Highlights |
 |
Development and roll-out of group-level environmental strategy |
 |
ISO 14001 certification received at two operations |
 |
Cyanide code implemented at all metallurgical plants except Kalgold and Joel |
 |
Success of PNG programme for community access to clean water |
|
Material issues |
 |
Water management |
 |
Land-use: concurrent rehabilitation and financial provision |
 |
Legal compliance |
 |
Carbon legislation and footprint |
 |
Radiation |
|
The section on Harmony’s approach to sustainability details how we identified our material issues. (see here)
Management approach
Harmony recognises the impact of its business on surrounding communities and natural environments. We also understand that these impacts may affect the long-term sustainability of our business.
Following a review of the group environmental strategy in the prior year, key environmental risks were identified and management systems determined to control and reduce these risks. Environmental objectives and targets were formulated to track implementation of these management methods and risk-reduction performance. These targets were based on environmental assessments at our various operations.
Our revised strategy is closely aligned with the principles of our environmental policy and legislation in the countries in which we operate. Refer to www.harmony.co.za for the Environmental Policy. The strategy aims to ensure compliance, continually improve the effectiveness of our environmental management systems (EMSs), prevent pollution and maintain awareness of our environmental responsibilities among employees, contractors and suppliers.
Specifically, we aim to achieve optimum environmental performance by:
- Managing the environment as an integral part of our business
- Focusing on the effectiveness of risk controls
- Reducing our environmental liability
- Creating a sharing, learning, challenging and innovative environmental culture in Harmony. Environmental compliance is monitored through internal and external audits, and technical audits.
Ultimate oversight for environmental strategy and performance in Harmony rests with the social and ethics committee of the board. In addition to an executive environmental manager, an environmental leadership committee drives environmental improvement strategically at group level, which cascades down to the various operations. At each operation, general managers are accountable for environmental management, and each operation develops annual environmental management plans to identify opportunities to increase compliance and minimise pollution.
*The process of developing group standards of reporting and auditing in FY11 has identified a few anomalies, which have been corrected. Historical data cannot be restated as the information is not available. We are, however, confident that accurate baselines have now been set to provide meaningful comparison in future. |
South Africa
Environmental management and auditing
In line with Harmony’s strategy of ensuring legislative compliance, we are implementing appropriate environmental management systems at all operations. These will also ensure that environmental management is addressed through a formal, systematic approach. To date, these systems are being implemented at all our North operations with Doornkop plant, Doornkop shaft and Kusasalethu already certified. In the South region, systems are being developed and implemented. Self-assessments will begin in the next financial year.
As required by the MPRDA, environmental management programmes (EMPs) have been drawn up for each operation, submitted and approved by the DMR. These plans are amended when necessary and resubmitted to the department.
Integrated water use licences were submitted for all operations as early as 2006. Evander has received its new-order water use licence. Doornkop has received a draft water use licence, with the final licence being imminent. After initially submitting an application in 2006, Kalgold will resubmit its water use licence application to ensure it complies with current legislation.
Other key legislation for the company includes compliance with the National Environmental Management Act (NEMA), National Water Act and the National Nuclear Regulator (NNR) Act. Harmony has received an exemption from the nuclear regulator’s certificate of registration process as radiation levels are quite low for Kalgold.
Harmony received no environmental fines or sanctions in FY11. Four directives were received during the period:
- Kalgold’s EMPR was approved in 2009 for the D-zone pit. The approval letter accompanying the signed-off EMPR stipulates a number of conditions that Kalgold must comply with. One of these conditions is a requirement to backfill D-zone pit which is in conflict with Kalgold’s rehabilitation commitment of converting the pit into a strategic water resource for the water-scarce Mareetsane region. Scientific studies further support that backfilling the pit will have a negative impact on the environment, especially the surface and groundwater regimes. Supported by DWA, Kalgold is working with the DMR to revoke the approval letter and endorse the conversion of the pit into a strategic water resource.
- Steyn 9 slimes dam: (DMR) airborne dust – being addressed by implementing a very comprehensive dust mitigating plan, which includes water and chemical suppressants creating dust barriers.
- Doornkop shaft: (Department of Water Affairs) release of underground water – mine has proved discharge does not impact on river water quality
- Kusasalethu: The DMR requested Kusasalethu to increase access control of communities to the return water dam for safety reasons. In addition to physical barriers, Kusasalethu has also started a risk awareness and education campaign in the community.
ISO 14001 implementation
In FY10, Harmony reviewed its strategy on ISO 14001, deciding that all operations would comply with these standards while all new and long-life assets would be ISO-certified within three years.
This decision was aligned to our business strategy for scaling down certain operations while developing others. Given that a few of our assets are reaching the end of their lives, implementing a certification system would add only short-term value. At these operations (Deelkraal and Winkelhaak), the emphasis is on designing and implementing closure plans in line with ISO principles.
Long-life assets that will benefit from continuous improvement were therefore prioritised for certification. These long-life assets are: Doornkop, Evander 8, Kusasalethu, Kalgold, Bambanani, Unisel, Masimong, Phakisa, Tshepong, Saaiplaas, Target 1 and 3, Joel and all new projects.
During the year, Doornkop plant and Kusasalethu were certified to ISO 14001 standards, while Kalgold and Evander were recommended for certification. Implementation at other operations is ongoing, and action plans to address all high-risk impacts are under way. For stakeholder engagement refer to here.
Responsible use of resources
In line with our strategy of managing available resources effectively and responsibly, group aggregate targets have been set for energy, fresh water use, waste management and recycling:
- Each operation exceeding 100 000t CO2e emissions must develop and maintain energy conservation plans by 2012
- Group energy consumption target – 10% less per tonne milled per annum (from 2005 base year)
- Reduce fresh water consumption by 2% by 2013 (baseline FY08)
- Improve use of affected water by 5% by 2013 (baseline FY08)
- Water recycling target – 5% by 2013 (baseline FY08)
- Waste management target – reduce waste by 5% by 2013 (baseline FY08).
Water
Harmony’s operations use significant amounts of water, and access to this resource is vital for the growth of our assets. Although we have an adequate supply at present, water is fast becoming a competitive resource.
Accordingly, a group-wide campaign is under way to reuse processed water and optimise water retreatment. This has produced excellent results to date.
| Operation |
Action |
% water reused |
| FY11 |
FY10 |
| Kalgold |
All affected water recycled for internal plant use |
34 |
32 |
| Doornkop |
Affected water stored for reuse in plant |
35 |
21 |
| Evander |
Affected water reused in plant and excess sent to Leeupan for evaporation |
33 |
38 |
South
operations |
Shaft and plant process water routed to water dams and then recycled for use in operations |
13 |
68 |
Our South African operations do not draw water directly from surface sources, except for Kalgold which draws water from the aquifer. Water is sourced from:
- Bulk water service providers and municipalities
- Surface water run-off
- Water that ingresses into deep-level mining operations and is then pumped to surface
- Recycled water
- Boreholes.
Total water used for primary activities in FY11 decreased by 18.6% to 36 074 000m³ from (FY10: 44 338 781m³), primarily due to greater awareness of recycling. Of the total volume of water used during the year, around 20% was recycled, while potable water use declined by 2% (FY10: 31% and 11% respectively).
The continued reduction in potable water from external sources is a positive trend. The decline in the volume of water recycled reflects the closure of a number of Harmony shafts in recent years.
The Far Western Region Dolomitic Water Association is dealing with a number of water-related issues in the area, including an exercise to remediate the impact of radiation in the Wonderfonteinspruit catchment. While Harmony is a member of the committee working to reduce the impact on this area, it has no operational involvement in the upper region of this catchment, highlighted as the first area requiring intervention. Only one site may be linked to our operations, but this was deemed of lower environmental risk by an intergovernmental team and not requiring any urgent intervention. Any exposure in this catchment is limited and manageable.
Acid mine drainage, while being very topical at present, is not an issue for Harmony. There is some potential for acid mine decanting but only at closure and Harmony is participating in regional closure forums to ensure this is appropriately managed. See here.
Our current focus is on improving our understanding of the groundwater and surface water regimes. In the last year, geo-hydrological assessments were undertaken in the Free State region, at Evander, Kalgold and Doornkop. In terms of acid mine drainage, the studies confirm there is no risk of decant from the Free State operations, Evander or Kalgold. From the perspective of surface water pollution, rehabilitation is being prioritised at the joint metallurgical scheme site and the acid plant site in the Free State, as well as at decommissioned shafts in the Free State, Winkelhaak and Deelkraal plants.
Water is being discharged from our Doornkop operation and this is being licensed. Based on the draft licence received, Doornkop complies with its licensing conditions. An intensive water-monitoring programme is in place and reporting to the regulator takes place routinely.


During the year, we recorded a few instances of discharge into a riverine environment (see here).
These were immediately addressed, and steps taken to monitor and manage any impact.
Our energy consumption is largely in the form of electricity drawn from South Africa’s power utility, Eskom, which in turn is primarily driven by coal-fired power stations.
Hoisting, cooling and ventilation systems all need electrical power, making Harmony a major user of electricity. Energy is therefore a significant and growing portion of our operating costs, given rising electricity tariffs.
After the electricity supply crisis in 2008/2009, domestic tariffs have increased steadily and are scheduled to rise further in the year ahead. After a 27% hike in FY10, tariffs rose by a further 25% in the review period, and are expected to increase 27% in FY12. These cumulative increases have catapulted energy efficiency from an environmental consideration to a business imperative.
South Africa: Water used and recycled
| (000m3) |
FY11 |
FY10 |
FY09 |
FY08 |
| Water used for primary
activities |
36 074 |
44 339 |
32 971 |
104 763 |
| Potable water from
external sources |
14 489 |
14 840 |
16 721 |
21 323 |
| Non-potable water from
external sources |
22 163 |
10 570 |
16 249 |
83 429 |
| Surface water used |
67 |
1 135 |
111 |
55 088 |
| Groundwater used |
22 096 |
23 790 |
15 742 |
28 352 |
| Water recycled in
process |
7 321 |
23 232 |
10 491 |
34 521 |

Energy improvement initiatives in FY11
The energy efficiency and climate change policy
and strategy (www.harmony.co.za) was finalised
and approved June 2010. The policy articulates
Harmony’s commitment to energy efficiency and
provides a clear directive to all employees to commit
to energy efficiency improvement.

As result of spiralling electricity costs, South
Africa’s electricity supply constraint and Harmony’s
commitment as a responsible corporate citizen,
the focus to improve energy efficiency and mitigate
climate change impacts has intensified in the past
year.
Two energy efficiency projects – Kusasalethu
water turbines and Evander 8 shaft solar water heating – were successfully implemented, resulting in a load
reduction of 1.84MW and energy savings of 1 323MWh per month. Kusasalethu is also commissioning two
more water turbines that will contribute 3MW load reduction and 31 536MWh energy savings per annum.
In addition, three water and air optimisation projects were approved by Eskom for partial DSM (demand-side
management) funding with an expected load reduction of 5.08MW and 31 460MWh energy savings per
annum and a completion date of June 2011. Harmony contributed R20.1 million to the project funding. A
further seven projects with a targeted load reduction of 18.07MW and energy savings of 110 903MWh pa are
being submitted to Eskom for DSM funding while an additional seven energy efficiency projects are in the final
stages of investigation. Estimated capital expenditure to implement these projects is R191.4 million.
Additionally, Harmony is developing 61 energy efficiency, load clipping and renewable energy projects,
(all at different stages of development) which together are estimated to save around 600GWh/yr. The total
capital requirement to implement the engineering energy efficiency interventions under investigation will be
R560 million.
In FY11, Harmony reduced its electricity consumption by 48.5GWh, decreasing emissions by 48 500t CO2e.
Projects still being implemented in calendar 2011 include:
- Harmony hostel hot water system: this project plans to optimise energy use for water heating in our
South African hostels by using solar water heaters and waste heat from compressors, saving 55GWn/yr.
Implementation will be in FY12.
- Kusasalethu cooling auxiliaries project will reduce the amount of electricity used for refrigeration and
production to save around 9.5GWh/yr at the operations. This project will be implemented in FY12.
- Optimising compressed air at Masimong, Phakisa, Nyala and Tshepong – these are planned energy efficiency
projects on compressed air production. This project will reduce electricity use by some 19GWh/yr.
All six projects will reduce electricity use and therefore decrease Harmony’s scope 2 emissions by some
83 500t CO2e. |
In FY11, total electrical energy use dropped 6% to 3 429 000MWh (FY10: 3 659 000MWh) for our South African operations.
South Africa’s 2005 energy efficiency strategy set a national improvement target of 12% by 2015. As industrial and mining companies are the largest users of energy in South Africa, these sectors have been set a final energy demand reduction target of 15% by 2015. While this target is currently voluntary, it is effectively mandatory given the 10% demand reduction imposed by Eskom after the electricity crisis.
The National Energy Regulator of South Africa (Nersa) approved the renewable energy feed-in tariff (REFIT) guidelines in April 2009. While there is still debate on certain issues in these guidelines, this is expected to stimulate the development of renewable energy in the country once it becomes more financially feasible to invest in alternative energy options.
Harmony is committed to reducing its energy consumption and has worked closely with Eskom to manage its electricity use and peak demand both before and after the energy crisis. The company has a number of efficiency projects under way. Refer to www.harmony.co.za for the energy efficiency and environmental policies.
Harmony has also actively engaged with Eskom in demand-side management (DSM) strategies to reduce electricity consumption during peak periods such as early morning and late afternoon. This involves measures such as timing pumping to coincide with cheaper off-peak periods, making more efficient use of Eskom tariffs that reward load-shifting, and improving the efficiency of pumping operations.
We installed sophisticated equipment and variable-speed motors that reduce the surge in power consumption when a pump is started. While the software supporting these systems has been complex and costly to develop and implement, significant savings are reflected in lower electrical energy consumed despite the 7% increase in rock mined.
Three water and air-optimisation projects with an expected load reduction of 5.08MW and 31 460MWh energy savings per annum were approved by Eskom for partial DSM funding in the prior year. These were completed by June 2011, with Harmony’s contribution totalling R20.1 million.
Another seven projects with a targeted load reduction of 18.07MW and energy savings of 110 904MWh per annum were submitted to Eskom for DSM funding, and an additional seven energy efficiency projects are in the final stages of investigation. The projected capital expenditure to implement these projects amounts to R191.4 million.
Given our five growth projects to increase production, resource use – water, energy, timber, cyanide and other chemicals – is likely to increase in the next few years. Our focus is therefore on improving the efficiency with which we use resources for a positive impact on both the environment and cost of production.
Other power-saving initiatives are set out below:
 |
 |
 |
| Operation |
Initiative |
FY11 |
| Kusasalethu |
Refrigeration plant optimisation |
56 365MWh |
Kusasalethu
Evander 8 |
Water turbines Solar water heating |
5 287MWh |
| Evander 8 |
Compressor upgrade |
20 939MWh |
Harmony load
management |
Pump and compressor load management, peak load shifting and clipping |
18.47MW average
141 086MWh
R60 162 845 |
Materials used
The primary materials used are rock and ore, liquefied petroleum gas (LPG), grease, cyanide, fuels, and lubricating and hydraulic oils.
| South Africa: Materials used by operations |
 |
 |
 |
 |
 |
| (000t) |
FY11 |
FY10 |
FY09 |
FY08 |
| Rock mined (ore and waste) |
11 878 |
14 297 |
11 291 |
13 389 |
| Ore mined |
8 706 |
9 696 |
6 137 |
10 315 |
| Waste rock recycled |
3 200 |
1 763 |
5 855 |
2 739 |
| Slimes recycled |
5 235 |
7 306 |
13 868 |
7 533 |
| LPG |
0.62 |
0.60 |
0.22 |
0 |
| Grease |
22* |
181.75 |
0.41 |
0.41 |
| Cyanide |
8.33 |
7.88 |
6.30 |
8.98 |
| Fuels – petrol and diesel |
13 552# |
8 899 |
6 554 |
12 833 |
| Lubricating and hydraulic oil |
2 206 |
3 986 |
3 357 |
2 188 |
* Decrease reflects the switch to a more efficient type of grease and enhanced data integrity for Kusasalethu operation.
# Increase reflects enhanced data integrity from operations, especially Evander. |
Risk mitigation
Appropriate risk management practices and mitigation measures are in place to prevent or minimise Harmony’s impact on the environment. Specific concerns include managing cyanide use, discharge of water to the environment, addressing acid mine drainage, and understanding and developing plans to deal with climate change.
Product responsibility
Unusually among the precious metals, gold is both a commodity and monetary asset. Theoretically, almost all gold ever mined is available for use or recycling. Given its precious and enduring qualities gold is rarely wasted, with around 15% of the metal consumed each year recycled.
Annual demand for gold comes from:
- the jewellery market
- industrial sector (electronics, dentistry and other industrial and decorative applications)
- investment.
Harmony’s gold is marketed and sold by Rand Refinery to customers around the world, mainly in India, China, the Middle East and the USA.
Harmony is not directly involved with product labelling, providing service information or dealing directly with customers, and therefore undertakes no customer satisfaction surveys. No incidents of non-compliance with regulations, voluntary codes or related to health and safety impacts concerning the provision and use of gold were identified at Harmony in FY11.
Gold is a benign product with no significant health or safety impacts. Mining activities, however, can affect the health and safety of employees, communities and the environment. Harmony is involved in various initiatives to ensure the health, safety and livelihoods of its employees and communities, and safeguard the environment in which it operates.
Case study – Evander certified under international cyanide code
In March 2011, the Evander gold plant was certified fully compliant with the international cyanide
management code by the International Cyanide Management Institute (ICMI).
This followed a finding of substantially compliant in October 2010, and conditional certification. Once
developed, Evander’s corrective action plan was posted on the ICMI website, as required.
During the review period, ICMI accepted a report from an independent professional third-party auditor
verifying that the corrective action plan had been implemented and that Evander was now fully compliant with
the code. The auditor’s report is available on the ICMI website. Evander will be audited every three years to
evaluate its continuing compliance with the code.
The code is a voluntary industry programme for
companies involved in producing gold using cyanide,
as well as companies producing and transporting this
cyanide. It was developed under the auspices of the
United Nations Environment Programme by a multistakeholder
steering committee. The code is intended
to complement an operation’s existing obligation
to comply with the applicable laws of the political
jurisdictions in which it is located.
The ICMI has been established to administer
the code, promote its adoption, evaluate its
implementation and manage the certification
process.

|
As Harmony does not directly market its product, marketing communications, customer privacy and compliance issues do not apply. Harmony’s investor relation activities include marketing the company to current and potential investors, in line with relevant legislation and the listing requirements of the stock exchanges on which the company’s shares are quoted. No complaints were received in this regard in FY11.
Significant environmental incidents
Incidents with an impact outside Harmony’s boundaries that may cause irreparable harm, and may require considerable expenditure to remedy, are classified as significant. Significant environmental incidents reported in FY11 included:
- Doornkop – underground water discharge
- Pres Steyn – non-compliance to water licence discharge conditions
- Water discharge from Nyala wash bay to environment
- Doornkop return water dam overflow
- Kusasalethu return water dam overflow
- Evander return water dam overflow
- Nyala shaft water discharge overflowed into receiving environment
- Steyn 9 discharge overflowed into receiving environment
- Treated sewage water discharge from Kusasalethu
- Dust pollution from Steyn 9 slimes dam – received directive from DMR
All these issues are being addressed through our environmental management plans.
Cyanide
Harmony has been a signatory of the International Cyanide Management Code for the manufacture, transport and use of cyanide in the production of gold (the cyanide code) since June 2007. Developed by the United Nations’ Environment Programme and International Council on Mining and Metals (ICMM), this is a voluntary industry programme for companies involved in producing gold using cyanide.
Harmony has committed to comply with the code at all its major gold operations. To date, all metallurgical plants, except Joel and Kalgold, have been certified as compliant. Kalgold is currently refurbishing its carbon-in-leach tanks at the plant. Once this is complete, it will reapply. Joel plant was initially meant to be decommissioned and thus started the certification process late.
Harmony used 8 332 tonnes of cyanide during the year (FY10: 7 884 tonnes).
Acid mine drainage
Case study – adding value through
effective rehabilitation
Mining rehabilitation and the legal obligations of
owners have become major issues in recent years,
particularly in areas like Gauteng with its imminent
threat of acid mine drainage. What makes acid mine
drainage so contentious is the fact that the impact is
occurring years – decades – after the mining activity
that caused it and, in many cases, mine owners are
no longer in business.

Harmony’s approach to rehabilitation is both prudent
and responsible. We aim to restore mining land to as
close to its original condition as possible, and we aim
to do so as soon as feasible. Harmony is one of the few mining companies with a fully funded rehabilitation
fund. At year end we had funding available for over 99% of our liability.
We are also proactive about rehabilitation – breaking down and removing obsolete structures to enable our
skilled teams to clean up the environment. This approach applies to mines in closure as well.
With the decommissioning of the Virginia shaft area, the Free State operations are actively rehabilitating this
area. Particularly at Virginia 2 shaft, there has been significant surface infrastructure demolition and surface
clean-up and restoration. The total area cleared at this shaft at end June 2011 was around 10 000m2 at an
initial cost of R1 200 000.
In the main, the rehabilitation initiatives are intended to be cost neutral, with the reclamation initiative funding
demolition activities. We are also breaking down the remaining structures at St Helena 4 shaft. Our priority for
next year will be the complete rehabilitation of St Helena 4 and 2 as well as Brand 2 and 3 and Virginia 2.
St Helena 4 shaft has been completely demolished, and rehabilitation will begin shortly. At St Helena 2 shaft,
demolition is about halfway complete. Brand 2 and 3 shafts will follow. |
Acid mine drainage, also known as acid rock drainage, refers to the outflow of acidic water from usually abandoned or operational metal or coal mines. However, other areas where the earth has been disturbed by mining activities may also contribute acidic water to the environment.
There were again no specific risks to Harmony from acidic water in FY11. All operations manage their fissure water and there is minimal risk of acidic water reaching the environment. For closed operations, the risk has been assessed and no threat established. Where there is a risk of rising water levels and potential impact to the ore reserves of other operations or to the environment, water is pumped to the surface.
The company is, however, working closely with regional partners to identify the longer-term risks of acid mine drainage and establish sustainable solutions.
Climate change and greenhouse gas emissions
Harmony remains focused on reducing the use of fossil fuels and developing initiatives to mitigate and absorb greenhouse gases (GHGs) to reduce its carbon footprint. During the year, we recorded a very solid performance in reducing carbon emissions to meet our internal targets of (15%) by 2013, with an actual reduction of 18%.
In FY11, Harmony submitted its fourth response to the Carbon Disclosure Project (CDP). The year-on-year progress is most encouraging: in FY10, we scored 74% to rank 17th among 71 companies. Our submission is available at www.cdproject.net and at www.harmony.co.za/sd/cdp-response.asp.
The countries in which Harmony operates – South Africa and PNG – are non-Annex I countries and therefore do not have emission-reduction targets under the Kyoto Protocol in the first commitment period, ending 2012. Harmony’s exposure to Australian legislation is limited as the operations we owned there have been sold or are under care and maintenance.
After the climate summit in Copenhagen in December 2009, South Africa committed to 30% clean energy by 2025 with the vision that the country’s GHG emissions should peak by 2020 to 2025 at the latest, plateau for a decade and then decline by 40% by 2050. South Africa is also developing a national climate change response policy which is expected to be completed by 2012. This policy will be translated into a legislative, regulatory and fiscal package from now until 2012.
The largest portion of our GHG emissions relates to electricity, which accounts for around 10% of operational costs in South Africa. While cost management is clearly a strategic issue for Harmony, it is even more important that the energy supply is constant and reliable, given the impact of any loss of energy on both production and health and safety. GHG emissions regulation that would increase the price of energy, within reason, will not affect Harmony as significantly as regulation that stipulates emission thresholds, or sets technology standards that may threaten the security of energy supply.
As our current mines have a life expectancy of up to 25 years, capital projects are under way to sustain and increase production at the Phakisa, Doornkop, Kusasalethu, Tshepong and Hidden Valley operations. Our aim is to raise production to 1.8–2Moz by 2015. These expansions would extend our mining operations by 11 years or more, by which time GHG regulations are expected to be a permanent feature of the global economy. Future climate change regulation will therefore need to be considered for all Harmony’s extensions and acquisitions. As company policy, all greenfield and brownfield projects are required to consider the impact of climate change in their design and planning.
Harmony is also likely to be exposed to GHG emission regulation thresholds, specifically any leakage from using refrigerant gas. We will therefore be required to manage CFC-free refrigerant gas, and will consider using absorption chillers.
Harmony’s total scope 1 and 2 emissions in FY11 in South Africa were 3 570 469 tonnes CO2e (FY10: 4 402 675 tonnes CO2e), a significant decrease of 19% with a 6% improvement attributed to energy efficiency initiatives and scaling down and the remainder from unit error on scope 1. These emissions are mostly indirect and stem from electricity used and purchased from Eskom.


Radiation
Radiation is a potential risk at any gold mining company. Uranium and gold are both heavy metals and there is a high uranium content associated with the gold, creating a radiation exposure for workers and the environment from surface sources.
While radiation is well controlled at Harmony sites through systematic, systemic and operational controls and barriers, there are opportunities to reduce surface radiation exposures by removing defunct infrastructure.
Accordingly, we are focusing on cleaning up acid plants in the Free State and the joint metallurgical services site. In addition, regional public health assessments have been completed at Evander and Doornkop, which will help to prioritise remedial initiatives.
Closure and rehabilitation
Rehabilitation and closure is planned from concept stage for new operations/greenfield projects and during the life-of-mine for existing operations. Ensuring that appropriate closure plans and funding mechanisms are in place is a priority for Harmony.
As a responsible mining company, we are committed to enhancing rehabilitation at our operations and continuously identify land for rehabilitation to a sustainable alternative use. Where operations have been decommissioned, Harmony develops comprehensive closure plans which are submitted to the regulators for consideration and approval.
| South Africa: Rehabilitation |
| |
|
Total land disturbed
and not yet
rehabilitated |
| (ha) |
Total land
managed |
Opening
balance |
Closing
balance |
| Tshepong and Matjhabeng |
3 187 |
1 491 |
1 442 |
| Virginia, Merriespruit, Masimong, Saaiplaas, Brand, Unisel |
7 985 |
4 599 |
4 599 |
| Evander |
7 883 |
2 229 |
2 229 |
| Kusasalethu and Deelkraal |
5 113 |
895 |
895 |
| Bambanani |
2 752 |
750 |
839 |
| St Helena |
2 882 |
396 |
506 |
| Target |
423 |
251 |
251 |
| Kalgold |
3 991 |
932 |
805 |
| Joel |
2 162 |
135 |
150 |
| Doornkop |
913 |
509 |
509 |
| ARM |
1 683 |
421 |
384 |
| Pamodzi N & S |
2 188 |
729 |
537 |
| |
|
|
|
Harmony has around 38 139 hectares of land under management within mining rights (including 3 820 hectares of land pending transfer to Rand Uranium) and disturbed areas under rehabilitation. None of Harmony’s producing operations are located in areas of high biodiversity value, either inside or outside protected areas; and none of our operations affect IUCN Red List species. The total rehabilitation liability was determined at R2.23 billion in June 2011 while funding (including bank guarantees) is R2.21 billion. Harmony is one of few mining companies where rehabilitation liabilities are almost fully funded in advance.
During the year, the closure plan for Deelkraal was approved. Concurrent rehabilitation is under way at this operation as well as Evander Winkelhaak plant and slimes dams, Virginia 2, St Helena 1 and 4 shafts, and the Kalgold waste rock dumps. A rehabilitation plan and strategy has been developed for decommissioned operations in the Free State. This will be implemented in FY12. To date, over 35 000m2 has been rehabilitated on site. In addition, significant work has been done on breaking down structures such as shafts and buildings. While this work has no impact on land area, it reduces Harmony’s rehabilitation liability.
PNG
Environmental management and auditing
MMJV is developing an integrated sustainable business management system (SBMS). When fully implemented, this will meet the requirements of ISO 14001 and other relevant international safety and community standards. During the review period, the environmental section of this system was implemented at Hidden Valley, and will be rolled out across MMJV operations in FY12.
Environmental training and awareness in PNG includes a specific environmental presentation to new employees at induction and a monthly environment topic for the entire workforce. In addition, the front-line leadership training course includes an environment component.
The PNG Department of Environment and Conservation (DEC) commissioned a third-party compliance audit of the Hidden Valley mine in 2010 following stakeholder concerns about sedimentation impacts on the Watut River.
This led to the development of a DEC-approved environmental improvement plan to address compliance concerns and the appointment of an external stakeholder advisory panel. The Hidden Valley joint-venture partners are systematically implementing the environmental improvement plan to the satisfaction of the DEC and local landowners. The project's relationship with key stakeholders remains good and the joint-venture partners continue to be guided by advice from the stakeholder panel and the technical advisory committee.
Responsible use of resources and integrated risk management
Water use
Hidden Valley mine receives an average of 2.8m of rain each year, coupled with annual evaporation of about 1m. The excess rainfall, combined with steep unstable topography, creates significant water management challenges for the project. Rainfall run-off must be controlled to prevent erosion and sediment run-off to the river system. Site-water use must also be conserved to limit volumes of contaminated waste water discharged into the river system. These waste-water streams include sewage effluent and discharge water from the TSF.
Conserving process water is particularly important because TSF discharge water must be treated through a Caro’s acid cyanide destruct plant, followed by filtration through activated carbon to remove contaminants prior to discharge. It is necessary to discharge this water to maintain a small ponded area on the TSF which, in turn, is necessary for adequate consolidation of tailings and protecting the integrity of the TSF. The minimum volumes of raw water are therefore drawn from the river system for key processes requiring raw water such as the elution and gravity circuits. This draw, however, in combination with high rainfall and low evaporation creates a high positive water balance, necessitating a high rate of discharge from the TSF and limiting the opportunity for process water recycling. Minimising raw-water use is also important in protecting the project against occasional El Nino droughts when volumes of available river water are greatly reduced. As a result of the strong focus on limiting raw-water use, the process plant raw-water draw at Hidden Valley mine decreased from 1 843 000m3 in 2010 to 1 533 000m3 in 2011.
| PNG: Water used and recycled |
| (000m3) |
FY11 |
FY10 |
| Water used for primary activities |
1 553 |
1 843 |
| Potable water from external sources |
19.964 |
– |
| Non-potable water from external sources |
1 534 |
– |
| Surface water used |
– |
1 843 |
| Groundwater used |
– |
1 875 |
| Water recycled in process |
945 |
762 |
Watut River water quality
Construction of the Hidden Valley mine has contributed to sedimentation in the Watut River system. This is causing concern among downstream communities living on the river banks.
In the prior year, the joint venture partners commissioned a series of studies to assess current and future impacts on this river system. These sediment, biology and acid mine drainage (AMD) characterisation studies confirmed the impact on the Watut River, partly from activities at Hidden Valley and from other sources along the river.
A team of experienced personnel, supported by an independent advisory committee, is managing a range of remedial actions that includes ongoing assessments of the river, riverine biology and aquatic life.
A highlight of the year was the launch of the community clean water programme. Working with a faith-based organisation, we have constructed wells in nearby villages which will be a reliable source of clean water for these communities. See case study here.
Since 2010, we have made significant progress in reducing mine-related sediment in the river including:
- Waste rock is classified appropriately, handled and stored.
- Cyanide destruction plant has been modified to improve treatment efficiency and ensure discharge water meets stringent internal water quality standards.
- Managing Watut River water quality via a combination of drainage control, chemistry modelling and a treatment system that balances runoff from overburden dumps.
- Engaging a contract engineer to assist in water management and erosion control. This work identified a significant improvement in suspended sediment in creeks and rivers during the past year.
- Monitoring stations measure river flows and sediment migration rates on the Watut River. Increased site and downstream compliance monitoring shows an improving trend in turbidity measured at the compliance point.
- Ongoing and extensive environmental awareness campaigns for employees and affected downstream communities.
Energy management
Total electricity generated from diesel in FY11 at PNG was 105 015MWh. The decrease reflects Hidden Valley’s partial connection to the national power grid during the year.
In the third quarter of the review period, Hidden Valley was connected to the new hydropower transmission line, part of the PNG electricity grid. While Hidden Valley is currently only drawing 50% of its requirements from the national grid, this has already significantly reduced reliance on diesel-generated power on site and the amount of fuel to be trucked to this remote site.
Significant environmental incidents
A few localised environmental incidents were reported in PNG in FY11, but these were not considered significant as they had no effect on the ecosystem.
Cyanide management
Since both Harmony and Newcrest are signatories to the cyanide code, Hidden Valley mine is preparing for certification in due course.
Since commissioning the processing plant in FY10, measured cyanide concentrations have complied with environment permit limits at the Nauti Village compliance point.
Case study – developing water
programmes in PNG
With around 60% of PNG’s rural population
depending on natural sources of water for drinking,
water-borne diseases and ailments are cause for
concern. In the past, this has caused outbreaks of
cholera and dysentery. The most-recent outbreak
spread over six provinces and led to the government
declaring a state of emergency in 2009.

For many communities who faced a long daily
walk to access fresh water, we have spent almost
PNK2.1 million on providing clean, reliable village
water installations. The arrival of the water-supply
pipe and village tap has been accompanied by sessions on health and sanitation awareness.
This programme is well under way, with 20 installations completed and around 20 remaining (FY12). The
people of Golden Pine, Winima, Manki 1, Kwembu 1 and 2 in the upper Watut and 14 villages in the lower
Watut region are already enjoying the benefits of clean fresh water piped to their doorsteps. We are making
progress on awareness, feasibility, soliciting village commitment to ensure ownership, and the process of
ordering and delivering materials for remaining villages.
The programme will cover Kwembu 3, Nauti, Manki 2, Latep and Leklu for the upper regions, SambioSamsam,
Biamena, Gawapu, Dambi, KapinNayakes, and Piu in the middle Watut areas; while the lower Watut region of
Maralina, Wongkins, Kapungung, Chiatz, Goraris, Zifasing, Wampan, Bavaga, Kasek and Magaring are already
enjoying the benefits of clean water supplies. All these stakeholders living close to the mine and in the larger
Watut region have identified a priority need that is being delivered. |
| PNG: Materials used at operations |
| (000t) |
FY11 |
FY10 |
| Rock mined – ore and waste |
18 372 |
16 740 |
| Ore milled |
3 357 |
2 640 |
| Waste rock recycled |
– |
– |
| Slimes recycled |
– |
– |
| LPG (000ℓ) |
– |
– |
| Grease (000ℓ) |
344 |
– |
| Cyanide |
|
3 |
| Fuels (000ℓ) |
44 768 |
42 927 |
| Lubricating and hydraulic oil (000ℓ) |
630 |
489 |
| PNG: Waste management |
| (000t) |
FY11 |
FY10 |
| Accumulated tailings in tailings dams (active and dormant) |
6 039 |
4 635 |
| Accumulated in waste rock dumps |
82 751 |
4 635 |
| Non-mineral waste |
298 |
0.51 |
| Hazardous to landfill |
– |
– |
| Hazardous to incineration |
– |
– |
| Scrap steel |
8.973 |
0.12 |
| Scrap timber |
– |
Not
measured |
| Percentage of materials used that are recycled |
– |
Not
measured |
Climate change and greenhouse gas emissions
PNG’s national office of climate change and environmental sustainability is studying the potential for future economic growth to be driven by renewable energy. Along with other Pacific Island countries, PNG has adopted a framework for action on climate change 2006 to 2015 and a disaster risk reduction and disaster management framework for action. The implications of these structures on Harmony’s operations in PNG have not yet been established and studies are ongoing.
The introduction of an emissions trading system in Australia, known as the carbon pollution reduction scheme, has been delayed until 2013. This will enable the Australian government to assess the level of global action on climate change after the first phase of the Kyoto Protocol expires in 2012.
Although this change in policy direction in Australia reduces the impetus for carbon-emission reduction in the country in the short term, other non-regulatory risks, mostly substantial projected electricity price increases, remain significant drivers for achieving emission reductions in Australian operations.
Harmony is developing a framework for an internal GHG management strategy, including standardised emission measurements and estimation techniques at PNG. In the past, GHG emissions in PNG were only direct and treated as scope 1 emissions as they were all derived from diesel generators with no electricity purchased.
This changed in FY11 because Hidden Valley mine, previously under construction, is now fully operational, and was connected to the national grid in March 2011. Total scope 1 and 2 emissions for FY11 were 145 533 tonnes CO2e (FY10: scope 1 only 128 381 tonnes CO2e), an increase of 12% as the operation ramps up.
| PNG: Greenhouse gas emissions |
| Tonnes estimated CO2e |
FY11 |
FY10 |
| Emission source |
|
|
| Petrol |
14.1 |
8 |
| Diesel (transport) |
79 775 |
2 185 |
| Natural gas |
– |
– |
| Explosives (total) |
531 |
306 |
| Mine methane |
– |
– |
| Electricity generated on site |
43 132 |
125 873 |
| Total scope 1 |
123 452 |
128 371 |
Closure and rehabilitation
Land is a significant resource in PNG, given the mountainous terrain that characterises large areas of the country. Land clearing is managed through a permit process that requires approval from the environment and community affairs department before any clearing can take place. PNG’s focus for this financial year is to optimise and augment, where necessary, data monitoring and management as information integrity is key to managing our environmental/sustainable development exposures.
Harmony has strategies in place to manage impacts on biodiversity, including the implementation of an environmental management system aligned with ISO 14001, and ongoing rehabilitation activities that will restore the habitat for native species.
Hidden Valley uses a strategy of progressive rehabilitation, and restored 84 hectares of disturbed land in FY11. An on-site high-capacity nursery is hardening 21 000 seedlings for field planting after planting 30 000 in the first half of 2011.
A closure plan has been developed for Hidden Valley, with a provision for rehabilitation and closure liabilities of US$52.7 million.
| PNG: Land management |
| (ha) |
FY11 |
| Total land managed |
4 150 |
| Total land disturbed and not yet rehabilitated – opening balance |
75 |
| Estimated new disturbance |
30 |
| Rehabilitated |
84 |
| Total area of land disturbed and not yet rehabilitated – closing balance |
21 |
Hidden Valley mine is not in a biodiversity-protected area, but five 2011 IUCN red list species could potentially occur in the area. These include a vulnerable and decreasing species of tree kangaroo (Dendrolagus dorianus); an endangered and decreasing species of tree kangaroo (Dendrolagus goodfellowi); the vulnerable and decreasing nectar bat (Syconycteris hobbit); the vulnerable and decreasing harpy eagle (Harpyopsis novaeguineae) and the critically endangered and decreasing long-beaked echidna (Zaglossus bruijni). None of these species has, however, been confirmed from the area and there is no evidence that Hidden Valley mine has impacted critical habitat. |