Anglo American’s Mitigating Water Risk in Emalahleni, South Africa (2011)

In 2007, Anglo American recognized water as a core business risk, for both long-term strategy and current operations. In 2010, the company developed a high-level strategic plan for water that includes working beyond the “factory fence” and focuses on resilient business, stewardship, and catchment management. Each particular business region (e.g., southern Africa) has an engagement strategy tailored to the regional perspective and to the operational and water concerns there. In Emalahleni, South Africa, collective action was used to mitigate the water quality and quantity concerns of the region. The risk concern was threefold: 1) The mines, situated at a geological low in the catchment, are at risk of flooding, which could sterilize coal reserves, terminating further mining opportunities; 2) new regulatory requirements curtailed the release of mine water into the catchment without prior treatment; and 3) the rapid development of the city of Emalahleni resulted in the demand for potable drinking water exceeding supply, endangering the ecological reserve and users downstream of the city. The city, therefore, began exploring alternative water sources to supplement their demand.

Anglo and the community of water users established that reuse of mine water would help mitigate all of these risks, and the use of collective action was seen as the strategy toward putting together the plan. With Anglo American taking the lead, a joint body was established as the vehicle by which integrative collective action could take place during development. The coal mines in the region (three Anglo American mines and one BHP Billiton mine) put forward the capital expenditure and running costs of treating the mine water to a quality suitable for discharge into the environment. The municipality is responsible for the costs of treating the water to potable standards and conveying it to their reservoirs. All parties were encouraged to come to the fore with their respective contributions, a needed dynamic that addressed the ownership and value of water.

Besides securing the required quality and quantity of water, the collective action has opened up future opportunities for Anglo American, the government, nongovernmental organizations, and other businesses to engage and problem solve on an ongoing basis.