Harmony Gold, the world’s fifth-largest gold producer, is to appeal against a North Gauteng High Court ruling that it continue paying for pumping water from a West Rand mine it sold in 2008, CEO Graham Briggs told Business Day last Friday.

An appeal will either confirm or amend Judge Tati Makgoka’s precedent-setting ruling that liability for environmental degradation cannot be sold off if Harmony Gold’s request that it take the matter to the Supreme Court of Appeal is granted. The miner has asked, in the alternative, that its appeal be heard by a full bench of the high court.

“We think the judge incorrectly interpreted the law,” said Briggs. A date for a hearing on whether Harmony can appeal against the ruling has yet to be set.

Judge Makgoka ruled that where a directive from the Department of Water Affairs to take preventative steps against pollution was issued while one juristic person was in control, that juristic person’s unfulfilled obligations were not nullified once they ceased to be in control.

“If he severs ties with the land, fully knowing that his validly imposed obligations remained unfulfilled, he can hardly complain if it is insisted that he should comply with those before he is discharged from them,” the judge said. Harmony is appealing against the whole ruling and has listed more than 15 instances in which it alleged Judge Makgoka had erred in his finding, or legal interpretation.

Garyn Rapson, an associate in law firm Webber Wentzel, said an appeal would be beneficial to the law in SA. Webber Wentzel does not represent any of the parties involved in the dispute. Rapson said an appeal ruling would “clarify, for landowners (not only mining houses), the period for which they may be held responsible for directives issued to them despite a subsequent transfer of the land to which the directive relates; and to clarify the interpretation of the duty of care provisions in the National Water Act in terms of activities which result in pollution and/or degradation to the environment”.

According to the judgment, the directive placed on Harmony was linked to gold mining activities in Klerksdorp, Orkney, Stilfontein and Hartebeesfontein, where mining was a source of potential pollution to the area’s underground.

The judge ruled the directive should stand until Harmony and other mining houses reach an agreement on the long-term management of water arising from mining activities in the area. Harmony Gold bought African Rainbow Minerals Gold (Armgold) in 2003, but the land remained Armgold’s until it sold it to Pamodzi Gold in 2007. After that, Harmony no longer exercised any control over the land on which the mine was based because Pamodzi assumed all of Harmony ’s obligations.

Briggs said he did not want to prejudice Harmony Gold’s application by commenting in detail, but legal advice was that a directive was issued against a landowner, “and we no longer own the land”. Harmony Gold had no intention of “walking away” from its environmental obligations, he said.

Source: Business Day