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Quantum’s for rehabilitation that Juniors are notfactoring into their financials
Junior Coal Mining Ventures VIIGrant Beringer – 22 June 2012
Outline
• Introduction to rehabilitation• Planning for closure• Closure Cost Calculation• Big Ticket Items
–Water–Moving things–Waste–People
• Conclusion• Resources
Rehabilitation of MinesMining is, and has been for many years, a vitalcomponent of the development of South Africa. At thesame time, mining has resulted in major impacts, bothenvironmental and social, that have not been fullyrecognised or dealt with. This is where rehabilitationcomes in.Rehabilitation, from the mining industry perspective,means putting the land impacted by the mining activityback to a sustainable usable condition. It recognises thatthe restoration of what was previously there is simplyimpossible with current best practice.Rehabilitation that will be sustainable, in the long term,under normal land management practices.
How?
Planning for Closure
Typically the industry
spends 2 to 5 times more on
closure than planned
Design with
closure in mind
Construct with
closure in mind
Operate with
closure in mind
Close with long-term sustainabi
lity in mind
What goes wrong?
Calculating Closure Costs
• Requirement for financial provision is intended to manage or limit the risk of the Government inheriting the environmental liabilities for decommissioned mines that have not been correctly closed or rehabilitated
• Legacy of abandoned mines• Attitude change more recently, with regulatory
authorities adopting legislation requiring mines to make financial provision for closure
• How?
Calculating Closure CostsSouth Africa – Department of Minerals and Energy - Minerals and Petroleum Resources Development Act (MPRDA), (Act No. 28 of 2002)
Section 41(1), which requires that an applicant for a prospecting right, mining right or mining permit must, before the Minister approves the environmental management plan or environmental management programme in terms of section 39(4), make the prescribed “financial provision” for the rehabilitation or management of negative environmental impacts,
Section 41(2) which 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 environmental impact in question,
Section 41(3) which 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, which allows the Minister to recover costs in the event of urgent remedial measures.
Calculating Closure Costs - Objectives
Identify all liabilities and
costs;
Comply with legislation;
Take into account the
impact of new projects
on future closure costs;
Provide sufficient funds for closure;
Optimise closure
planning; and
Where possible
make savings.
Calculating Closure Costs - Tools
DMR – Quantum of financial provision:• Rules based approach• Model
• Classify mine in terms of risk & sensitivity of the area
• Determine weighting factors and costs• Principles of the Guideline Document:
• Does not supersede the law• Generic in nature• Covers the most essential components• Assumed that the mine infrastructure has no
salvage value
The proximity of the mine to an urban centre
Weighting Factor 2
The nature of the terrain where the mine is located
Weighting Factor 1
Determine risk class and Environmental sensitivity
Multiplication Factor
Mine: Location:Evaluators: Date:
A B C D E=A*B*C*DNo.: Description: Unit: Quantity Master rate Multiplication Weighting Amount
factor factor 1 (Rands)Step 4.5 Step 4.3 Step 4.3 Step 4.4
1Dismantling of processing plant & related structures (incl. overland conveyors & Power lines) m3 0.00 6.82 1.00 0.00 R 0.00
2 (A) Demolition of steel buildings & Structures m2 0.00 95.00 1.00 0.00 R 0.002 (B) Demolition of reinforced concrete buildings & structures m2 0.00 140.00 1.00 0.00 R 0.00
3 Rehabilitation of access roads m2 0.00 17.00 1.00 0.00 R 0.004 (A) Demolition & rehabilitation of electrified railway lines m 0.00 165.00 1.00 0.00 R 0.004 (B) Demolition & rehabilitation of non electrified railway lines m 0.00 90.00 1.00 0.00 R 0.00
5 Demolition of housing &/or administration facilities m2 0.00 190.00 1.00 0.00 R 0.006 Opencast rehabilitation including final voids & ramps ha 3.00 99600.00 0.04 1.10 R 13 147.20
15 (A) Specialist study SUM 0.00 0.00 0.00 0.00 R 0.0015 (B) Specialist study SUM 0.00 0.00 0.00 0.00 R 0.00
Change according to urban, peri-urban and remote1.05 R 1 725.57Sub Total 3
7 Contingency VAT (14%) R 2 082.19GRAND TOTAL R 16 954.96(Subtotal 3 plus VAT)
Template for Level 2: "Rules-base" assessment of the quantum for financial provision
CALCULATION OF THE QUANTAM
R 14 872.77
R 13 147.20Sub Total 1
(Sum of items 1 to 15 Above)
1 Preliminary and General 12.5% of Subtotal 1Weighting factor 2 (step 4.4)
(Subtotal 1 plus sum of management & administrative items, 1 to 6 above)
Calculating Closure CostsPros and ConsPros:• Standard for all• Easy to use• Aids in managing closureCons:• Too generic
– Does not take size, climate, area, soil etc. into consideration• Not all liabilities are considered – too simplistic
– Headgear – unique cost– Shafts – backfilled or not– Radiation– Groundwater pollution
• Rates need to be updated– Rates calculated in 2004– Increases in fuel, machinery etc.
• High provision for contingencies, Engineering costs etc.
Calculating Closure Costs
Other Methods• Most Excel based models• DME or new rates used
– Rates dependant on a number of factors:– Fuel costs;– Machinery availability and type;– Size of job;– Rates should reflect market conditions– Quotes from experts in the field should dictate rates. However
problems still occur with regards to consistency between quotes
• More or less detailed • Tailored to mines needs
Reference Description Classification Unit Quantity Rate Amount Photo
1 Shaft Area
1.2. Incline Shafts
Adit
Shape sides m³ 113050.00 9.60 R 1,085,280.00
Fill shaft m² 24.00 5,608.55 R 134,605.20
Old Adit
Shape sides m³ 83100.00 9.60 R 797,760.00
Fill shaft m² 24.00 5,608.55 R 134,605.20
Sub total R 2,152,250.40
2 Plant Area
Ore bin and grizzly P1
Remove reinforced concrete m³ 6.00 728.07 R 4,368.42
Dismantle steel structure m² 12.00 174.46 R 2,093.52
1st crusher steel P2
Remove reinforced concrete m³ 12.00 728.07 R 8,736.84
Dismantle steel structure m² 24.00 174.46 R 4,187.04
Calculating Closure Costs
Pros and ConsPros:• Flexibility – Tailor to needs• Market related rates – accurate costs• Focus on important areasCons:• Excel based• Difficulty in moderating data inputs (risk of omissions
and double counting)• Manual access control and audit checks • Limited analysis and reporting capabilities at company
level
The Big Ticket ItemsWater
• Decant• Treatment
Moving things• Soil• Overburden• Waste rock
Waste• Discard
Landform creation• Topography
People• Retrenchment• Alternative livelihoods
Factors to be Considered• In pit• Post miningWater:
Land preparation (pre-mining)
Landform re-creation
Soil replacement
Soil amelioration
Re-vegetation
Monitoring and maintenance
• Discard dumps• Waste rock dumpsMining waste:
Physical Rehabilitation
Water
Shallow Aquifer• Associated with Discard facilities, PCD and rock dumps• Implement measures before closure:
• Boreholes• Seepage cut off trenches• Lining
• Quantify impact before closure with specialist studies –not at or after closure
• Closure costs:Tailings Dams Rate Unit TotalDrill Boreholes (5) R 60 000 50m R 300 000.00Borehole maintenance R 10 000 each R 50 000.00Sample, analyse & report quarterly R 2 000 sample R 40 000.00Total (for 5 years) R 750 000.00
Water Issues
Water Issues
Deep Aquifer• Prolonged seepage• Underground mining• Costs:Treatment
• Capital Costs:– R 400 million for a 30 Ml/day plant
• Operating Costs:– R 10/m3 (incl. capital replacement)
6.7 (net cost) x (6 000 m3) x 30 (days)/1 000 000 = R 1.206 (M)/month
Water Issues - Management
• 2 Principles– Manage Volume of Water– Manage Quality of Water
• Effective rehabilitation• Effective stormwater management• Exclude oxygen
– Flooding– Capping
• Contain and treat– Evaporation– Treatment
Physical Rehabilitation
Soil strippingWhat are we doing wrong:• Don’t strip all available soil• Don’t separate top and sub-soils• Don’t use correct equipment, thus causing compactionWhat should be done:• Soil Survey – Prior to mining• Quantify types – Prior to mining• Ensure that there is a detailed soil plan for the areas to be stripped – Prior
to mining• Strip a suitable distance ahead of mining at all times, to avoid loss and
contamination - Operational• Demarcate boundaries of different soil types – Prior to mining• Define cut-off horizons in simple terms that the stripping operator can
understand – Prior to mining• Supervise stripping to ensure soils are not mixed – Prior to mining• Strip soils only when moisture content will minimise compaction risk –
Prior to mining• Strip and replace in one action wherever possible• Use shovel and truck in preference to bowlscraper.
StockpilingThe objective must be to minimise the quantity of soil stockpiled, the time it is stockpiled and the number of times it is rehandled: • Locate soil stockpiles so that rehandle is minimised - Prior to
Mining• Ensure free draining location so as to minimise erosion loss and
waterlogging – Prior to mining• Minimise compaction during stockpile creation
– End-tipping, – Limit stockpile height – Restrict stockpile height to 4-5 metres maximum.
• Revegetate to avoid erosion losses – Operational phase• Ensure that stockpiled soil is only used for its intended purpose.
R 440 000.00
Stockpile : 100 m x 100
m x 4 m = 40 000 m3
Dozer rate (50m): R
11/m3
Overburden Stockpiles
• Bulking factors:– One of the key uncertainties in final landform
prediction is the bulking factor. Soft materials frequently compact by as much as 15%, while hard materials may expand by as much as 25%.
– Determine bulking factors prior to mining• Where will overburden be required?
– Final void?– Discard dump?
• Will affect topography at closure
MaterialDensity at the Borrow Bulking (Swell) Factor
(kg/m3) (%)Basalt 2.4 - 3.1 75 - 80Clay 1.8 - 2.6 20 - 40
Dolomite 2.8 50 - 60Earth 20 - 30
Gneiss 2.69 75 - 80Granite 2.6 - 2.8 75 - 80
Gravel, dry 1.8 20 - 30Gravel, wet 2 20 - 30
Gravel, wet w/clay 50 - 60Limestone 2.7 -2.8 75 - 80
Loam 15 - 25Quartz 2.65 75 - 80Rock 40 - 80
Sand, dry 1.6 20 - 30Sand, wet 1.95 20 - 30Sandstone 2.1 - 2.4 75 - 80
Slate 2.6 - 3.3 85 - 90Soil 1.2 - 1.6 20 - 30
Landform RecreationWhat are we doing wrong:• Drainage not free• Reshaped overburden not uniformly compact or distributed – secondary
subsidence/bulking• Slopes incorrect for end useWhat should be done:• A post-mining landform plan should be developed at the planning stage - take
account of bulking factors – Prior to Mining• Where slope length is excessive, use drainage channels and waterways to reduce
erosion risk – Operational and decommissioning phase• Monitoring of the deposition of overburden materials – Operational phase• The survey results should be used to correct bulking factors employed in the
original planning exercise – Operational phase• All changes in mining plan should be analysed for their effects on final landform• Significant modifications to final landform will require modification to the mine
EMP – Operational phase• Reshaping, following deposition, should be done taking into account surface
water drainage and erosion risk considerationsThe key is early planning
2000 m
Topographical Map: Planned Post Mining Contours
Topographical Map: Actual Post Mining Contours
Topographical Map: Deviation from Plan
KEY:Topographical differences (m)0 - 2.0 m discrepancy2.1 - 4.0 m discrepancy4.1 - 6.0 m discrepancy6.1+ m discrepancy
Soil Replacementthe following list of actions reflects current South African soil replacement best practice:• Soils, which should have been stripped according to form, should be
replaced according to a pre-existing plan.• A soil reserve should be retained to repair localised surface subsidence
areas.• Compaction should be minimised by use of appropriate equipment and
replacing soils to the greatest possible thickness in single lifts.• Soils should be moved when dry to minimise compaction. If they have to be
moved when wet, shovel and truck should be used as bowlscrapers create massive compaction when moving wet soils.
• Where multi-layer soil profiles are re-created, running over the lower layers with heavy equipment should be minimised.
• Minimise compaction during smoothing of replaced soils by using dozers rather than graders.
• Following placement, all soils should be ripped to full rooting depth.• Where natural re-vegetation is not possible, the soils should be tilled to
produce a seed-bed suitable for the plant species selected for seeding.
Compaction is costlyRipping rate: R 6/m2
Area : 500 m x 500 m = 250 000 m2 (25 ha)
R 1 500 000.00
Soil Amelioration
• Deposited soils must be ripped to ensure compaction is reduced.
• Surface tillage should produce an acceptable seedbed for the vegetation to be established.
• Immobile fertilisers should be incorporated into the plant rooting zone.
• Maintenance dressings of fertiliser should be applied annually until the soil fertility cycle is restored
Re-vegetation
The re-vegetation objectives should be set to meet the post-closure land uses that have been agreed for the site.• Species selected for rehabilitation should meet the biodiversity
objectives.• Rehabilitation species selection must be based on practical
considerations.• Appropriate methods should be used for vegetation establishment.• Planting should be done when climatic conditions are most likely to
ensure success.• Where specialised biodiversity objectives occur, each situation
differs and general guidance is worthless – consult your expert!• Good guidance is contained in the ICMM/IUCN good practice
guidelines for mining and biodiversity.
R 525 000.00
Rehabilitated area : 500 m x 500 m = 250 000 m2 (25
ha)
Re-vegetation: R 21 000/ha
Monitoring and MaintenanceThe objective of monitoring is to ensure that the agreed rehabilitation process remains on track.Typically, the items to monitored may include several or all of the following :• Alignment of actual final topography to agreed planned landform• Depth of topsoil stripped and replaced• Chemical, physical and biological status of replaced soil• Erosion• Surface water drainage systems and surface water quality• Groundwater quality at agreed locations• Vegetation basal cover• Vegetation species diversity• Faunal re-colonisation• Crop growth and yield (on sites rehabilitated to agricultural end
uses)• Proportion of mined land that has been fully rehabilitated
Borehole monitoring (5) = R 500 000Water monitoring = R 250 000Vegetation = R 30 000/haManagement = R 300 000/year
Mine Waste ManagementWhat are we doing wrong:• Don’t strip soil before dumping waste• Don’t plan dump sustainably
– Slopes >1:5– Topsoil and fertility– Erosion– Encapsulate toxics
• Don’t maintain for long enoughWhat should be done:• Determine appropriate slope angle - standards have been set by various
companies, who use a slope of not more than 1:5 or 1:7 for grazing land and not more than 1:10 or 1:14 for arable land.
• Ensure sufficient drainage – pooling/run off rate• If acid/toxic, need to encapsulate to prevent water movement - Use of
“breaker layers” to prevent capillary action• Vegetate to reduce erosion potential• Maintain vegetation• Monitor groundwater and surface water post closure
Vegetation: R 40 000/haBreaker Layer: R 60/m3
Water management: 2 500 000
Discard dump: 126 ha
(126 x 40 000) + (60 x 252 000) + 2 500 000 = R 22 660 000
Other Factors
• Pits and final voids• Large concrete structures• P & G’s – set up costs• Engineering costs• Management costs• Specialist studies• Landowners
ConclusionThe key to reducing a mine’s liability is planning for closureFundamental to this approach is the need to consider closure as a core part ofyour business. The integration of closure considerations into an operation’splanning and engineering processes is an important mechanism for a mine tocreate lasting value.Planning for closure is about how to design a mine operation in order tofacilitate closure. When a project is designed, there is a lot of scope to do sowith closure in mind. For example, considering the need to re-vegetate atailings facility when deciding its position, or designing mine infrastructure inrelation to the community's requirements. There are often instances wheresimple changes up front can have profound implications for eventual siteclosure.1. Compile conceptual closure and rehabilitation plan as part of the EMP
phase.2. Update annually3. Compile detailed rehabilitation and closure plan 7 years prior to closure
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