Modern Mining July 2023

Responsible sourcing of precious metals entails a due diligence exercise.

not sourced from its mining area by virtue of its valid mining title Of late, there has been an emergence of direc tives issued by the Department of Mineral Resources and Energy in terms of section 28 of the National Environmental Management Act, 1998 (NEMA) authorising environmental rehabilitation/clean-up exercises for historical/abandoned slimes/waste rock material (which usually contain gold bearing material). Although the authorised activity relates to rehabilitation of the site, persons issued with such directive regard this directive as a form of authorisa tion to possess, treat and dispose of the material in the tailings for purposes of commercial gain, when in law, such a directive does not authorise them to do so. Another key consideration for responsible sourc ing is whether the third party has the licencing required in terms of NEMA or any other relevant environmental legislation depending on the source of the material. This is particularly important given the wide ambit of liability under the duty of care in terms of section 28 of NEMA, which requires every individual to prevent harm and damage to the envi ronment, in the event that such harm and damage cannot be prevented, it must be minimised and remediated. Responsible sourcing of precious metals entails a due diligence exercise by both the supplier and acquirer of precious metals. In order to avoid liabil ity, companies must undertake due diligences before dealing in precious metals. This will become all the more significant as the pressure mounts for compa nies to implement ESG practices in their business strategies. 

The Precious Metals Act is the gateway to responsible sourcing of precious metals.

July 2023  MODERN MINING  35