Water war looms in Limpopo

Water and land remain two of this country’s most scarce resources. Now farming communities and mining companies in parts of Limpopo are gearing up for a fight over these precious commodities. Stephan Hofstätter reports how government has to decide between the interests of mines, or those of black farmers.
Issue date : 29 May 2009

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Water and land remain two of this country’s most scarce resources. Now farming communities and mining companies in parts of Limpopo are gearing up for a fight over these precious commodities. Stephan Hofstätter reports how government has to decide between the interests of mines, or those of black farmers.

The eastern Rim of the Bushveld Igneous Complex, a scenic mountainous region about an hour’s drive north of Gauteng’s weekend trout-fishing haven of Dullstroom, contains some of the largest untapped platinum group metal reserves in the world.
In the last five years, the price of platinum, which is mostly used in vehicle manufacture, shot through the roof as demand surged. The result was a platinum rush of epic proportions. It turned mountain villages such as Lydenburg and Burgersfort into boom towns, with property prices skyrocketing as mining investment flooded in.

Mining Weekly magazine has estimated R15 billion would be spent on new mine development in the region between 2003 and 2015. Platinum prices have since dived
sharply after reaching a peak of $2 290 (R20 000) per ounce last year, but
analysts predict the metal’s price will recover in the long term. Projects could be delayed, but few are expected to be abandoned.

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The region is also one of South Africa’s most water-stressed. Massive water deficits have been expected for some time from projected population growth, increased mining activity and implementation of the so-called ecological reserve. The amount of water scientists calculate must stay in rivers to maintain overall catchment health is in this reserve.

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 project was primarily to enable the mining sector to expand and was paid for by mining companies. It entailed raising the wall of the Flag Boshielo Dam by 5m at a cost of R200 million. This was completed at the end of 2006. 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 R5 billion including bulk distribution infrastructure. Another R3 billion is to be spent by provincial and municipal authorities to treat and distribute the water to 1 million domestic users. The dam is expected to start supplying water early in 2011. At its launch in 2007, former water affairs and forestry minister Lindiwe Hendricks stressed the dam’s importance in unlocking the region’s vast platinum wealth.
Last year, 23 mining companies signed off-take agreements with water affairs, committing them to pay for water allocations irrespective of use. The deal was hailed a massive development catalyst for this desperately poor region. By some estimates it would enable mines and support industries to invest a further R40 billion into the region. Water affairs likened it to the creation of Rand Water in 1903 that unlocked the mineral riches of the Witwatersrand.

Warnings from the scientific fraternity
But scientists warn these plans may not be enough to meet projected demand. This especially if the effects of climate change and economic growth are taken into account. They argue consumption per household will grow three times faster than the population because the wealthier we get, the more water we use. Add to this global warming, which increases evaporation and water availability estimates look overly optimistic.

An unpublished study by the Centre for Scientific and Industrial Research (CSIR) shows even with De Hoop and other water transfer measures in place, water demand will be close to supply by 2025. This suggests shortages can be expected soon after. The likely result is an increase in tensions between mining companies and other water users in the district. This is already happening, as a bitter water dispute between the world’s largest platinum miner, Anglo Platinum, and a small indigenous clan, the Gamawela, illustrates.

Der Brochen project
In 2004, Anglo Platinum began to investigate building a dam on its farm Richmond to develop its 100%-owned Der Brochen project. This comprised three of its farms containing 25km of the platinum-rich Merensky Reef. Anglo predicted Der Brochen has a 60-year life, mining between 1,4 and 2,9 million tons of ore per year.
These plans brought it in direct conflict with the Gamawela, who had just won a court battle to have their ancestral land, a farm called St George next to Richmond, restored to them under South Africa’s restitution laws. Anglo’s plans to build Richmond Dam presented several serious drawbacks for the Gamawela.

Most of them live in abject poverty in a waterless reserve nearby. Like in most traditional communities in the region, few even have the minimum education levels required for employment on the mines investing heavily in the region. The Gamawela’s intention had been to use the well-watered mountain property to start a commercial irrigation farming venture to supply them with food and fund an education trust.

Anglo’s proposed dam would make this impossible for two reasons. First, it would flood the arable land in the narrow valley. Second, Anglo would use up the valley’s water and prevent the Gamawela from applying to increase its allocation. This is an essential step if it wants to farm on a commercial scale.
The conflict has reached a stalemate. Approval for the dam now rests with environmental and water authorities. It’s not clear when the authorities are likely to rule. In the meantime, the Gamawela have started planting on a limited scale and are expecting respectable harvests.

Stagnation costs money
Correspondence seen by Farmer’s Weekly shows Anglo is clearly worried its failure to reach an agreement with the community represents a risk to its expansion plans.
Under new water laws, the government must take the proposed dam’s impact on the Gamawela into account before approving it. It must also promote redress for past racial discrimination in water allocation. The Gamawela’s objections could scupper the dam and associated developments. Both sides accuse each other of acting in bad faith.

The Gamawela argue Anglo was at best negligent and at worst devious in selling its neighbouring Booysendal project, along with its substantial water allocation. They argue it was done on the assumption it would be able to make up its water deficit for Der Brochen by building the Richmond Dam.

Anglo concedes selling Booysendal would force it to provide more water to the Der Brochen project area, either by building Richmond dam or requesting more water from the Olifants River water resource development project. But it insists this doesn’t mean it was trying to force government’s hand in approving the Richmond Dam. “This reflects a lack of understanding of the national water strategy for this area,” says Anglo spokesman Simon Tebele. “Additional water supply was always on the cards irrespective of the Booysendal sale agreement.”

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

Richmond Dam was therefore a mitigation measure for the industry as a whole, not just Anglo Platinum and its Der Brochen project. He says the Gamawela’s refusal to agree to its construction was simply a ploy to extort a higher compensation price.
Gamawela representative Tiny Mankge retorts Anglo’s offer of R2 million was unsolicited, inappropriate and laughable. “This land has incalculable cultural value and is the only productive asset we have,” says Mankge. “There’s no way we will sell it.” Whatever the outcome, the dispute provides mining companies and their investors a foretaste of what to expect when expanding operations in a mineral-rich region where land and water are becoming increasingly scarce commodities.     |fw