Process waste disposal: The waste material generated by the refinery classifies as H : H (according to
DWAF’s Minimum Requirements) indicating that the material should be disposed of at a properly
engineered hazardous disposal facility where seepage to groundwater is minimised as far as is
practicable. Currently the two disposal facilities (old decommissioned gold slimes dams 7L3 and 7L4 for
which Zincor are liable) do not meet the criteria for hazardous waste as no impermeable layers have been
constructed at the base of the facilities. The planned new facility, due for commissioning in 2007, will be
designed and constructed to comply with DWAF’s requirements. It is currently expected that the solid
component of 7L3 will be reprocessed (excluding the gold slimes) to extract residual zinc. While this could
potentially remove contaminants associated with refinery’s tails, the remaining gold tails may still release
contaminants to the environment. There are currently no plans to reprocess the material in 7L4.
To minimise ongoing contamination, it is expected that the two tailings facilities will require capping with an
impermeable layer at closure. It has been determined that uranium is present in the toe paddocks in
concentrations above DWAF’s guidelines, however, the radiation associated with the uranium is below the
NNR guideline. The radiation is not seen as a significant risk.
Water contamination: Contamination plumes have developed below the 7L3 and 7L4 tailings dams.
Cut-off trenches have been constructed around a portion of 7L3, however, no trenches are present around
7L4. A wet patch, indicative of seep, is evident at the base of 7L4, which is approximately 250m away from
the Blesbokspruit, indicating potential contamination of the spruit and which DWAF has stated is illegal.
Pollution control around 7L3 is inadequate, with the result that the Vlei Dam has become contaminated
with groundwater daylighting in the dam area, as well as solids washing from 7L3 and collecting behind
the dam retaining wall. There is a risk that groundwater remediation, at a high cost, may be required
by DWAF to ensure control of the pollution plumes.
Storm water management: Spills and storm water originating from the plant are initially collected in
a concrete lined channel that drains to a Plant Storm and Water Retention Dam from where it is pumped
back into the plant. It appears that the capacity of this dam is currently not sufficient to handle the water
from the plant and regularly overtops via an earthen channel to the Emergency Dam System. From here
the water is pumped to the Penstock Return Water Dam of the 7L3’s tailing dam. This increases the risk
of contaminated process water reaching the spruit. However, this will be addressed once the storm water
drains and bundling upgrade project are completed in 2006.
Soil contamination: Various sources of soil contamination are present. These include: seepage to
surface and sediment laden runoff from the tailings dams; pipe burst in tailings delivery line; overtopping
of the sumps collecting water from the cut-off trench around 7L3; ad hoc disposal of smelter waste around
the tailings dams; temporary storage of sediments removed from the silt trap (prior to disposal of the
sediments on the tailings dams); temporary storage of product (particularly the cadmium and cobalt oxides
stored outside of dedicated bunded areas); storage of raw materials; storage of intermediates during the
process; and spills from the process. Historical soil contamination could also have resulted from gold
mining activities. It is assumed that the areas of the soil currently requiring remediation will require
disposal at the hazardous waste landfill with the risk of high disposal costs. To quantify the potential liability
a soil contamination investigation will be needed at a cost of ZAR1m.
Sinkhole formation: The existence of dolomite within 20m of the surface could lead to the formation of
sinkholes on the property. To minimise sinkhole formation, the refinery attempts to prevent water ponding
on surface. None of the current operation is reportedly at risk from sinkhole formation, however it is
suspected that there is the potential that sinkholes could form in the vicinity of the new hazardous waste
dump. It is understood that cognisance of this will be taken during design and construction of the dam.
Air emissions: Arsine and sulphur dioxide are chemicals potentially emitted to the atmosphere.
Although the gaseous levels are generally within the registration certificate condition, there have been
periods when concentrations have exceeded the conditions. Exceedances normally occur at start-up after
planned shutdowns. Zincor has recently implemented control measures to minimise emissions. It is noted
that the radon is not generated directly from the refineries operations but is an artefact of the geology and
the presence of the gold slimes on surface.
Community relationships: A number of small scale improvements have been made in the local
community, including teaching the community to grow vegetables and regular rubbish removal and
disposal. Zincor also insists that all contractors source unskilled labour from the local community. Zincor is
currently in negotiations with local and international donors to establish a Base Metals Initiative, where
members of the local community are equipped with trade skills in the redundant buildings on the plant.
Zincor views this project as sustainable, as the business plan indicates that proceeds from the initiative will
be utilised to maintain infrastructure. The remainder of the proceeds will go to those involved in the trade
Closure planning and costing: No closure assessment has been undertaken for the refinery as there are
no legislative requirements to do so. Therefore, no provision has been made for closure. SRK estimate that
the likely closure costs would be in the region of ZAR75m to ZAR100m. This will need to be confirmed in
a detailed closure planning and costing exercise (at a cost of about ZAR0.5m). It must be noted that the
ZAR75 – 100m does not include the ZAR5 – 10m that is potentially required to upgrade water
management to minimise diffuse seep to the Blesbokspruit, as this capital needs to be spent before
closure to comply with DWAF’s instructions. Furthermore, the ZAR75 – 100m does not include the ZAR1m
required for the soil study, as this needs to be undertaken prior to closure so that a remediation strategy
can be developed. A rehabilitation provision liability of ZAR191m was raised in the Company’s financial
statements at 31 December 2005.