In 2011, Groundwater Consulting Services (Pty) Ltd (GCS) was appointed by Kangra Coal as the Environmental Assessment Practitioner (EAP) responsible

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1 1 INTRODUCTION 1.1 OVERVIEW Kangra Coal (Pty) (Kangra Coal) is currently operating under the Consolidated Environmental Management Programme (EMPr) (authorised: 22 July 2014, executed: 13 August 2014) (DMR, 2014: MP 30/5/1/2/2/133MR) (Annex 1A). The life of mine (LoM) for Kangra Coal Maquasa East, Maquasa West and Maquasa West Extension mining operations is approximately 3 years. Kangra Coal is working intensively to develop new mining operations to extend the current operations. This Draft Environmental Impact Assessment Report (EIAR) and Environmental Management Programme report (EMPr) has two objectives: To incorporate a section of the Maquasa West Extension (previously under MP 30/5/1/1/2/209MR, Authorised 15 August 2008, Annex 1B) into the current EMPr. This section was previously omitted from the current Consolidated EMPr for 133MR approved in 2014 and will hereafter be referred to as the Maquasa West Extension (MWE) underground works. To include the following new infrastructure: o a proposed new adit (Adit 5) (for accessing the MWE underground works); o a proposed new overland conveyor and servitude road connecting the new Adit 5 with the existing conveyor at the Maquasa West operations; and o a new Central Discard Dump at Maquasa East operation, into the current Consolidated EMPr (MP 30/5/1/2/2/133MR, hereafter referred to as 133MR). Environmental Resources Management (Pty) Southern Africa (ERM) has been appointed as Environmental Assessment Practitioner (EAP) for this Section 102 Amendment application. This Draft EIAR and EMPr summarises the process followed to date, outlines the legislative framework, provides a description of the project and the project alternatives considered, as well as the biophysical and socio-economic conditions of the study area. It also provides an assessment of the impacts of the proposed project activities on the surrounding biophysical and social environment and detailed recommendations on how negative impacts can be mitigated and positive effects enhanced. 1.2 PROJECT BACKGROUND In 2011, Groundwater Consulting Services (Pty) (GCS) was appointed by Kangra Coal as the Environmental Assessment Practitioner (EAP) responsible 1-1

2 for undertaking the necessary environmental authorisations for the expansion of Kangra Coal mining operations. In June 2013, GCS on behalf of Kangra Coal, submitted a Section 102 Amendment Application in terms of the Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA) to the Department of Mineral Resources (DMR) for the consolidation of all existing EMPr s at Kangra Coal s Maquasa operations. Kangra Coal also intended to expand the Maquasa mining operations with the addition of new opencast pits, the addition of new underground mining areas to be accessed from some of the opencast pits, and the associated rock discard dumps. As such the consolidated Section 102 Amendment application was updated and resubmitted by GCS in May 2014 to the DMR (GCS, 2014). This Section 102 Amendment application and the Consolidated EMPr (133MR) was subsequently authorised by DMR on 22 July 2014 and executed on 13 August In November 2014, Kangra Coal appointed ERM to undertake a Section 102 Amendment application to include the new Adit 5 at the Maquasa West Extension area, an overland conveyor and a servitude road, connecting the new Adit 5 with the existing conveyor at the Maquasa West operations, into the approved Consolidated EMPr (133MR). The new infrastructure was intended to facilitate access to the mining operation held under the former 209MR, as well as the potential future mining operations at Kusipongo (MP30/5/1/2/2/10099 MR). At the same time ERM undertook a Basic Assessment (BA) for environmental authorisation of the overland conveyor, road servitude and Adit 5. During this process it was discovered that the Consolidated EMPr (133MR) approved on 22 July 2014 had by oversight omitted some of the underground mining activities of the former 209MR. The omission of the activities of 209MR affected the environmental authorization application of the overland conveyor, road servitude and the new Adit 5. The process described in this EIAR thus aims to include the omitted MWE underground mining activities (sections of the former 209MR), the new Adit 5, the overland conveyor and servitude road, and proposed Central Discard Dump (GCS, 2016) into the Consolidated EMPr (133MR). These activities will result in the amendment of the current Consolidated EMPr (133MR). 1.3 THE PROPONENT The project proponent is Kangra Coal (Pty). Kangra Coal was previously a privately owned company called Zinzan Property Holdings Incorporated, and the name was changed to Kangra Coal (Pty) on 21 January In 2004, the South African investment company Shanduka Group became a significant minority shareholder. In 2007, the Spanish utility Union Fenosa (now merged with Gas Natural and known as Gas Natural Fenosa) acquired the majority 1-2

3 stake, with Kangra Coal becoming a subsidiary of Union Fenosa Mineria (mining brand of the main group). Shanduka Group has recently been bought by Phembani Group (Pty). The current share allocation is 30 percent Pembani Group and 70 percent Gas Natural Fenosa. The proponent in the application is: Kangra Coal (Pty) P O Box 745 Piet Retief 2380 Contact Person: Mr Marcos Moledo Farm Driefontein Driefontein 2302 Tel: +27 (0) Mobile: +27 (0) marcos@kangracoal.co.za 1.4 TITLE DEED DESCRIPTION Table 1.1 provides the Title Deed descriptions for the farm portions applicable to the entire existing Kangra Coal mining right area (split as per operational areas: Maquasa East, Maquasa West and Maquasa West Extension). Table 1.1 Title deed description of farm portions comprising 133MR APPROVED EMPR FARM NAME PORTION NUMBER TITLE DEED OWNER Maquasa East Maquasa 19 HT Remaining extent T145840/2004 Kangra Coal Pty Roodekral 21 HT Remaining extent T47074/2005 Kangra Coal Pty Rooikop 18 HT Maquasa West Rooikop 18 HT Maquasa 19 HT Nooitgesien 381 IT Portion of mineral area 1 on the remainder Portion of mineral area 1 on the remainder Portion of Mineral area 1 Portion of the remainder T78816/2004 Kangra Coal Pty T78816/2004 Kangra Coal Pty T145840/2004 Kangra Coal Pty T36896/2006 Kangra Coal Pty 1-3

4 APPROVED EMPR Maquasa West Extension FARM NAME PORTION NUMBER TITLE DEED OWNER Kransbank 15 HT Portion 1 T139369/2000 Ekaluka Communal Property Association Kransbank 15 HT Portion 2 T139369/2000 Ekaluka Communal Property Association 1.5 DETAILS OF THE EIA TEAM The core team members involved in this EIA process are listed in Table 1.2 with CV s included in Annex A. Table 1.2 The EIA Team Name Role Qualifications, Experience Max Clark (ERM) Partner in Charge BSc, MSc, PhD > 25 years Kate Hamilton (ERM) Project Manager BSc (Hons), 10 years Alan Cochran Technical Assistant BA (Hons), 10 years Lisa Otten (ERM) Project Consultant BSc (Hons), 4 years The ERM EAP contact details are provided below. Contact person: Kate Hamilton Address: 1 st Floor Building 32, Woodlands Office Park Woodlands Drive, Woodmead Johannesburg Tel: +27 (0) kate.hamilton@erm.com 1-4

5 As Groundwater Consulting Services (GCS) Pty () performed the role of EAP for the Central Discard Dump studies their contact details are included below: Contact person: Karin Loukes 4a Old Main Road Address: Judges Walk, Kloof 3610 Kwazulu-Natal Tel: +27 (0) As the EIA and EMPr for the MR209 was undertaken by Oryx environmental Consultants in 2008, the CV of the lead EAP consultant, Greg Martindale, has been included. Contact person: Greg Martindale The relevant EAP CV s are included in Annex 1C. 1.6 RELEVANT AUTHORITY The proposed Project will require a Section 102 Amendment in terms of the MPRDA from the Mpumalanga Department of Mineral Resources (MDMR): Mpumalanga Department of Mineral Resources (MDMR) Private Bag X7279 emalahleni (Witbank) 1035 Contact Person: Mrs. Martha Seshweni Tel (w): +27 (0) Fax: +27 (0) Application for Mining Rights Reference Number: MP 30/5/1/2/2/133MR 1-5

6 1.7 PURPOSE OF THE REPORT The purpose of the EIAR is to document the findings of the EIA process. The objectives of toe EIAR are to identify the potentially significant environmental issues relating to the construction, operation and decommissioning of the new Central Discard Dump, the new Adit 5 and the overland conveyor, and the MWE underground works, and to assess these in relation to the existing mining activities being undertaken at Kangra Coal. Mitigation and management measures are also identified to reduce/minimise impacts on the environment due to project related activities and are described in an EMPr. The EIAR also includes a description of the stakeholder engagement process undertaken to date. The key issues raised by stakeholders through the consultation activities have been assessed and where necessary have informed the environmental studies undertaken to produce this EIAR. This report has been compiled in accordance with the South African EIA Regulations (December, 2014) and will be submitted to the MDMR for review. 1.8 REPORT STRUCTURE The structure of the remainder of this Report is outlined in Table 1.3. Table 1.3 Outline of the report structure Section Section 1 - Introduction Section 2 Project Description Section 3 Alternatives Section 4 Legal and Policy Framework Section 5 Biophysical and Socioeconomic Baseline Section 6 Public Participation Process Chapter 7 Identification and Assessment of Environmental Impacts and Environmental Management Programme Chapter 8 Monitoring Management Programme Contents Presents a brief background to the Project, the EIA team, and the purpose and structure of the report. Describes the Project components and Project Area as well as the need and desirability of the project.. Describes the various alternatives that were assessed for the Project including; location, site layout and technology alternatives. Describes the legislative, policy and administrative requirements, as well as international good practise and standards/guidelines applicable to the proposed Project. Provides a detailed baseline assessment of the receiving physical and biological environment in the Study Area. Summarises engagement activities with Interested and Affected Parties for the EIA Project Presents the predicted impacts to the physical and biological environment as a result of the proposed Project and associated mitigation Outlines procedures essential for effectively monitoring social and environmental mitigation/management measures 1-6

7 Section Chapter 9 Environmental Emergency Response Plan and Environmental Awareness Plan Chapter 10 Financial Provision Chapter 11 Environmental Rehabilitation Programme Chapter 12 Environmental Impact Statement Chapter 13 References Contents Outlines procedures for effective education of employees, contractors and their subcontractors on social and environmental matters and responsibilities Outlines procedures essential for effectively containing emergency situations for the proposed Project Presents a cost estimate for environmental rehabilitation and closure of the proposed Project Details the framework which aims to address environmental issues related to rehabilitation, decommissioning and closure of the proposed Project Summarises the key findings of the EIA Study and makes a statement in terms of the environmental impacts. List of all references contained in the Report. 1-7