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Shortage of water supply ‘hurts mining industry’

THE country’s water constraints are putting the brakes on South Africa’s mining industry, battered this year by extensive and sometimes violent industrial action, experts said on Monday.

Mining production retreated 14.5% this year from last year, and the Fraser Institute ranked South Africa 67th out of the 79 mining jurisdictions covered in its 2010-11 survey, a drop from 53rd out of 65 just five years ago.

The increasing shortage of water supply — by 2005 at least 95% of South Africa’s fresh water had already been allocated — was forcing mining companies to reconsider new and expansion projects; or to develop water efficiency technologies, said Warren Beech, head of mining at law firm Eversheds.

World Wide Fund for Nature South Africa senior water programme manager Christine Colvin said it was “a good sign” that mining companies were thinking twice about going ahead with projects because they often created water pollution and left the state to clean up.

SRK consulting principal hydrologist Peter Shepherd said mining was becoming more water-efficient in the face of water constraints. “Ten to 15 years ago for every ton of ore produced 1.5m³ of water was used, now mines use less than 1m³ .”

But while water supply was an issue, the greater problem was the government’s inability to quickly issue mining and water use licences, said Peter Leon, head of mining at law firm Webber Wentzel. The Department of Mineral Resources had admitted it was taking 284 days to grant a prospecting right and that in 2011-12 it had failed to meet its own targets in terms of issuing prospecting and mining licences in 82% of cases, Mr Leon said.

Claims were that the Department of Water Affairs was taking up to three years to issue a water use licence for a mine, while mining houses had only a year from the date that the Department of Mineral Resources issue a mining licence to start development.

Mr Leon said another problem was the plunge in investor confidence since the Marikana shootings.

Source: BDLive

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