SRK Consulting executive on cost-cutting under the new mining regulations

15 June 2018 3 min. read
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According to Senior Environmental Economist and Management Consultant at SRK Consulting Matthew Law, a risk-based approach to the disposal of mining waste is not only more environmentally sustainable, but could also save on capital costs for firms, in light of the tightened regulations since 2015.

Following a global dip in the prices of minerals and other precious materials in recent years, the last thing that South African mining companies needed was a shift in the sector’s regulatory framework that would increase operation costs. Nevertheless, the change in regulations in 2015 was a necessity to ensure that the sector reduced its exceptionally high environmental footprint.

In essence, the new regulations tightened the design restrictions on mining companies’ waste management systems, including residue stockpiles and deposits. In most cases, this required significant alterations to existing mines in terms of infrastructure, often with substantial financial ramifications.

The impact of mining on the levels and quality of groundwater, for instance, is one of the key challenges that the new policy sought to address. To reduce impact, mines would have to install liners within their tailings facilities, which is widely regarded as an expensive operation.

According to Matthew Law of SRK Consulting, however, there are possible measures to be taken to mitigate costs under the new framework. Operational since 1974 – when its first office was opened in Johannesburg – SRK Consulting is a team of experts in the engineering domain who are equipped to offer technical support for mining operations.Matthew Law - Management Consultant at SRK ConsultingSince its establishment, the firm has grown into an international operation, employing 425 professionals in offices across the world – nine of which are spread across South Africa. As the mining sector in South Africa navigates a period of transformation – attracting international consultancies to the market in the process – SRK Consulting has been ramping up its operations in the sector, particularly since the appointment of a new Chairman in February this year.

“For decades, SRK has used risk-based methods to guide its technical studies and professional recommendations to clients. There is no doubt that this approach can be applied to the design of the new facilities in ways that, firstly, will not result in unsustainable ecological impacts and, secondly, could reduce capital expenditure,” says Law on making the most of the new regulations.

As per Law, the new regulations – while stringent – also allow for exemptions to the costs, provided that the exact financial impact of altering designs can outweigh the environmental benefits. The cost-benefit analysis required to determine this comparative benefit falls well within the mandate of SRK Consulting’s operations, as the firm frequently conducts Environmental Impact Assessment (EIA) studies, wherein its hydrogeologists survey the groundwater conditions and potential design alterations, if required.

“The outcome of these studies allows the EIA consultant and client to evaluate the impacts and risks of alternatives, against their financial cost, and if appropriate, to successfully motivate through the EIA process for exemption from full compliance with stringent design regulations, as provided for in terms of the Waste Act and associated regulations.The EIA process also provides an excellent mechanism to consider and compare the potential socioeconomic and environmental impacts of the premature mine closure,” said Law.