GNR1147 Overview: Financial Provisioning Regulations, 2015

27th March 2023

GNR1147 Overview: Financial Provisioning Regulations, 2015

(Virtual Showroom): The Government Notice R1147 (GNR 1147) is a regulation with provides guidelines pertaining to the financial provisioning for prospecting, exploration, mining or production operations and are incorporated into the operations mine closure plans. The Department of Environment, Forestry and Fisheries (DFFE) is the legislative authority with regard to the legislation of the regulations whilst the Department of Mineral Resources and Energy (DMRE) is the competent authority to the implementation of the regulations.

Previously, financial provisioning and rehabilitation was governed under the Mineral and Petroleum Resources Development Act (Act No. 28 of 2002) (MPRDA) and the National Environment Management Act (NEMA, Act No. 107 of 1998). Changes to environmental legislation relating to mining resulted in the DFFE and DMRE making the subsequent changes to the requirements for making financial provisions for the management, rehabilitation and remediation of environmental impacts caused by the operation.

Mine closure plans and the incorporation of the GNR 1147 regulations are required to be included within the Environmental Impact Assessment (EIA) process in order to ensure that the potential environmental impacts of the activities of the operation are fully understood and considered before the activities initiate. This assists with effective and proactive mitigation strategies to be implemented during operation in order to reduce the costs required for rehabilitation after the operation closes.

Under the regulations (Regulation 11 (1)) of GNR 1147, three (3) plans are required (per mine/ permit/ prospecting right/permit) with financial provisioning for each. These include a rehabilitation plan; Final rehabilitation, Decommissioning and Mine Closure plan; and an Environmental Risk assessment report with the reports being required to be compiled, reviewed and assessed by independent third-party experts (Pr.Eng or Pr.Sci.Nat). An operations financial provision is required to be audited on an annual basis (per mining right/ prospecting right/ permit) by an independent auditor registered with the Independent Regulatory Board of Auditors (IRBA) with comprehensive reconciliation required year-on-year.

In general terms, a closure plan is a document that outlines the procedure and requirements for the closing of an operation which typically includes site preparations, site restoration, monitoring and financial provisioning. On the other hand, a Rehabilitation Strategy Implementation Plan (RSIP) is a document that outlines processes and measures which need to be taken for restoring the environment once the operation has been decommissioned. The RSIP, therefore, follows the mine closure guidelines and will be implemented to ensure that the site is restored to the pre-operation state or in acceptable condition as determined by the DMRE officials.