PROPOSED VOLSPRUIT MINE, MOKOPANE DISTRICT, LIMPOPO PROVINCE. Background Information Document (BID) ESCIENCE ASSOCIATES (PTY) LTD.

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1 ENVIRONMENTAL IMPACT ASSESSMENT (EIA), MINING RIGHT APPLICATION AND OTHER ANCILLARY LICENSING PROCESSES: PROPOSED PLATINUM GROUP METALS MINE & ASSOCIATED INFRASTRUCTURE PROPOSED VOLSPRUIT MINE, MOKOPANE DISTRICT, LIMPOPO PROVINCE ESCIENCE ASSOCIATES (PTY) LTD POSTAL ADDRESS: PO Box 2950 Saxonwold 2132 PHYSICAL ADDRESS: 9 Victoria Street Oaklands Johannesburg 2192 Background Information Document (BID) TEL: +27 (0) CELL: +27 (0) March 2011 FAX: info@escience.co.za

2 PURPOSE OF THIS DOCUMENT The purpose of this Background Information Document (BID) is to provide information to Interested and Affected Parties (IAPs) on the Environmental Impact Assessment process, as well as related applications for authorisation and licensing, which will be undertaken for the proposed Pan Palladium South Africa (Pty) Ltd Volspruit Mine in the Mokopane District of the Limpopo Province. The BID is the first communication regarding the Environmental Impact Assessment (EIA) process, and serves as an invitation to register as an IAP and participate as a stakeholder throughout the EIA processes. This would include the opportunity to attend possible briefing meetings, review all reports generated, and submit comments during the process. The BID presents the first opportunity to provide comment, and your participation will assist in identifying any environmental and socio-economic issues that should be evaluated during these processes. EScience Associates (Pty) Ltd. (ESA), as independent Environmental Assessment Practitioners (EAP), was appointed by Sylvania Resources Limited and its subsidiary company Pan Palladium South Africa (Pty) Ltd to conduct the scientific investigations of the EIA, and to facilitate the associated legal and administrative application processes. For further information and/or to register as an IAP by submission of the attached Registration Form together with any initial comments, please contact: Mr Brian Gardner at EScience Associates: Tel: (011) / Fax: brian@escience.co.za INTRODUCTION & BACKGROUND Sylvania Resources Limited as well as its subsidiary company Pan Palladium South Africa (Pty) Ltd and the proposed Volspruit Mining Company (Pty) Ltd proposes the mining of two (2) open cast pits on the farm Volspruit 326 KR and the farm Zoetveld 294 KR near Mokopane in the Limpopo Province. It is proposed that various Platinum Group Metals (PGM s) will be mined on the site, and processed both onsite and offsite. The site is currently a greenfields site under intense agriculture. The development is expected to include access roads, administration buildings, various workshops, storage/ lay-down yards, salvage yards, sewage treatment plants, tailings storage facilities, waste rock dumps, return water dams, conveyors, product stockpiles and general waste disposal sites. An Environmental Impact Assessment (EIA) process is required for facilitating Pan Palladium and the proposed Volspruit Mining Company (Pty) Ltd to obtain an environmental authorization for the development of Volspruit Mine. The services of an Environmental Assessment Practitioner (EAP) as well as related Specialists in various fields are required in order to facilitate the EIA process and the compilation of the Environmental Management Programme Report (EMPR). EScience Associates (Pty) Ltd Page 2

3 Associated with the requirements stated above, and included in the scope of work for the entire EIA phase of the project is: An application for a Water Use Licence (WUL) in terms of the National Water Act (NWA) (Act 36 of 1998), including the compilation of an Integrated Water and Waste Management Plan (IWWMP) AN application for a Waste Management licence (WML) in terms of the National Environmental Management: Waste Act (NEMWA) (Act 59 of 2008) The compilation of an Environmental Management Program Report (EMPR) in terms of Mineral and Petroleum Resources Development Act (Act 28 of 2002) and in support of the Mining Right Application will be undertaken. An application for Scoping and EIA in terms of R543 of 18 June 2010 has already been made to the Limpopo Department of Economic Development, Environment and Tourism (LEDET), whilst the mining right application will be submitted to the DMR on completion of the draft Scoping report to the Limpopo Department of Mineral Resources (DMR). LOCALITY The study area for the EIA is located in the Limpopo Province of South Africa, some 18 km s south of the town of Mokopane. The farms making up the proposed mine area are currently used for agriculture, livestock grazing and game farming. Areas of the Farms are under intensive irrigation as there are a variety of commercial crops grown on the property. The farm has river frontage on the Nyl River, which lies to west of the property. The study properties are the farm Volspruit 326 KR and Zoetveld 294 KR. Figure 1 demonstrates the regional location of the proposed mine; Figure 2 depicts the property boundary of the subject farms in red, as well as the position of the ore bodies that are proposed for mining (yellow North, and green South ore bodies) and the 1:100 year floodline indicated as the blue line. The site is located in the Waterberg District Municipality, and falls within the Mogalakwena Local Municipality. The town of Mokopane (previously known as Potgietersrus) is approximately 20km to the North of the site, and the capital city of the Limpopo Province, Polokwane (formally Pietersburg) is approximately 60km s north of Mokopane. EScience Associates (Pty) Ltd Page 3

4 Figure 1: Regional locality map for Volspruit Mine Figure 2: Property boundary as well as the ore bodies that are proposed for mining (Yellow and green areas) as well as the 1:100 year floodline in blue EScience Associates (Pty) Ltd Page 4

5 PROJECT DESCRIPTION The project requires a Scoping and EIA process as set out in Regulations gazetted in Government Notice No. R543, promulgated under 24(5), 24M and 44 of the National Environmental Management Act, 1998 (NEMA) (Act No. 107 of 1998), known as the NEMA 2010 EIA regulations and in terms of the Mineral and Petroleum Resources Development Act (MPRDA), (Act 28 of 2002). Furthermore, the project will entail the following main aspects: Facilitate a site selection process, with the aid of the EIA, for tailing dams, process plants and other above ground infrastructure (including administration buildings, internal roads, storage/ lay-down yards, salvage yards, sewage treatment plants, tailings storage facilities, waste rock dumps, return water dams, conveyors, product stockpiles and general waste disposal sites). Undertake an EIA process for the proposed mine, including all pits and surface infrastructure, in line with the relevant legislation listed above, and any other legislation that is deemed to be necessary. Compile an Environmental Management Programme Report (EMPR) for the mining licence process in term of Section 39 of the MPRDA and Section 51 of Regulation 527 of Compile an Integrated Water and Waste Management Plan (IWWMP) for the Mine which will inform the submission of an Integrated Water Use licence application in term of Section 21 of the National Water Act (NWA) (Act. 36 of 1998) to the Department of Water Affairs. Application will be made for a Waste Management Licence (WML), which will be applied for under the National Environment Management: Waste Act (NEMWA) (Act 59 of 2008). A WML will be required to undertake a number of listed activities as defined in GN R 718 of 3 July 2009 for the storage, including temporary storage, of general and/or hazardous waste. Develop a Closure Cost plan which includes the total plan for rehabilitation leading to the issue of a closure certificate at the end of the life of mine which is estimated to be in 15 to 20 years. Strict adherence to the EIA process requirements as confirmed by the Competent Authorities (LEDET and DMR as lead authorities) as well as requirements of other adjudicating authorities for the above applications is stipulated as is a Minimum Requirement for this mining project. LEGAL & REGULATORY FRAMEWORK The National Environmental Management Act (NEMA), 1998, is South Africa s overarching environmental legislation, and contains a comprehensive legal framework to give effect to the environmental rights contained in section 24 of The Constitution. The proposed project would trigger several listed activities, which may not commence prior to obtaining an Environmental Authorisation in terms of Section 24 of NEMA, or a Waste Management Licence in terms of Section 20(b) of the National Environmental Management: Waste Act (NEMWA), or a Water Use Licence in term of Section 21 of the NWA. A full inventory of the listed activities can be requested from the EAP. Due to the nature and/or scale of some of these activities, both NEMA and NEMWA require that the potential environmental impacts must be considered, investigated, assessed and reported on to the competent authorities through a detailed Scoping and Environmental Impact Assessment (EIA) process, described in the NEMA 2010 EIA Amendment Regulations of 18 June EScience Associates (Pty) Ltd Page 5

6 The MPRDA also requires a Scoping and EIA process to be undertaken that will inform the compilation of an Environmental Management Programme Report (EMPR). The objectives and reporting format for the required MPRDA scoping process are mirrored by those required for the environmental authorisation and waste licensing procedures. As such, a single Scoping and EIA process and reports would be compiled that conforms to the regulatory requirements of NEMA, NEMWA and the MPRDA in relation to the identification of potential environmental impacts resultant from the proposed Volspruit Mine. In terms of the Integrated Water Use Licence Application (WULA) for the proposed mine, the National Water Act (NWA), 1998, aims to manage national water resources in order to achieve sustainable use of water for the benefit of all water users. This requires that the quality of water resources is protected, and integrated management of water resources takes place. As indicated, a water use licence will be applied for in terms of Section 21 of the NWA, which will be supported by a detailed IWWMP, for submission to the DWA Limpopo Province Regional Office. A preliminary list of Section 21 water uses which will be applied for include (but is not limited to) the following: (a) taking water from a water resource; (b) storing water; (c) impeding or diverting the flow of water in a watercourse; (d) engaging in a stream flow reduction activity contemplated in section 36; (e) engaging in a controlled activity identified as such in section 37(1) or declared under section 38(1); (f) discharging waste or water containing waste into a water resource through a pipe, canal, sewer, sea outfall or other conduit; (g) disposing of waste in a manner which may detrimentally impact on a water resource; (i) altering the bed, banks, course or characteristics of a watercourse; (j) removing, discharging or disposing of water found underground if it is necessary for the efficient continuation of an activity or for the safety of people; WHAT IS AN EIA? An Environmental Impact Assessment is a methodical and systematic process to identify potential positive and negative impacts on the bio-physical, socio-economic and cultural environment that may result from a proposed activity. The EIA aims to ensure effective compliance and governance concerning the sustainable use of environmental resources, while simultaneously focusing on key issues such as stakeholder empowerment, and providing access to relevant and concise information to enable informed decision-making. The EIA process is also used to examine alternatives and management measures to minimise negative and optimise positive impacts. The ultimate objectives of the EIA process are to prevent significant detrimental impact on the environment and to ensure sustainable development. The EIA has to consider the different perspectives and requirements of all role players, who derive different benefits from participating in the EIA process. These include the following: Decision-making Authorities:- Enables informed decision making; EScience Associates (Pty) Ltd Page 6

7 Ensuring protection of environmental quality; Supporting the management, monitoring and sustainable utilisation of resources; Understanding demands on bulk services, waste disposal sites, etc. Project proponents / Developers of identified activities:- Proactively considering environmentally sustainable design principles; Investigating natural resource opportunities and constraints; Identifying the risks and opportunities associated with environmental aspects; Evaluating the potential for pollution and the prevention thereof; Optimising energy, water and other resource use. Interested and affected parties:- Providing an opportunity to be informed and give comment / express concerns; Protecting environmental rights; Utilising local and indigenous knowledge; Increasing knowledge and environmental awareness; Informing the decision-making process. EScience Associates (Pty) Ltd Page 7

8 Figure 3: The scoping and EIA process flow in term of Regulation 543 of 18 June EScience Associates (Pty) Ltd Page 8

9 PUBLIC PARTICIPATION PROCESS The public participation process during the entire process will consist of the following main activities: NOTIFICATION of IAPs regarding the commencement of the process, consultation activities and availability of reports and decisions by the authorities, using a variety of mechanisms. KEY STAKEHOLDER MEETINGS with relevant stakeholder groups (groups of role players with similar interest, such as the tourism and agricultural sector, local government, etc.). PUBLIC MEETINGS that will be advertised. These will provide IAPs with information and opportunities to record concerns, issues and suggestions, as well as to identify other IAPs. COMMENT PERIODS (30 calendar days) will be communicated to all IAP s for the review of all reports. This is in order to provide registered IAPs with the opportunity to review and comment on the information and reports compiled through the process. Everyone has the right to be involved in decisions that may affect them. Participation in the process as an IAP is in everyone s best interest because: It provides opportunities for IAPs and the authorities to obtain clear, accurate and understandable information about the expected environmental and socio-economic impacts of the proposed development/s. It provides members of the public with the opportunity to voice their concerns and to raise questions regarding the project. It provides IAPs with the opportunity to suggest ways for reducing or mitigating any negative impacts of the project, and for enhancing its benefits. It will enable the project proponent to consider the needs, preferences and values of IAPs in their decisions. It provides opportunities for the clearing up of misunderstandings about technical issues, resolving disputes and reconciling conflicting interests. It is vital for ensuring transparency and accountability in decision-making. It contributes toward maintaining a healthy, vibrant democracy. You are important to the process and we urge you to participate by registering as an Interested or Affected Party (Registration Form attached). The sharing of information forms the basis of any stakeholder engagement process and offers IAPs the opportunity to become actively involved in the project from the outset. It also plays an important role in the understanding of environmental investigations, as input from IAPs helps to ensure that all potential issues are considered in the EIA, WULA, WML and EMPR process. EScience Associates (Pty) Ltd Page 9

10 IAP REGISTRATION FORM (REF: SRVM) Please complete and return to EScience Associates, either on or before 10 th May 2011, by means of the following (or alternatively phone Brian Gardner at (011) / ): brian@escience.co.za; or Fax: ; Post: PO Box 2950, Saxonwold, 2132 PERSONAL DETAILS: Title: Initials: Surname: Company / Organisation (if applicable): Position/Nature of involvement (e.g. property owner): Street address: Postal address: Tel (incl. area code): Fax number: Cell: I want to receive correspondence/updates regarding the project: YES / NO Preferred method of communication: Post / Phone / Fax / COMMENTS/QUESTIONS: 1. Do you have any specific interest in the proposed project? 2. What issues, comments and concerns would you like to raise with regard to the proposed EIA and public participation process? 3. What potential impacts do you foresee associated with the proposed project? 4. Are there any other role-players/stakeholders that you feel we should consult with? (please state name & contact details)? EScience Associates (Pty) Ltd Page 10