Armadale Capital Regulatory News (ACP)

17 Apr 2008 17:36

Watermark Global PLC17 April 2008 Announcement Watermark Global plc announces OPEN DAYS at Pilot Plants Attached to this announcement is a media release which was released today by WUC(a wholly owned subsidiary of Watermark Global Plc) in relation to the threeOpen Days being sponsored by WUC to inform government, regulators, miningcompanies, media and other interest groups about the water treatment projectsbeing undertaken by WUC. For further information contact: Jaco SchoemanManaging DirectorWestern Utilities CorporationTel: (0027) 12 661 2602Fax: (0027) 12 661 3609Email: jschoeman@wucsa.com PRESS RELEASE MEETING AN ENVIRONMENTAL CHALLENGE WITH AN ENVIRONMENTAL SOLUTION 17th April 2008 As a result of more than a century of mining activity, an extraordinaryenvironmental challenge has arisen in the Witwatersrand's Western Basin - andthe industry players drawn into it have come together to develop an effective,sustainable solution. Jaco Schoeman, the CEO of the Western Utilities Corporation (WUC) explains, "South Africa is a water-scarce country where potable (ie drinkable) watersupplies are limited in certain areas and significant quantities of contaminatedwater in others." "The environmental challenge is twofold. First, how to overcome thecontamination of potable water sources inadvertently caused by decades of goldmining activity; and second, how to satisfy the ever increasing demand forgreater volumes of potable and "grey" (ie industrial quality) water by industryand the surrounding communities." In the past decade - while demand on domestic, agricultural and industrial waterresources across the country has steadily increased - availability has beencompromised by the fact that potable water sources in the Witwatersrand Basinare threatened by contamination from Acid Mine Drainage (AMD). (AMD is a sulphuric acid solution that is generated when exposed ore comes intocontact with water and air. In this case, mining operations across the Witwatersrand complex, created underground voids that subsequentlyfilled with natural seeping water and began to discharge into the surroundingwater courses.) The Western Basin Decant Currently discharging at an annualised average rate of 15 Megalitres per day,it's a situation that poses a severe environmental threat. Not only to waterresources and the fast-growing domestic and commercial populations that dependupon them, but also to one of the world's most historically important andenvironmentally-sensitive sites - the Sterkfontein Caves. Unless the seepage is effectively addressed, the potential exists for thiscontaminated water to enter, and irreversibly damage, the caves - which formpart of the 3.5 million year old Cradle of Humankind - and the nearbyKrugersdorp Nature Reserve. "It is an irony," says Schoeman, "that the gold mining industry, that has madesuch a significant, and positive, contribution to South Africa's economy in thepast century, should be at the centre of an issue which has such potentiallydetrimental consequences for one of the regions in which it has been mostactive." The South African government places the onus for redressing the problem squarelyon the mining industry and the Department of Water Affairs & Forestry (DWAF) hasissued a directive that no mining house will be permitted to proceed with theformal closure of any operations in the area until the issues surrounding theaffected water have been satisfactorily addressed. Although several of the key mining players in the region closed their operationsbefore the problem became apparent, it's a responsibility the broader industryacknowledges. "Those of us still involved in mining on the Reef accept that wehave a moral imperative to resolve the water problems and, together, haveinnovated a solution that has the potential to overcome the twin challenges ofcontamination and burgeoning demand simultaneously," says Schoeman. As an interim measure (to demonstrate corporate responsibility), the majority ofcontaminants are being removed by neutralising and clarifying the water atexisting water treatment plants at Mogale Gold Mine and Harmony Gold Mine. However, to fully address the problem, a Section 21 not-for-profit organisationhas been jointly established by Randfontein Estates Gold Mines Ltd (owned byHarmony Gold Mining Company Ltd), West Wits Gold Mines (owned by DRDGold) andMogale Gold Mines Ltd (owned by Mintails RSA (Pty) Ltd). "Known as the Western Basin Environmental Corporation (WBEC), its function is togovern the process of environmental water rehabilitation associated with AMD,"says Schoeman, "and to investigate and develop sustainable initiatives in closeconsultation with the relevant government authorities." WBEC's imperatives are to: • Rehabilitate the contaminated water that is already decanting from the underground voids of the Western Basin; • Minimise further contamination of potable water sources; • Preserve the Sterkfontein Caves by mitigating the risk of exposure to AMD; • Reduce off-take of potable water sources by industrial users by making an alternative available in its place • Minimise the transmission of AMD to sensitive downstream areas (ie the Cradle of Humankind) by reducing the water level in the underground voids WBEC has been granted the right to register as a Water Services Provider (WSP),which entitles it to remove the water associated with its own mines, treat it toa specified quality and to on-sell it to the industrial market. "It is important to stress," says Schoeman, "that although none of the mininghouses involved in WBEC will profit financially from the treatment and sellingof AMD, all will ultimately benefit from its success by being able to implementclosure strategies for their mining operations." To implement and manage this self-sustaining process, WBEC has entered into amanagement agreement with the Western Utilities Corporation (WUC) which willconstruct a state-of-the-art Water Treatment Plant capable of processing 75Megalitres of Acid Mine Drainage (AMD) per day to industrial ("grey water") quality. "The plant will make use of a chemical precipitation treatment process that hasthe capability to remove heavy metals and sulphates from the contaminated water," says Schoeman. "It also uses a pyrometal-lurgical methodology - developed bySouth Africa's Council for Scientific & Industrial Research (CSIR) - to convertvarious by-products back into raw materials which can be sold orreused to reduce processing costs." The ultimate aim is to create a Zero Effluent Discharge plant and, todemonstrate the viability of the technologies available, WUC has built threepilot plants at one of the old mining shafts from which AMD is currently beingpumped. These are: • The SAVMIN Plant (operational since 5 April 2008) uses the SAVMIN methodology (patented by Mintek and operated by Atomaer RSA (Pty) Ltd) to treat 4 cubic metres of AMD per hour to "industrial" quality standards • The Gypslim Plant (operational since 5 March 2008) which uses the Gypslim process (patented, designed and operated by the CSIR) to produce "Industrial " quality water at a processing rate of one cubic metre per hour • The By-Product Recovery Plant (operational since 10 March 2008 and designed, engineered and operated by the CSIR, Key Structure Holdings and Sulphidetech) which processes and isolates by-products produced by the SAVMIN and Gypslim water treatment processes. "Of course, development of the envisaged Water Treatment Plant will inevitablyhinge on the findings of an Environmental Impact Assessment," says Schoeman. "In advance of that, WUC has commissioned consultants Golder & Associates todetermine how the water, once treated, can be redistributed to industrial usersas far north as Rustenburg and as far south as Vanderbijlpark - as well asidentifying the optimum location for the eventual construction of the WaterTreatment Plant. However, the key to the success - and sustainability - of this solution rests onthe plant's ability to produce water of a suitable quality at a cost-effectiveprice for on-selling to high-volume industrial users (e.g. nearby Platinum mineswith major expansion strategies). Another sustainable benefit of using rehabilitated water to meet industrialdemand, is the positive impact it will have on availability of potable water forthe surrounding communities, as pressure on potable resources will besignificantly reduced. "This is a bold and creative response to a serious environmental challenge,"says Schoeman, "and we are confident that not only can WBEC/WUC provide asustainable solution to the issue of contaminated water in the Western Basin -but that the same solution can be rolled- out elsewhere, in South Africa and around the world, to effectively overcome thedamage inadvertently caused by mining activity." It is, in fact, already being considered as a viable option for water sources inthe Central and Eastern Basin - and possibly as far as the Far Western Basin -which will have the potential to provide closure strategies for a significantnumber of the mines across the Witwatersrand Basin region. ABOUT WESTERN UTILITIES CORPORATION (WUC) WUC is a wholly-owned subsidiary of Watermark Global plc, listed on the UnitedKingdom's Alternative Investment Market (AIM), and was formed to implement acommercially self-sustainable solution on behalf of WBEC. ABOUT WESTERN BASIN ENVIRONMENTAL CORPORATION (WBEC) WBEC is a Section 21 Company, formed by Randfontein Estates Gold Mines Limited(owned by Harmony Gold Mining Company Ltd), West Wits Gold Mines (owned byDRDGold) and Mogale Gold Mines Limited (owned by Mintails RSA (Pty) Ltd). Itsfunction is to govern the process of environmental water rehabilitationassociated with AMD in the Western Basin. BACKGROUND From the time South Africa's rich ore deposits were first discovered by GeorgeHarrison in 1886, mining exploration in Johannesburg burgeoned. The seam alongthe North-West of Johannesburg proved particularly lucrative and was minedunrestrainedly until the early 1990's. By the time environmental regulations were introduced (National Water Act, 1956and Fanie Botha Accord, 1970), the negative impacts were already being felt.This has become increasingly evident in the last decade as underground voidscreated by mining of the Witwatersrand orebody (specifically the Western BasinVoid) have filled with water and begun to discharge into the surrounding watercourses at an annualised average rate of 15 Megalitres per day. Many of the mining houses active in the West Rand over the last 100 years haveceased operations - or no longer exist - thus the onus for finding an effectiveand sustainable solution to this significant environmental challenge now restswith the few players who continue to have active interests in the area. These include MinTails (through its operating subsidiary, Mogale Gold Mine);Harmony Gold Mining Company Ltd (through its operating subsidiary, RandfonteinEstates Ltd; and Durban Roodepoort Deep (DRD), whose operations are dormant,though technically active, at West Wits Gold Mine. Aside from the moral imperative to address the seepage problem, the threeremaining players are required to do so by South Africa's National Water Actwhich stipulates that "the polluter pays". In terms of this, the Department of Water Affairs & Forestry (DWAF) has issued adirective that no mining house will be permitted to close any further operationsin the area until the affected water has been satisfactorily rehabilitated. This information is provided by RNS The company news service from the London Stock Exchange