Industrial Opportunities in Mining Areas: Technical, Economic, and Regulatory Considerations

Thursday 25 November 2021 | 14h00-17h00 SAST | Virtual (MS Teams)

The Resilient Futures CoP invited policy-makers, academics, and industry stakeholders to a virtual workshop featuring new research from Phase 2 of this novel interdisciplinary project. The programme included CoP researchers and guest speaker experts, presenting on:

  • Biorefinery as a pathway to building economic complexity in the post-mine landscape - extending work explored in CoP1, this concept considers fuelling a multi-product value chain by maximising resource efficiency, in terms of value addition in the post-mine landscape (view slides)
  • Legal-theoretical analysis on the economic viability of rehabilitating abandoned mining areas, as an exploratory study of the support in the legal framework for using fibrous plants in mine land rehabilitation (view slides); and
  • The importance of post-closure development of coal mines in the context of the Just Transitions (view slides).

View the Workshop Agenda.

Workshop Summary

Prof Sue Harrison delivered the welcome, sharing that the purpose of the meeting was to brainstorm and engage critically on the issues of building a post-mining economy. The idea is to remediate and valorise renewable feedstock while balancing job creation, capital investment and strengthening economic complexity, and the CoP has been very valuable in bringing different aspects and opinions into our familiar workspaces. We bring all the different aspects together in a way that informs economic, industrial and policy recommendations in South Africa.

Session 1: The Biorefinery as a Pathway to Building Economic Complexity in the Post-Mins Landscape (Francois Steenkamp and Shilpa Rumjeet)

  • Shilpa began by giving an overview of CoP I and how we discovered that fibrous plants could be proposed as viable alternatives for manufacturing products to build complexity.
  • Some of the technologies that we would need to process our products are still in the research stage, but the world is moving forward so a biorefinery does offer us a very useful way forward.
  • Mapping products to the trade data was an iterative, cross-disciplinary process.
  • Hard to distinguish between bio-based and mineral-based energy products, so this could be a limitation.
  • Could choose the paths for diversification along different lenses (e.g. social inclusion, pure complexity, etc.)
  • One of the key things to look at after identifying the products is the technological feasibility of producing the relevant products.
  • Identify clusters of products that we can then investigate as to their effects on PCI, inequality, etc.

Q&A

  • Is there a way to apply a type of constrained optimization solution concept to this and introduce decision-making along a number of different avenues?
    • Look at downstream production processes and maybe compare yield percentages of products, etc. Also consider things like water usage, etc.
    • Perhaps we could come up with an algorithm that ranks products according to the aspects we want to prioritise.
    • Talking about “early selection phase” – so would want to keep data as disaggregated as possible. Maybe nice to have all the criteria separately – e.g. job intensity and resource intensity – but we want to keep this fairly disaggregated.
  • Is the choice of products site-dependant and dependant on the infrastructure that exists already?
    • The success of this whole system depends very heavily on the land structure.
    • Perhaps we will need another technique to clean the land if it is very heavily degraded (e.g. hyper-accumulators)

Session 2: Legal-theoretical Analysis on the Economics Viability of Rehabilitating Abandoned Mining Areas (Louie van Schalkwyk & Bernard Kengni)

  • Looking at how well the law caters for the solutions put forward by the economic and scientific communities.
  • Consider a number of legal frameworks to facilitate the process of fibre-farming (e.g. lack of transfer duties for land donation)
  • We want to encourage proactive law-making

Q&A

  • At what point does a land become zoned as “agriculture”; does it depend on output or activity?
    • Well, it depends on what you initially stated to the municipality. If you initially declared it as part of your mining rehabilitation, then there might be a grace period. However, if you didn’t declare it, then you will have to rezone from the beginning.
    • One challenge is that different municipalities have different bylaws and levels of detail in their processes.
    • For example, where mining and agriculture are less prevalent, then there is less detail on how the process should be carried out and there is less detail in the bylaws about what is and isn’t permissible.
    • Always a best bet to try and prioritise finding a functioning government even if it means there are a few more hoops to jump through.

Session 3: Panel on The legal/regulatory perspective

Chair - Hanri Mostert: The imperative to move away from coal as our primary energy source in South Africa. How do we ensure the just transition, and what needs to occur for the just transition to occur in the way that we need it to in South Africa?

Bernard Kengni: Energy generation via coal is not sustainable because coal is non-renewable. Also, coal mining causes pollution and threatens people’s wellbeing. So, by relying on sustainable development, we can render abandoned/closed mine sites economically viable and profitable. Right now, we have to filter through a lot of legislation to find out what aspects of the law apply to different sites; maybe we need a specific policy or legislation to guide our just transition.

Olivia Rumble: Been working on the Climate Change Bill. This tried to define and describe the just transition in a first draft, however at a very high level with fairly vague language. Individuals have asked for more concrete things to “hang their hats on” to give effect to the just transition. The just transition is a frustratingly vague concept, but the fact that we as South Africa have defined it is a progressive step forward. Definition suggested includes not just labourers and labour markets, but also the surrounding communities. Concerns with the Bill in current form: while it charges the Presidential Climate Commission to engage with and deal with the just transition.

Kennedy Chege: What are the challenges you see coming out of this work and the policies that have been put forward? A report put forward that climate change is actually a form of market failure because the cost of greenhouse gases are not actually correctly internalized into goods and services. There is another document put together that acts as a “Vision pathway” for South Africa’s energy sector up to 2030. We also have the Electricity Regulation Act of 2006 which regulates the electricity supply of South Africa. South Africa really requires funding resources, which are currently scarce, so we need to make sure that we mobilise funders to get money in to support the energy transition; South Africa also has a skills gap in the area of renewable energy, which needs to be filled to enable a just transition; we also need renewable energy to become more competitive against non-renewable energy.

Saul Roux: Have done a lot of sustainable energy transitions and looked at CoCT as a case study and tried to frame what a just transition is in this context; also asked what is the role of local government? Without local government involvement, a just transition cannot be achieved. There are massive barriers in municipal legislation that hinder the progress of a just transition. There are struggles and contentions between policies that are good for our carbon commitments, but which are not good for the revenue models.

Margareet Visser: What is the impact of the political economy on sustainable growth? Maybe we could focus on low-productivity agriculture sectors to turn them into high-productivity industries and encourage economic growth. However, there is a problem here where we have malcontent amongst workers in agriculture, for example, because of low wages. Need to think about the approaches to using agriculture because it can lead to its own issues.

Jacqueline Yeats: We have moved from a shareholder approach to a stakeholder-inclusive approach (environment, communities, etc.) over the past decade. The Companies Act is having changes promulgated. One of these changes relates to a social and ethics committee, which aims to place liabilities on companies so that they start considering the interests of their stakeholders when undertaking this just transition. Company law is developing rapidly globally, socially, environmentally to deal with issues relating to the just transition.

Helena Stoop: Our constitutional dispensation puts us in a really good, unique position in SA. The legislation stops a little bit short, and so a little bit more needs to be done to help move us away from the profit-maximisation approach we have driving firms now. We want to avoid putting legislation together that makes firms just engage in a tick-box exercise. We don’t want people to do the bare minimum to meet their requirements.

Richard Cramer: What do you expect in terms of resistance from a free market perspective about the notion of properties? There may well be pushback from traditional property theorists, but there has been a movement towards more progressive thoughts in both the academic sphere and in the courts themselves. Abandonment of land ownership in the South African context is not possible. Not allowing the abandonment of land ownership is a means to ensuring and enforcing the obligations of ownership. Perhaps the larger concerns who sell their rights (because the person who is awarded rights can sell them on to smaller concerns)on should be held more accountable for their land.