Marikana. It was revealed during the Farlam commission of inquiry, which is taking place in Rustenburg, that Ramaphosa called for concomitant action to address the criminal acts of the striking miners. An email exchange between Lonmin’s management referred to Ramaphosa’s interaction with the minister for mineral resources and the police. The emails were allegedly sent 24 hours before 34 miners were killed by the police. Molewa’s alleged intervention could raise the ire of other mining companies that were closed down or given hefty fines for operating without water licences. Opposition Shanduka Coal’s chief operating officer, Zirk van der Bank, said the department had issued a notice of intention to issue directives against the company early in 2012. “To protect its legal position, the company indicated its intention to launch an urgent application [against the department for failing to issue licences on time]. The company maintained that it had provided all information necessary to facilitate consideration of its water-use licences and had made every effort to fully comply with any and all requirements of the department to date,” said Van der Bank. “The application was not heard, however, because after consultation with the department a timeline was agreed on the processing of the water-use licences and they were subsequently processed and issued.” He said the Shanduka companies that had since obtained water licences included Graspan Colliery, Middelburg Townlands Colliery and Norwesco (Brakfontein). Shanduka Coal had taken over operations already in existence since 2006 and had embarked on a process to obtain the necessary water-use licences, he said. “The first licence applications had already been submitted by the previous owners and Shanduka Coal continued with the process of updating and revising the water-use applications in line with the department of water affairs guidelines. The department had a significant backlog in processing water-use licences across the industry due to the determination of the reserve and resource-quality objectives, which are a prerequisite for the issuing of a water-use licence. As such, institutional constraints at the department of water affairs impacted negatively on the efforts of Shanduka Coal, and the mining industry as a whole, to acquire water-use licences timeously,” said Van der Bank. Molewa said that, since she had taken over as minister, the water license backlog had shrunk from about 4 000 to just more than 40.
Legality of operations a grey area if old-order rights exist
Forty-six mines are operating without water licences in South Africa in violation of the National Water Act, water affairs department documents reveal. The list of mines was supplied to the Mail & Guardian by the department’s director for communication services, Mava Scott. It includes at least five mines owned by Cyril Ramaphosa’s Shanduka Group, as well as operations falling under Anglo Platinum and Harmony Gold. Two operations have not yet applied for licences, including Gold Fields’ Beatrix mine. Gold Fields’s corporate affairs manager, Sven Lunsche, said that Beatrix could still operate legally because prior legislation “made provisions for previous permits … Nevertheless [they] are currently in the process of applying for a licence … [and they] expect the application to be in during the next two months.” The department’s documents show that Vunene Colliery in Gauteng has also failed to apply for a water licence, although its status is given as “pre-application”. Vunene had not responded to the M&G’s queries by the time of going to print. Harmony Gold’s Doornkop mine in Randfontein, Gauteng, is also non-compliant, although its application is shown as being “in process”. Harmony spokesperson Marian van der Walt said the operation was legally compliant in terms of the 1954 Water Act. However, the company had applied to the department to convert old-order to new-order rights. It was liaising with the department to expedite the issuing of the licence, said Van der Walt. The documents show that PMG Mine, a manganese mine in the Northern Cape, must submit additional documentation to the department to finalise the licensing process. PMG chief executive Shirin Ismail said the company had contacted the department “to remedy the situation”. A meeting between the parties would take place this week. One of Anglo Platinum’s operations in North West is also listed as non-compliant. The company had not responded to questions at the time of printing. The chairperson of Parliament’s water committee, Johnny de Lange, said companies’ failure to apply for water licences amounted to lawlessness. “We have created a situation of anarchy. Water can be used only with a licence. We have told the department that it must act. It must stop operations in all companies that do not have licences,” he said. De Lange would not comment on individual companies. “It is unfair to all of us if some companies are allowed to operate without a licence. I don’t care who the person is. Every company needs to rectify the situation.” — Nelly Shamase & Matuma Letsoalo
Water use a particularly sensitive issue
Water licensing is not a legal technicality. It is designed to ensure that water is properly managed in a semi-arid country to protect against water pollution, including acid mine drainage, oversee the equitable distribution of a life-sustaining resource and ensure that industrial users pay for consumption. Because it is a heavy consumer and can inflict major damage on the environment, there is particular sensitivity over the use of water in the mining industry. The licensing process is set out in the National Water Act, which stipulates that all companies granted mining permits must apply to the water affairs department for a water licence in order to operate legally. After registering with the department, companies are required to fill out forms specifying their water usage for operational purposes. Failure to register is a prosecutable offence and mines must comply with the guidelines spelled out in their licensing contract with the department. Before mines are granted a water licence, they must submit to a comprehensive environmental monitoring and assessment programme that looks at what the impact their activities are likely to have on the water system. The department has strict guidelines on water pollution and each mine has the added responsibility of ensuring that it reports instances of pollution to regional departmental heads. In a measure designed to avert water shortages, all mines are allocated a predetermined amount of water for use annually and it is their responsibility to ensure that this is not exceeded. — Nelly Shamase & Matuma Letsoalo Matuma Letsoalo is a senior reporter. Nelly Shamase is an investigator with AmaBhungane, the M&G Centre for Investigative Journalism. * Got a tip-off for us about this story? Email [email protected] 
The M&G Centre for Investigative Journalism, a non-profit initiative to develop investigative journalism in the public interest, produced this story. All views are ours. See www.amabhungane.co.za for all our stories, activities and sources of funding.