The long term sustainability of mining is arguably the biggest challenge facing our industry in South Africa, both from an employment, environmental and operation point of view, with volatile political scenarios playing out in a backdrop of fluctuating operation costs that need to be navigated with tremendous skill.
Despite the recent uptick in mining outlook, the key issues of red tape, ‘insider trading’ and compliance still raise their ugly heads. To navigate the plethora of challenges so you can reach the pot of gold, you will need sound legal advice to avoid costly court battles and downtime that can kill any business. One of the most outstanding young lawyers in the field of mining, Nicholas Veltman, has been making his mark at famed law firm Hogan Lovells. He has been assisting and representing various mining houses and construction companies with investigations and inquiries conducted by the relevant authorities, in terms of the Mine Health and Safety Act and the Occupational Health and Safety Act. His experience extends to commercial litigation and arbitrations, as well as general corporate and commercial work. More recently, he has become involved in renewable energy power projects and construction contracts including standard form FIDIC, bespoke construction and EPC contracts. A promotion to partner at Hogan has added to his arsenal.To find out more I caught up with the likeable Veltman in Cape Town recently.
Sustainability has been the talk of the town in 2017, what are the key sustainability issues facing the industry?
At the moment one of the key issues we are looking at is how do you on-look from sustainability. Guys are currently looking at water and how we deal with that and the question is, once you’ve set up model facilities that allow for sustainability as we see it, how do we go past that, how is that managed, who are the role players, who will step in. That’s one of the key questions being asked during this process.
Mine closure is a big talking point, what are some of the innovative ways we can close mines, and reuse them agriculturally, for example?
The typical idea of let’s cover up the hole, replant the grass, replant the trees and move on is changing. The idea now is to take the current facilities that have been developed — not knock them down — and use them for other mechanisms, other facilities. One in particular that’s being considered at the moment is agriculture, so keeping the office buildings, keeping the facilities that have been placed there and changing it into another facility.
After some recent high profile cases, it appears that the courts are deciding some of the decisions around mining these days. Do you see more of that happening?
We do see a lot more of that happening, we’ve had two recent judgments, two recent matters that have appeared in court, one being on the Health and Safety side of the mining industry and then one being on the administrative regulatory side. The first was the Aquila judgment where certain aspects were dealt with in court, and the DMR were extensively criticised for delays in the process, double-granting of rights, etc. The second one was the Anglo Gold Ashanti judgments in relation to the Section 54 instructions issued, and I suppose there’s also a third with Sibanya Platinum issuing summonses to the Minister for losses of income as a result of health and safety stoppages.So we’re seeing a lot more of it come to court, and whether or not it’s a good thing is open for debate, certain discussions still need to be had with the government and with the role players. Moving forward the less there’s that collaborative approach, then we’re going to see a lot more matters going to court to be decided.
Does that almost paint a picture of what it might be like in the future where you have an independent arbitrator deciding on issues instead of the DMR?
It might have to go that way. We’re sitting with various judges, who are sitting in various positions within our court system, and not all have mining experience and mining background or the relevant technical abilities in terms of the law. It may be one of two things: getting assessors in who are trained in the law and able to deal with the law, and having them sit in those positions or alternatively independent arbitrators coming in and having those discussions and getting it sorted.
Onto the water use license issue, talk is that has been streamlined, shorter timeframe for that, are you satisfied we’re going in the right direction?
We are going in the right direction, it’s not happening as fast as industry would like it at this point in time. There is a streamlining process but again not as quickly as we were hoping, but it’s moving in the right direction.I was chatting to your colleague from Denver, Colorado and it seems as if they’re grappling with similar issues that we’re grappling with. We’ve got our set of problems but it’s interesting to hear what they’re going through.We’ve had various discussions and that’s why the footprint that we’ve got now internationally with the United States and with Europe shows that, where we can compare on issues that they’ve either had previously or issues that they’re currently dealing with that we have in South Africa. Whether it is on their oil and gas side, compared to our mining side, it’s essentially the same principles that flow through, and the more we engage internationally the more we can avoid stumbling blocks. We don’t have to learn through new mistakes, we can essentially follow that international trend from the outset.
As we look forward to the rest of the year where do you see the key opportunities and possible stumbling blocks?
The key opportunities are that we’ve come out, or are on our way out of the economic slump, we’ve seen a lot of big mining houses restructure, we’ve seen a lot of the smaller mining companies restructure, and we’ve seen a lot of the bigger mining companies give away — not give away —but shed assets which then placed those assets in other hands. The outlook is positive, we’re going to continue to mine, which is great. So the industry has looked at that downturn, has put their heads down and they’re moving in a direction, which is positive. Stumbling blocks are that we’re still sitting with a bit of legislative uncertainty, you know undertakings from the Department, that we will have certain documents out at certain times which allows for slight investor uncertainty about investments. Moving forward and taking into account that we’ve just come out of a difficult economic situation: what are those documents going to do to the mining industry, what are the costs going to be and how do we take it from there —that’s a further consideration and challenge that we have to consider to get through the scenario.
