ArcelorMittal South Africa will have spent R3.8 billion in the decade to 2015 on projects to cut pollution from operations on top of a worst-case legacy cost of R1.5bn to mop up after decades of ground and water pollution.
The environmental spend coincides with the introduction of stricter pollution laws in South Africa. The legacy portion of the clean-up bill is three times bigger than the R563 million ArcelorMittal SA said would be devoted to historical clean-up costs during a presentation to investors on the steel maker’s 2010 financial results.
The R1.5bn cost was cited by ArcelorMittal SA general manager for environment Siegfried Spanig this week as a “worst-case scenario” as the company acknowledged large-scale pollution problems at operations.
As part of iron and steel parastatal Iscor during apartheid, ArcelorMittal SA refused accountability for pollution, even as landowners around its Vanderbijlpark plant and headquarters took legal action in the 1990s to interdict operations, leading to an out-of-court settlement.
A further round of litigation failed, and ArcelorMittal SA was subsequently accused of intimidating its neighbours as non-governmental organisations complained that the steel maker urgently needed to address pollution of groundwater with toxins from unlined ponds.
“Things have really changed,” Spanig said, referring to a “major turnaround” on compliance within ArcelorMittal SA. Half of the group’s legacy clean-up is being incurred at Vanderbijlpark, which accounts for half of annual steel output of 7.1 million tons.
“We need to admit we have problems at Vanderbijlpark,” Spanig said, in reference to the unlined ponds that, according to the group, have all been taken out of operation and are now mostly dry. A decade ago, Dam 10 started drying out. At 75ha, it is one of of ArcelorMittal SA’s biggest facilities and also among its biggest environmental headaches.
Commissioned in 1960 for waste water storage and evaporation, Dam 10 has sent a plume of toxic waste in the direction of the Rietspruit about 10km away.
Karien Zantow, the head of ArcelorMittal SA’s environmental unit at Vanderbijlpark, said modelling of the ground water problem at Dam 10 showed it “could have been worse” compared with initial projections. Based on this modelling, the polluted groundwater would not in 100 years reach the Rietspruit, she said. The Rietspruit flows ultimately into the Vaal River.
A ground water management plan for Vanderbijlpark had been finalised and a decision taken to submit it for peer review. Spanig said this was “to make best possible choices”.
Phineas Malapela, the chairman of the Vaal Environmental Justice Alliance (Veja), said yesterday that ArcelorMittal SA was “up to date” on building new lined dams and rehabilitating old dams at Vanderbijlpark. But Veja was pursuing legal action to force the company to release an environmental master plan compiled from 2000 to 2002. The matter was being processed at the SA History Archives, he said.
In its latest integrated annual report, ArcelorMittal SA said the master plan was written for internal purposes – “basically a self-critique” – and was “outdated and irrelevant”. It did not intend to release the document, reportedly 9 000 pages long.
But Malapela alleged: “Their argument in the beginning is that it was a public document. Then they said they would release it in pieces. Then they said it was done specifically for ArcelorMittal. Eventually when SA History Archives wrote to them, together with us, threatening they’d have the matter taken to court, then ArcelorMittal SA said they wanted to release it but their lawyers said no. It’s semantics, they’re playing with words, rather than coming straight.”
While this plays out, ArcelorMittal SA has continued spending on environmental projects at Vanderbijlpark and beyond to facilities in Vereeniging, Pretoria and Newcastle. The relatively new Saldanha plant in the Western Cape, commissioned in 1998, requires least attention.
The group has thus far spent R921m on projects to reduce emissions of dust and sulphur dioxide, coinciding with the introduction of new, stricter air pollution regulations in South Africa, including a R220m dust extraction system at the century-old Vereeniging plant that has reduced stack emissions and dust loads to within legal requirements and pleased the town’s second-hand car dealers. ArcelorMittal SA will spend another R1.8bn to reduce air emissions further across its facilities.
The group has targeted about R500m for small projects and will focus a further R615m on removing contaminants from effluent, phasing out effluent irrigation and ensuring waste disposal compliance alongside new waste regulations. Its goal is to move towards zero effluent discharge, eliminate waste water discharge, and reduce fresh water use.
The firm said it was “coming under pressure” from authorities to re-use water, a comment that reflects the role of the government’s big stick in driving industry’s anti-pollution measures. ArcelorMittal SA itself also referred to the “harsh and swift” action of the Green Scorpions after a May 2007 inspection at Vereeniging resulted in the closure of a waste disposal site and an air emissions directive.
Alongside its environmental goals, ArcelorMittal SA has given notice of its intention to sweat its ageing assets in applying for exemption from air quality compliance for its older coke batteries, due to close in eight years. This underlines the probability that the steel maker is not forking out R5bn-plus to warm the cockles of its green heart. - Business Report