Water, water, who's to drink: the Gamawela or Anglo American?

A small indigenous South African community is pitted against the world's biggest platinum miner, At stake is that most precious resource of all - water.

A water project in Mpumalanga is unlikely to please all users

STEPHAN HOFSTATTER

Business Day (South Afica)

18th October 2008

THE eastern limb of the Bushveld complex, a scenic mountainous region in Mpumalanga, contains some of the world's largest untapped platinum group metal reserves.

In the past five years the price of platinum, mostly used in vehicle manufacturing , shot through the roof as demand surged. The result was a platinum rush of epic proportions, turning mountain villages such as Lydenberg and Burgersfort into boomtowns, with property prices skyrocketing as mining investment flooded in.

Last year Mining Weekly magazine estimated that R15bn would be spent on new mining development in the region between 2003 and 2015.

Platinum prices have since dived sharply to less than $1000/oz after reaching a peak of $2290 in March, but analysts predict the metal's price will recover in the long term. Some projects could be delayed but none are expected to be abandoned.

The region is also one of SA's most water stressed. Huge water deficits have been expected for some time in view of projected population growth, increased mining activity, and implementation of the ecological reserve - the amount of water scientists calculate must stay in rivers to maintain the health of catchments.

To secure projected water needs the water affairs department and a forum representing about 10 mining companies launched the Olifants River water resource development project.

Its first endeavour was primarily aimed at the expansion of the mining sector , and was paid for by mining companies. It entailed raising the wall of the Flag Boshielo Dam by 5m at a cost of R200m, and building the Lebalelo water pipeline from the Olifants River to the Steelpoort area.

The second phase was building the De Hoop Dam on the Steelpoort River at a projected cost of R5bn , with another R3bn to be spent by provincial and municipal authorities to treat and distribute water to 1-million domestic users.

The dam is expected to start supplying water in early 2011.

At the project's launch last year, Water Affairs and Forestry Minister Lindiwe Hendricks stressed the dam's importance in unlocking the region's vast platinum wealth. This year 23 mining companies signed agreements with water affairs, under which they committed to pay for water allocations, irrespective of use.

The deal was hailed as a huge development catalyst . By some estimates it would enable mines and support industries to invest a further R40bn in the poor region.

But scientists warn that these plans may not be enough to meet projected water demands, especially if the effects of climate change and economic growth are taken into account.

They argue that consumption per household will grow three times faster than the population, because the wealthier people get, the more water they use.

An unpublished study by the Centre for Scientific and Industrial Research shows that even with De Hoop and other water transfer measures in place, water demand will be very close to supply by 2025, suggesting shortages can be expected soon after. The likely result is an increase in tensions between mining companies and other water users for a diminishing resource.

There is already a bitter water dispute between the world's largest platinum miner, Anglo Platinum, and a small indigenous clan, the Gamawela .

In 2004 Anglo Platinum began investigating building a dam on its farm Richmond to develop its 100%-owned Der Brochen project, comprising 25km of the platinum-rich Merensky reef. Anglo predicted that Der Brochen had a 60-year life span, with peak production of 1,4-million to 2,9-millions tons of platinum group metals a year.

These plans brought it in conflict with the Gamawela, who had just won a court battle to have their ancestral land, a farm next to Richmond, restored to them.

Most of the Gamawela live in abject poverty in a waterless reserve nearby, dependant on social grants and other handouts. Like most traditional communities in the region, few have the education levels required for employment on the mines .

The Gamawela intended using their well-watered mountain property to start a commercial irrigation farming venture to supply them with food and fund an education trust for future generations .

Anglo's proposed dam would make this impossible . It would flood almost all the arable land available in the narrow valley. Anglo would also use up the valley's water, thereby preventing the Gamawela from applying to increase their allocation, an essential step if they want to farm on a commercial scale.

The conflict has reached a stalemate. Approval for the dam now rests with environmental and water authorities, who are assessing Anglo's proposal and the Gamawela's objections submitted earlier this month.

It is not clear when the authorities are likely to rule.

Under new water laws, the government must take the proposed dam's effect on the Gamawela into account before approving it, and promote redress for past racial discrimination in water allocation. The Gamawela's objections could therefore scupper the dam and associated developments.

Both sides accuse each other of acting in bad faith. The Gamawela argue that Anglo was, at best, negligent and, at worst, devious in selling its neighbouring Booysendal project, along with its substantial water allocation, on the assumption that it would be able to make up its water deficit for Der Brochen by building Richmond Dam.

Anglo concedes selling Booysendal will force it to provide more water to the Der Brochen project area, either by building the Richmond Dam or requesting more water from the Olifants River resource development project.

But it insists this does not mean it is trying to force the government's hand in approving Richmond Dam.

"This reflects a lack of understanding of the national water strategy for this area," says Anglo spokesman Simon Tebele.

Tebele says the water resource project will come under increasing pressure as predicted demand is greater than anticipated supply. "This creates a risk for the mining industry and surrounding communities as a whole," he says.

" (The conflict) reflects lack of understanding of the national water strategy for this area and creates a risk for mining industry and surrounding communities as a whole"

Gamawela representative Tiny Mankge that says Anglo's offer of R2m is unsolicited, inappropriate and laughable.

"This land has incalculable cultural value and is the only productive asset we have," she says. "There is no way we will sell it."

For more information, contact:

Ms Tiny Mankge, Gamawela Communal Property Association, cel. 082-9417623, tinym@dbsa.org

Mr Mathibela Rosseau Mankge, Gamawela Communal Property Association, cel. 072-1864205, MRMankge@thedti.gov.za