IT WOULD be good if Harmony Gold, the fifth-largest gold producer in the world, did appeal against a North Gauteng High Court ruling that it must continue paying for treating acid mine drainage from a West Rand mine it sold in 2008, commentators said on Thursday.

This would make it clear whether Judge Tati Makgoka's precedent-setting ruling was correct, and, if so, broaden the precedent from the North Gauteng High Court's jurisdiction to the whole country.

The ruling, if it stands, has profound implications for the mining fraternity as it means liability for environmental degradation cannot be sold off.

Lawyers for Harmony Gold said on Thursday the company would decide next week whether to appeal against the ruling.

"It should be taken on appeal for the good of the law," said Garyn Rapson, an associate in law firm Webber Wentzel's mining, energy and natural resources practice.

Judge Makgoka ruled that where a directive from the Department of Environmental Affairs to take preventive steps against pollution was issued while one juristic person was in control, that juristic person's unfulfilled obligations were not nullified once they ceased to be in control.

"If he severs ties with the land, fully knowing that his validly imposed obligations remained unfulfilled, he can hardly complain if it is insisted that he should comply with those before he is discharged from them," the judge said.

The directive placed on Harmony was linked to gold mining activities in Klerksdorp, Orkney, Stilfontein and Hartebeesfontein where mining was a source of potential pollution to the area's underground.

It stands until Harmony and other mining houses - AngloGold Ashanti, Simmer & Jack Mines, Simmer & Jack Investments and Stilfontein Gold Mining Company (under liquidation) - reach an agreement on the long-term management of water arising from mining activities in the area.


Gareth Morgan, water and environmental affairs spokesman for the Democratic Alliance, said while it was gratifying that the court had made a strong environmental ruling, the judgment's severity and the major implications it held for the mining fraternity meant it was important to get greater clarity from a higher court.

Mariette Liefferink, CEO of the Federation for a Sustainable Environment and a tireless campaigner against acid mine drainage, said the judgment was "very important" because it meant that liability for environmental degradation could not be passed on to buyers.

Larger mining houses often sell mines to junior miners mines as their profit-worthiness dims. Many of these junior miners do not have the experience to realise the liabilities they are taking on, or do not have enough money to deal with environmental degradation such as acid mine drainage.

Acid mine water is already pouring into water courses on the Witwatersrand's western basin, and scientists say it will flow into the region's central and eastern basins in less than a year, causing widespread ecological degradation and compromising human and animal health.

It is not known what effect, if any, the ruling will have on Gold One and Goliath Gold's R70m bid to buy the assets of the defunct Grootvlei mine near Springs on the East Rand. Gold One CEO Neal Froneman said his company and Goliath Gold hoped to build at least four new mines in the area.

The Grootvlei mines are in liquidation, and have been so since 2009, after a takeover bid by Aurora Empowerment Systems - headed by Nelson Mandela's grandson Zondwa and President Jacob Zuma's nephew Khulubuse - failed. After the Aurora bid went sour, the mine was closed, with the loss of about 5000 jobs, and then flooded. The shafts were stripped of headgear, winders and equipment, making it hard for the liquidators to find a new bidder.

Mr Froneman, who was not available for comment on Thursday, said earlier this year Gold One and Goliath Gold had structured their agreement carefully to distance themselves from environmental and pumping liabilities created by Pamodzi Gold and Aurora. The Department of Water Affairs is pursuing criminal charges against Grootvlei over acid mine water pollution.

Mr Rapson of Webber Wentzel said he believed Judge Makgoka's ruling did not absolve a buyer from responsibility for environmental degradation and gave the government the ability to hold "a whole host of people" responsible where it had issued a directive.

However, the judgment had "quite a few potential unintended consequences" because government departments "never really withdrew" directives and could "dig up" old directives to take action against mines.


There has been a long-standing tussle between the government, mining houses and the Chamber of Mines over footing the bill for 120 years of mining that has ravaged vast sections of South Africa.

Acid mine water threatens the water supply predominantly in Gauteng, but also in the Northern Cape, KwaZulu-Natal, the Free State, Mpumalanga and Limpopo. Experts have warned the Vaal River could run into trouble by 2015, unable to dilute the sulphates left after acid mine drainage is neutralised. Neutralisation does not remove the sulphates.

The Treasury has already allocated R224m to solving the Witwatersrand's problem in the short term. However, the state-owned enterprise tasked with treating acid mine water, the Trans-Caledon Tunnel Authority, has said R924m is needed just to provide a short-term solution.

Earlier this year, acid mine water contaminated the water supply to the Mpumalanga town of Carolina, inhabited by 17000 people.

A North Gauteng High Court judge is to rule on Tuesday whether Water and Environmental Affairs Minister Edna Molewa , the Department of Water Affairs and eight other government officials and institutions have breached the constitution by failing to supply Carolina with potable water.