Anthony Turton bronwyn@speakersinc.co.za www.anthonyturton.com Untying the Gordian Knot in the South African Goldfields IWRA Webinar on Mining and Water Anthony Turton bronwyn@speakersinc.co.za www.anthonyturton.com © AR Turton 2016 © AR Turton, 2010.

Evolution of Mine Policy Policy Paradigm of Redistribution 1948 NP Victory 1961 Armed Struggle 1961 Internal Struggle 1994 Democracy 1910 Policy Paradigm I British Hegemony & Gold Policy Paradigm II Rise of Afrikaner Hegemony Policy Paradigm III Collusion between State and Industry Policy Paradigm IV State Survival & Total Onslaught Policy Paradigm V Redistrib’n of Wealth & Privilege Unresolved Policy Tension Policy Monopoly I Simple Extraction Policy Monopoly II Protecting the Goose that Lays the Golden Eggs Policy Monopoly III Changed Architecture of Governance Policy Instability Policy Instability Policy Paradigm of Extraction Time © AR Turton, 2008

Mine Closure and Livelihood Impact Value Remediation Cost Mine Closure T1 T2 Non-mining Livelihoods Revenue V2 Dev Cost V1 Livelihoods from mining Time © Adler et al., 2007 & Turton, 2011

RSA Gold Production Life Cycle Current policy drives this trajectory because it attempts to internalize historic externalities Second peak was deep gold driven by ventilation engineering and rock mechanics. An alternative model could follow this trajectory by reinventing the business case for mining in order to drive post-mining rehabilitation Third peak is about the recovery of gold from tailings dams driven by metallurgical engineering. First peak was shallow gold driven by surface resources that were easily accessible. Source: GDARD MRA Reclamation Project

Legally Required Deposit Outcome of Current Policy Cumulative Value 100% 50% 0% Cumulative Rehab Reqt (RHS) Value 10 5 Negative Total Available for Rehab Mine Revenue (LHS) Today Legally Required Deposit Mine Profit (LHS) Cost Squeeze Mine Profit as at Today Total Available Revenue Profit Squeeze Time 100 50 The logical outcome is for disinvestment from late cycle mines resulting in the inevitable collapse of the industry with all residual liabilities being nationalized by the State. Current environmental policy is inappropriate for Brownfields operations and will result in a macroeconomic and environmental disaster of unprecedented proportions. © Turton, 2014

Policy Reform Mismatch between Greenfields logic and Brownfields reality Offset’s not yet recognized Benefit of removing surface tailings and uranium hazard is cumulative downstream and potentially quantifiable Closure Mining is emerging as a model Being trialled at a marginal mine as part of Business Rescue

Benefits can only be shared if they exist in the first place Knowing what’s coming before it bites is called wisdom. Thank You