HSE Legal Consulting


Title: Regulations Pertaining to the Financial Provision for Prospecting, Exploration, Mining or Production Operations
Government Notice: GN R1147 in GG 39425 of 20 November 2015
Date of commencement: 20 November 2015

The purpose of these Regulations is to regulate the determination and making of financial provision as contemplated in NEMA for the costs associated with the undertaking of management, rehabilitation and remediation of environmental impacts from prospecting, exploration, mining or production operations through the lifespan of such operations and latent or residual environmental impacts that may become known in the future.

The holder of a right or permit must ensure that a review is undertaken in respect of the requirements for the financial provision made for annual rehabilitation, final rehabilitation and remediation of latent or residual environmental impacts. Thereafter the holder must ensure that the adequacy of the financial provision is assessed and any adjustments to the financial provision are made accordingly.

“So what” for my operation?
The following controls can potentially be affected by these regulations:
• Annual financial provision calculation & financial provision vehicle,
• Financial provision rates,
• Approval of financial calculations,
• Rehabilitation plan (annual & Life of Mine),
• Mine closure plan,
• Mine decommissioning plan,
• Environmental risk report,
• Care and maintenance plan,
• New authorisation applications,
• EMP, environmental audits & reporting,
• Accessibility to reports,
• Timeframe for review, and
• Reporting requirements

What can Shangoni do for my operation?
Mine closure plans
• Shangoni develops mine closure plans to support mines in different phases of closure. Closure plan detail differs depending on the life of mine. Development of the closure plans include work¬shops with all stakeholders to discuss and agree on closure objectives and post closure land use. Risk assessments are conducted to identify all the actual and potential risks (including residual and latent) in order to implement focussed actions on minimising the risks.
• In addition to the closure plan Shangoni also develops an execution plan providing detail with regards to the effective implementation of the closure plan. Closure plans incorporate the relevant detail from the financial provision quantification and reha¬bilitation plans.

Mine financial provision
• Shangoni specialises in calculating accurate mine financial provision quantum’s as required by the Mineral and Petroleum Resource Development Act. The financial provision calculations are determined taking the closure plan actions and rehabilitation plans and strategies into account. This makes for a more accurate determination of a suitable quantum. Calculations are done using DMR rates and/or quantity survey rates that have been obtained from reputable quantity survey companies over the past number of years.

Rehabilitation strategies
• Development of rehabilitation strategies and plans are deemed to be one of the significant short¬comings in the mining industry. Shangoni provides support in developing a site specific rehabilita¬tion plan focussing on providing details rehabilitation actions based on the closure objectives and supporting the financial provision calculations. The plans are specific and provide inputs into the annual recalculation of the financial provision quantum. Rehabilitation plans include actions, reha¬bilitation criteria, procedures and processes followed and post rehabilitation maintenance actions.