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Country case: South Africa - ores (platinum, gold, coal)
Share of global production 74 : 80%
Share of imports to Germany: 6.4%
South Africa is one of the world’s most important mining nations, holding the
world’s largest reserves of gold and platinum and also significant diamond and
coal resources. South Africa exports around €75 billion (US$100 billion) worth
of mineral resources annually 75 . In 2010, revenues from mining accounted for
9% of South Africa’s GDP 76 .
In 2013, platinum
producers were
affected by water
restrictions around the
mining city of Rustenburg
after a drought in
the northwest province
Water situation
South Africa’s groundwater is limited due to the country’s geology, and most of
the country is underlain by low-yield secondary aquifers. In the northern parts
of the country, both surface water and groundwater resources are nearly fully
developed and used. By contrast, in the well-watered south-eastern regions,
there is more potential to develop some new resources 77 . South Africa’s major
environmental problems are dams that require extensive water conservation
and control measures; growth in water use outpacing supply; pollution of
rivers from agricultural runoff and urban discharge; acid mine drainage; air
pollution resulting in acid rain; soil erosion and desertification 78 . The most
important river, the Vaal, is overutilised and necessitates transfers from the
Tugela and the Orange Rivers 79 .
Physical risks
The areas of current mining operations and planned future ones are situated in
the most arid regions of the country 80 . Mining companies in South Africa have
already felt the financially detrimental effects of risks like flooding and water
stress 81 . In 2013, platinum producers were affected by water restrictions around
the mining city of Rustenburg after a drought in the northwest province 82 .
Acid mine drainage (AMD) is the largest environmental problem facing the
mining industry in South Africa, particularly because it is persistent and costly
and tends to be a liability for mines long after they cease to operate 83 . AMD
arises when pyrite from gold, coal, or platinum deposits oxidises to produce
sulphuric acid. The acidic water increases the solubility of aluminium and
heavy metals present in the affected regions, rendering the water toxic as the
dissolved metals leach into the water 84 .
Regulatory risks
Mining and mineral development requires water use licenses (WUL) from the
Department of Water Affairs (DWA). The DWA acts against polluters if they
can be identified and some cases of industrial pollution have been taken to
court 85 . The 1998 Water Act provides for stiff penalties if ineffective water use
can be proven 86 . However, enforcement seems to be weak as over 50 mines in
South Africa operate without valid WULs 87 .
Rising water prices have prompted mining companies to invest in water-saving
technologies 88 . Platinum mines in the Olifants face long-term risks associated
with escalating water charges; future operations face water charges ten times
higher than what is currently paid 89 . Should the Water Act be more strictly
enforced in the future, mines will also face the cost of treating acid mine
discharge before releasing it into the environment.
THE IMPORTED RISK Germany’s Water Risks in Times of Globalisation | 33