Environmental performance

Approach and structure

The health, safety and environmental (HSE) committee has been tasked by the Northam board to oversee environmental matters at a group level.

At Zondereinde environmental issues are managed as an integral part of the production process. Owing to the technical nature of so many of the environmental issues and challenges, this portfolio vests with the engineering department and, specifically, the engineering manager who is supported by an environmental officer. Ultimate responsibility for environmental compliance and performance lies with the general manager of Zondereinde and the chief executive of Northam.

At Booysendal, oversight for environmental issues within the designated mining area (the Booysendal UG2 North mine which accounts for 1.3% of land under management) is the responsibility of the mine manager, supported by environmental personnel. The balance of the land under management is the responsibility of a designated land manager with a background in conservation rather than mining.

All required permits and licences have been awarded at Booysendal following baseline assessments and planning to minimise the operation’s impacts on the natural environment. Environmental management systems are in place to meet regulatory requirements.

Key environmental issues and parameters for both operations are formally reported on a monthly basis to the mine and company executive and on a quarterly basis to the HSE committee of the board.

The company regularly undertakes audits and assessments of compliance with environmental management plans (EMPs) and environmental impact assessments (EIAs).

Northam’s environmental policy commits the company to manage the environment in which it operates responsibly by adopting and implementing environmental practices as outlined in the National Environmental Management Act (NEMA), 1998.

As a PGM development, mining and beneficiation company, Northam’s activities do have an impact on the land, water, air and natural resources, including fauna and flora, in the areas which surround its operations. Conserving and optimising the use of resources such as land, water, energy, and fuel are among the most significant challenges faced by Northam.

Legislation and compliance

Rigorous environmental and mining legislation governs environmental impacts and permitting in South Africa, including:

• NEMA;
• the MPRDA;
• the Constitution of the Republic of South Africa,
• the Air Quality Control Act;
• the National Water Act;
• the National Waste Act;
• the National Heritage Resources Act; and
• the National Environmental Biodiversity Act.

According to South Africa’s environmental legislation, all new mining projects are subject to environmental impact assessments (EIAs) which include a high degree of public participation as well as numerous specialist studies which cover all aspects of the environment including fauna, flora, archaeology as well as water and air quality.

Northam manages its operations in line with the environmental legislation and regulations of, in particular, the Department of Mineral Resources (DMR) and the Department of Water Affairs (DWA). Consultation is also held with the regulatory authorities. The company did not receive any environmental fines or legal sanctions during the year under review.

The company has adopted a precautionary approach as this is implicit within the regulations of NEMA and the company’s own environmental management systems (EMSs).

Both Zondereinde mine and the Booysendal UG2 North mine have new order mining rights and both operations now have integrated water use licences (IWUL) in place following the allocation of Zondereinde’s IWUL in May 2012.

Approved environmental management plans (EMPs) are in place at both the Zondereinde and Booysendal UG2 North mines and serve as management tools to address the impacts and potential impacts on the environment by the operations as well as the measures to manage, monitor and mitigate these impacts. These EMPs are subject to regular annual audits.

During the year, Zondereinde mine hosted a public open day to discuss its integrated water and waste management plan with affected stakeholders. Some of the issues raised included the possibility of creating community jobs by way of a waste recycling programme. This suggestion is currently being considered by management.

ISO14001

Northam has adopted the ISO14001 standard as the basis for its environmental management systems. The Zondereinde mine has been ISO14001 certified since February 2011. An ISO14001 audit conducted during the year raised a number of areas targeted for attention, including:

• improving the environmental management system (EMS);
• improving understanding of the EMS amongst employees;
• setting objectives and targets throughout the mine;
• aligning the EMP with mine-wide objectives and targets;
• implementing emergency plans and testing at sewer plant and salvage yard; and
• re-evaluation of internal audits.

The implementation of ISO14001 at the metallurgical complex is continuing and the company is aiming to have obtained certification by 2014. A training model for employees is in place and has been implemented at the Zondereinde training centre.

The principles underlying ISO14001 have been incorporated into Booysendal’s EMP to ensure that an ISO14001-aligned EMS is in place once the mine reaches steady-state production after which ISO14001 certification will be sought.

While a smelter run-out occurred at Zondereinde, the matte spill was contained within the building footprint and the matte will be recycled. There were therefore no significant environmental incidents or water spillages at Zondereinde during the year.

Performance 2012

Northam’s environmental impacts at Zondereinde and Booysendal are different given the stage of operation (development versus steady-state), nature of operation (deep-level versus shallow mining) and location. Generally, however, these impacts may be categorised as:

• the use of resources, including rock mined, water and energy use as well as the consumption of other materials;
• emissions and discharges to water and air;
• management of land, including rehabilitation and biodiversity management; and
• planning for and funding of eventual rehabilitation and closure.

During the year, Northam spent R2.3 million on environmental management at Zondereinde.

Resource utilisation

The primary resources used by Northam are water, energy and bulk materials such as rock (mined and processed), liquid fuels, coal, grease, steel, timber and lubricating and hydraulic oils. Zondereinde actively optimises its resource usage and recycling programmes are in place for plastics, steel, timber and scrap.

Materials used

	Unit	F2012	F2011	F2010
Rock mined	000t	2 154	1 801	2 281
Ore milled	000t	1 934	1 591	2 105
Timber (bulk support)	m³	827	754	3 528
Cartridge explosives	t	2 552	2 010	2 650
Oxygen	t	2 018	2 461	3 131
Sulphuric acid	t	769	747	1 064
Sulphur dioxide	t	82	90	122
Grease	t	47	41	61
Lubricating and hydraulics oils	l	135 155	112 311	125 034

Materials recycled

	Unit	F2012	F2011	F2010
Plastic	t	108	62	14
Steel	t	2 053	1 759	1 508
Timber	m³	4 601	5 874	6 402
Scrap metal	m³	1 955	2 526	2 557
Rubber	t	134	156	168

Water

Northam recognises that water is a scarce resource and optimises the use of water by recycling and reusing water in various circuits. Furthermore, these circuits are linked at Zondereinde to optimise water consumption from any source.

On 2 May 2012 the Zondereinde mine was allocated its IWUL. There are however a few requirements which the mine will continue to address, these include:

• monitoring the stringent water quality requirements for industrial water circuits;
• frequency of groundwater monitoring;
• construction and operation of dirty water infrastructure;
• calibration of flow metres every two years;
• additional groundwater monitoring; and
• timeframes for the submission of initial reports.

Zondereinde mine engages with the DWA and the Department of Environmental Affairs and Tourism (DEAT) regarding these water use issues on a regular basis.

Northam continues to consider the risks and opportunities related to water availability in its voluntary submission to the Carbon Disclosure Project (CDP) Water Disclosure for the third consecutive year. This submission may be downloaded from https://www.cdproject.net/water.

Water is fundamentally important for Zondereinde mine, not just from an environmental and permitting perspective, but also because the mine uses water as its primary source of energy for underground operations through a shaft-based hydropower system. Water management and water quality are therefore an integral part of the engineering management system. Employees are also made aware of the need to conserve water through campaigns and other forms of communication.

Zondereinde endeavours to run a zero discharge operation and closely monitors any potential impact on its operations on surface and groundwater sources. Extensive monitoring is undertaken and a comprehensive groundwater model, developed and maintained by a third party consultant, has been in place for seven years. This consultant also monitors and advises on surface and groundwater quality control.

In F2012, Northam compiled a storm water management report and upgraded a number of stormwater channels to comply with the requirements of GN704. In addition, Zondereinde also improved the pumping capacity of the return water dam to ensure that no discharge from the tailings dam can access the nearby Crocodile River.

Water allocation is of critical importance at Booysendal too and Northam continues to manage water use at this operation according to the requirements of its water use licence.

Sampling of underground and surface water at Booysendal was finalised during F2010 and the data provided base line information on the original water quality – before mining operations started – in the area. Water quality at Booysendal is monitored on a continuous basis and the findings compared with base line information.

Water usage (000m³)

	F2012	F2011	F2010
Potable water from external sources	2 540	2 441	2 601
Fissure water used	1 273	2 392	1 385
Water recycled in process	24 390	24 308	23 439
% water recycled	91	91	90

Energy

Energy supply in South Africa, specifically electricity, revolves around both supply and price. Northam sources electricity from South Africa’s power utility, Eskom. As electricity is a critical component of costs –R295.3 million (11.6%) of total cash costs in F2012 – the company places a great deal of emphasis on its conservation.

However, owing to the extensive use of hydropower at Zondereinde, Northam continues to be presented with an economic advantage due to the fact that the company uses less electricity per unit run of mine production than its peers that utilise compressed air to power underground equipment.

Mining activities at Zondereinde are carried out by hydropowered equipment, a technical innovation pioneered and refined over time by Northam. Hydropowered equipment is used for direct mining operations and provides the added advantage of positional cooling where work is performed. A second technological innovation is the use of backfill to support mined underground areas. Backfill lowers the underground temperatures by reducing heat ingress from worked-out areas, while also reducing the size of the area to be cooled by 65%.

The application of hydropowered equipment and backfill, has effected power savings of 190 399MWh and 50 400MWh respectively. These savings have been enormously beneficial, given the continued increases in power tariffs (25.8% increase with effect from 1 April 2011; 16% increase on 1 April 2012; and a further increase planned for 2013).

As Zondereinde’s mining operations go inevitably deeper, its energy requirements will increase. Similarly, Booysendal’s ramp-up will add to the group’s energy consumption, resulting in little potential for reducing energy consumption in the short to medium term. Going forward, the company will be focusing on efficiency rather than the amount of electricity purchased.

Nevertheless, the development of efficient power technologies at Zondereinde since its inception has spawned a culture of innovation and research into alternative energy sources. This mind-set will stand the company in good stead as it expands its production base in the future.

Total indirect non-renewable energy consumption from electricity sourced from Eskom at Zondereinde decreased by 0.4% to 599 679MWh (F2011: 601 890MWh) in F2012 with around 78% of electricity used by mining operations and 22% by processing and smelting activities.

Electricity consumption (MWh)

	F2012	F2011	F2010
Energy from electricity purchased by shafts	467 893	461 484	483 541
Energy from electricity purchased by plant	125 548	140 406	156 199
Total electricity purchased	593 441	601 890	639 740

Management continues to review all energy-intensive processes to improve efficiencies. Improvements are also being effected to the electricity consumption monitoring system so as to allow for the automated use of equipment.

Zondereinde also works closely with Eskom in respect of its Demand Side Management programme, so as to reduce its energy requirements at the refrigeration plant and underground pumps during peak consumption periods. In addition, the mine also makes use of power factor correction equipment to reduce apparent power consumption which leads to electricity bill savings.

Northam continues to implement and benefit from renewable energy and energy conservation programmes at Zondereinde. The following programmes were implemented during the year:

• reduced consumption of main ventilation fans by around 0.8MW for four hours per day during the working week and 24 hours over the weekend;
• reducing the quantity of water that needs to be chilled and pumped, thereby improving the efficiency of spot coolers in underground workings which has resulted in a continual saving of around 2.5MW; and
• moving 3.2MW of electrical consumption from Eskom during peak periods to off-peak periods by controlling the operating time of refrigeration plants.

The availability of electricity at Booysendal has been a significant challenge to date. The contractors responsible for erecting power installations on an Eskom-registered servitude have had to suspend these activities upon encountering threatening and intimidation behaviour from community members who had recently moved on to company owned land previously earmarked for the power supply installations. Northam and Eskom are working to resolve the situation. For more information on the Eskom servitude, see the section on Northam in the community.

The Booysendal mine design makes provision for an energy management system and the introduction of energy recovery strategies once the mine is fully operational. The orepass capacity minimises the need for decline conveyors to run during peak shift times; with cycle efficiencies and the selection of optimised equipment each section is expected to maximise output while at the same time reducing the number of sections required to operate. This should have a beneficial effect on energy requirements.

Climate change

Climate change continues to present a moderate risk for Northam on a physical and regulatory front. It also presents an opportunity as PGMs are used in technologies that bring about reduction in noxious gases.

Northam has considered the risks and opportunities relating to climate change, including its financial implications in its voluntary submission to the Carbon Disclosure Project (CDP) for the fourth consecutive year which may be found at: www.cdproject.net. Both physical and regulatory risks have been identified and the company continues to manage these primarily through its energy conservation initiatives.

The most significant emissions or potential discharges from Zondereinde are SO₂ emissions (directly from the smelting operations) CO₂ emissions (direct and indirect), potential discharges to water courses and dust generation from tailings dams.

The new Air Quality Control Act came into full effect in April 2010 and has ramifications for emissions, particularly for the reporting of industrial greenhouse gas (GHG) emissions data and mitigation plans. Government is developing additional legislation on the actual reduction of GHG emissions (34% below the business as usual baseline by 2020 and 42% below the business as usual baseline by 2025).

CO₂ emissions

Progress towards the development of a company climate change mitigation strategy has been made, with Northam already reaping the benefits of a number of energy saving and efficiency projects to reduce electricity consumption and therefore the amount of greenhouse gases (GHGs) admitted into the atmosphere (as the bulk of Zondereinde’s CO₂ emissions are largely attributable to indirect emissions from electricity purchased from Eskom).

Greenhouse gas emissions (CO₂e tonnes)

	F2012	F2011	F2010
Total global Scope 1 emissions (direct emissions)	15 401	14 432	16 796
Total global Scope 2 emissions (indirect emissions)	611 244	619 947	658 932
Total global Scope 3 emissions (indirect emissions)	815	1 089	1 388
Total emissions	627 460	635 468	677 116

Dust management

At Zondereinde, dust is monitored on a regular basis and interested and affected parties are encouraged to lodge any complaints relating to dust emissions. Since Zondereinde started operations, no complaints related to dust emissions have been received.

At Booysendal, monthly dust deposition monitoring conducted during F2010 has provided baseline information on the dust levels in the area before mining had commenced. Northam continues to monitor dust deposition in the areas adjacent to the Booysendal project to determine the level of impact of mining activities on the area and to develop dust mitigation procedures to reduce its impact on the area.

Land management and biodiversity

Northam recognises that it has an important role as custodian of the land where its operations are based. By its nature, and the fact that it is long-established, the management of land and the conservation of biodiversity at Zondereinde mine and metallurgical complex is far simpler than at Booysendal.

None of Northam’s activities are situated in areas protected by the World Conservation Union, heritage sites or biosphere reserves and no Red Data species have been identified on or adjacent to either mine properties. It is recognised, however, that Booysendal is located in a more remote and pristine environment that needs to be safeguarded for future generations.

Land management at Zondereinde

Zondereinde’s landholding is far greater than the actual surface footprint of the complex, with surface freehold covering some 4 439 hectares.

Of the land under management, only 137 hectares (3%) has been disturbed by mining, processing, deposition and related activities, including the mine village. The tailings dam and waste rock dump account for around 281 hectares – or 6.3% of the Zondereinde landholding. Land leased to farmers covers 273 hectares (6%) of the total area, while Northam maintains 800 (18%) hectares for conservation and biodiversity purposes. The balance of the land (73%) remains in its natural state.

Zondereinde’s tailings storage facility (TSF) will be rehabilitated as deposition continues to reduce dust levels and for aesthetic reasons with final rehabilitation only occurring after closure.

Land use at Zondereinde (hectares)

Land disturbed by mining and related activities	137
Land leased for farming purposes	273
Land protected for conservation	800
Total land under management (freehold)	4 439

Land management at Booysendal

Given that Booysendal is located in a biodiversity-sensitive region – the Dwarsrivier valley – the company has developed a unique and progressive structure that will see oversight of land under management as a distinct role to that of the management of the mine.

At Booysendal, Northam’s mining right covers an area of 15 151 hectares over which the company owns freehold of 7 423 hectares. Of the land under management, around 100 hectares has been disturbed by mining related activities with around 800 hectares of the landholding having been set aside for conservation and biodiversity purposes.

Booysendal has established a trust to be funded during the life of mine for the active promotion of conservation in a offset area.