APPENDIX A4: BACKGROUND INFORMATION DOCUMENT

FULENI ANTHRACITE PROJECT BACKGROUND INFORMATION DOCUMENT Reference Numbers DMR REFERENCE: KZN 30/5/1/2/1/10045 MR DAEA REFERENCE: DC 28/0035/2013: KZN/EIA/0001371/2013

BACKGROUND INFORMATION Ibutho Coal (Pty) Ltd (Ibutho) hereby advises that an application has been submittedto the Department of Mineral Resources (DMR) on 29 August 2013 for a New Order Mining Right Application (NOMRA) for the Fuleni Anthracite Project (Fuleni) and has subsequently received notification on 27 January 2014 that the NOMRA has been acceptedby the DMR. This notification triggers the commencement of the Environmental Impact Assessment (EIA) and Environmental Management Programme (EMP) process for the purposes of obtaining the necessary Environmental Authorisations required to commence with mining.

LOCATION Fuleni is situated on a portion of the farm Fuleni Reserve 14375 in Northern KwaZulu-Natal, approximately 45 km north-west of the town of Richards Bay. The MRA area is situated within the uMfolozi Local Municipality and the Uthungulu District Municipality respectively. The MRA covers 14,615 ha of the farm Fuleni Reserve 14375 and traverses 20 kilometres of rural Zululand countryside. Fuleni is bordered by the Umfolozi River to the north, the Richards Bay railway line to the south and Hluhluwe-iMfolozi Game Reserve to the north-west. The existing Somkele Anthracite Mine is located to the north-east of Fuleni.

PROJECT DESCRIPTION The potential for both opencast and underground mining has been identified and the estimated Life of Mine (LOM) for Fuleni is 32 years with a mineable resource of 35.7 Mt Run-of-Mine (ROM) for the opencast production and 1.8 Mt for underground production. The process design allows for the production of a primary Anthracite product suitable for the export and inland market and a lower grade middling product for the thermal market.

Fuleni Anthracite Project: Background Information Document (BID)

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Fuleni Anthracite Project: Background Information Document (BID)

LOCALITY MAP

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Fuleni Anthracite Project: Background Information Document (BID)

AERIAL IMAGE OF PROJECT LOCATION {Red line – NOMRA boundary; Black circles – houses / businesses; red blocks – schools

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Fuleni Anthracite Project: Background Information Document (BID)

MINING AND INFRASTRUCTURE LAYOUT PLAN

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PROJECT DESCRIPTION (cont.) The envisaged mining method for the opencast area is a conventional drill and blast operation with truck and shovel load and haul. Underground mining operations will commence from year 18 to the end of the mining schedule. Access will be from selected positions in the open pits and the coal will be mined through the typical bord-and-pillar methodology. A single production section is planned for all underground mining. After underground activities have been completed, the access to the underground areas will be closed with the final rehabilitation of the open pit. The proposed infrastructure to be developed includes • • • • • • • • •

Topsoil and overburden stockpiles; Haul roads and/or conveyor systems for ROM transport; ROM handling facility; Coal Handling Processing Plant (CHPP) with associated stockpiles; Pollution control dams; Temporary discard facility; Raw water storage facility(ies) and distribution systems; Access road to mine and for product transport; and Auxiliary infrastructure including workshops and stores, offices and change houses, sewage treatment plant, main electrical power supply and security fencing.

The washed coal will be transported via road to either a nearby siding on the Swaziland-Richards Bay railway line or directly to the Richards Bay Coal Terminal (RBCT) for export. The final discard material from the plant will be disposed of in mined-out open pits. In the event that these pits are unavailable due to existing mining activities, the discard material will be placed on a temporary surface discard dump, from where it will be reclaimed and dumped into the mined-out open pits towards the end of the mine life as part of the rehabilitation of the mining site.

MOTIVATION FOR THE PROJECT Anthracite is a carbon-rich, high quality coal whose key application is as a carbon feedstock (reductant), replacing coke in metallurgical processing industries, with a notable increase in the intensity of anthracite use i.e. as a substitute for coke in ferroalloy smelting activities. Other uses of anthracite include • • •

A smokeless fuel for domestic heating and similar processes, typically in urban areas where pollution restrictions apply; Pulverised fuel for power generation in the older type coal burning utilities, especially in Europe; and The manufacture of carbon-rich products, such as Soderberg electrodes and carbon blocks.

Anthracite competes with bituminous coals, chars and cokes as a reductant in the metallurgical industry, particularly in the production of ferroalloys. It also makes an ideal blend with high volatile matter thermal coal. The quality of the Fuleni primary product should be well accepted by overseas customers in India, Middle East, Europe and China. The steel and ferroalloy industries are key consumers of anthracite products, with Xstrata and Samancor as dominant players in the South African ferrochrome market. The secondary product is a thermal coal and will be typically accepted by Eskom.

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ENVIRONMENTAL AUTHORISATION Every applicant who applies for a mining right in terms of Section 22 of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) must conduct an EIA and submit an EMP for approval to the DMR. The MPRDA allows 180 days (6 months) for this process to be completed. Although the MPRDA governs environmental management in the mining sector, a number of the ancillary activities required for mining operations (such as the construction of pipelines and roads and the clearance of land)trigger the requirement for an Environmental Authorisationunder the National Environmental Management Act 107 of 1998 (NEMA) EIA RegulationsGN Nos. R.544-546 of 2010 and R. 922-923 of 2013. In addition, many activities will also trigger the requirement for water use authorisation in terms of Section 21 of the National Water Act 36 of 1998 (NWA), including (for example) taking water from a water resource, storing of water and disposing of waste in a manner that may detrimentally impact on a water resource. The final water uses applied for will depend on the final layout and position of infrastructure associated with the project. In addition to the NOMRA, application for Environmental Authorisation has been submitted to the Department of Agriculture and Environmental Affairs (DAEA) in terms of NEMA. Application to the Department of Water Affairs (DWA) for an Integrated Water Use Licence (IWUL) will be made once the mining and infrastructure has been finalised. It is important to note that no time frames are specified in the NEMA or the NWA for the Environmental Authorisation process, therefore the timeframes stipulated in the MPRDA will be applicable.

Mining rights application, minimum of 314 days Scoping Report Mining right application include EIA and EMP Includes desktop Mining Work baseline assessment Programme and Mining right Includes EIA / EMP

Social and Labour Plan. DMR issue acceptance letter in 14 days.

and initial public and public participation. Must participation results. be submitted 30 days Must be submitted after obtaining 180 days after acceptance letter. obtaining acceptance letter.

Fuleni Anthracite Project: Background Information Document (BID)

DMR to take decision to issue mining right within 120 days after receiving the EIA / EMP. Mining right only comes into effect once the EMP is approved.

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EIA PROCESS The EIA process in terms of the MPRDA requires the preparation of a Scoping Report within 30 days after obtaining an acceptance letter from DMR of the mining right application, and the submission of an EIA/EMP Report within a further 150 days thereafter. This EIA process is a comprehensive, independent assessment of all identified and potential environmental impacts. The aim of the EIA process is • •

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To provide technical information that will assist in the incorporation of effective mitigatory measures into the design and execution of the project; To provide Interested and Affected Parties (IAPs) with adequate information to understand the potential environmental and socio-economic impacts of the proposed project and opportunities for them to partake in the process; and To provide the competent authority with sufficient information to serve as a basis for sound decision making.

Public participation is the cornerstone of any EIA.The sharing and dissemination of all relevant information associated with the mining right application process forms an important component of thePublic Participation Process (PPP), and provides IAPs with the opportunity to participate in the process from the outset. The information provided by the IAPs is of crucial importance in the gathering of information, identification of issues andconcerns, and acquiring local knowledge that will contribute towards the design and implementation of the project in a manner that will promote minimisation of negative impacts and optimisation of benefits. The coordination andmanagement of the EIA process is being undertakenby an Independent Environmental Assessor, namely Jacana Environmentals cc (Jacana) with appointed specialists providing the required supporting data. Integrated Development Management Consultants(IDM) has been appointed by Jacana to facilitate the required PPP component of the EIA.

Scoping Phase Scoping is the first phase of the EIA process. The objective of the Scoping Phaseisto describe the environment, identify potential information gaps and to formulate an appropriate Plan of Study to ensure that the necessary information required for the EIA Phase is generated. The Scoping Phase entails the following processes • • • • •

Baseline / desk top environmental investigations which will be undertaken for the NOMRA area. Notification to IAPs (letters, advertisements, site notifications) with a request to register. Distribution of the Background Information Document (BID) to all registered IAPs with an invite for written comments and inputs. Focus Group meetings. Submission of the draft Scoping Report to the relevant authorities and making it available to IAPs for comment.

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EIA Phase A comprehensive EIAwill be conducted after acceptance of the Scoping Report and Plan of Study by the competent authority. The aim of an EIA is to ensure that the development occurs in a sustainable manner and to formulate ways for reducing or mitigating any negative impacts of the project whilst enhancing its benefits. The findings and mitigation measures are recorded in the EMP which becomes a legally binding document on approval. Impacts will be determined through a process of public consultation and participation, guidance from government authorities, specialist field assessments andimpact modelling, comparative assessments and experience with similar projects. The following will take place during the EIA Phase • • • • •

Continuation of detailed baseline environmental investigations. Impact assessment and modelling. Further information sharing with IAPs and authorities through notifications and BIDs. Public meetings. Submission of the draft EIA/EMP Report to the relevant authorities and making it available to IAPs for comment.

Environmental specialist studies to be undertaken In order to quantify how and where a project may impact on the environment, specialist studies are required to inform the EIA process and provide supporting specialist data.The following specialist studies have been identified and will be conducted during the EIA Phase • • • • • •

Biodiversity and Wetlands study Cultural and Heritage Resources assessment Soils, Land Use & Land Capability study Surface and Groundwater Resources study Air Quality and Noise assessment Socio- and Macro-Economic assessment

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PUBLIC PARTICIPATION PROCESS The PPP is a process in which IAPs are affordedan opportunity to comment on, or raise issues relevant to the mining activities and / or the EIA process, and stakeholders are invited and urged to • • • • •

Respond (by phone, fax or e-mail) to the invitation to participate in the PPP. Complete and forward (mail, fax or e-mail) the attached Stakeholder Registration and Comment Form to IDM. Attend the Public Meetings to be held during the course of the project. Contact the PP Team regarding any query, comment or request for further project information. Review the draft Reports within the review periods that will be stipulated in the advertisement as well as in personalised letters.

Responsibilities of an IAP IAPs have a right to participate in this process by requesting further information or by informing the relevant consultant of concerns regarding the environment in relation to the project. In order to participate in the EIA process, an IAP must • • •

•

Register on the project database. Inform any other parties (neighbours, friends, colleagues, etc.) who may be interested and/or affected by the project about the EIA process and encourage involvement and participation. Ensure that any comments regarding the project are submitted within the timeframes that have been approved or set by the authorities, or within any extension of a timeframe agreed to by authorities and the applicant. Disclose any direct business, financial, personal or other interest in the approval or refusal of the application for the project.

Responsibilities ofPPP consultants In terms of the EIA Regulations, the PPP consultants have the following responsibilities • • • •

Engage the key stakeholders, competent authority and IAPs. Provide sufficient information regarding the project and associated impacts. Ensure that all issues raised are recorded and forwarded to the environmental specialists to address in their impact studies. Facilitate a transparent process.

You have been identified as a potential IAP in this process and are therefore invited to participate in the project by registering. Your comments will ensure that all relevant issues are considered, documented and will assist in informed decision-making by the relevant authorities. Should you wish to register as an IAP and/or receive additional information regarding the project, you are requested to complete the form below and email, fax, post or hand deliver it to IDM Consultants per thedetails providedinthe Stakeholder Registration and Comment Form.

We invite all stakeholders to participate freely and to submit any comments or information you feel may be useful.

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FULENI ANTHRACITE PROJECT STAKEHOLDER REGISTRATION AND COMMENT FORM Title

Name

Surname

Company Designation Address Postal code Tel No.

Fax No.

Email

Cell No.

I would like to receive my notifications by (mark with X):

Post

Email

Fax

Please indicate why you have interest in the abovementioned project?

Please write your comments and questions here:

Please feel free to attach a separate document

Please add any person you think may be interested and affected parties: Full Name

Company

Address Email

Tel/ Cell No.

PLEASE SEND YOUR REGISTRATION FORM AND COMMENTS TO: Company IDM Consultants Contact person Karl Wiggishoff Address PO Box 37069, Overport, 4067 Tel No. 031 303 2836 Fax 086 649 8450 Email [email protected] Website www.idmconsultants.co.za Fuleni Anthracite Project: Background Information Document (BID)

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