Hazardous waste management in South African mining – a CGE analysis of the economic impacts

There is no doubt that improved hazardous waste management in mining and mineral processing will reduce environmental and health risks in South Africa. However, sceptics fear that waste reduction, appropriate treatment and disposal are not affordable within the current economic circumstances of the country. In particular, it is argued that higher treatment and disposal costs would weaken the country's international competitiveness in important export markets on the one hand, and place heavy adjustment costs on black workers on the other. Thus, improvements in waste management are not enforceable, from either an economic or a social point of view. This article deals mainly with the first aspect and touches upon the second. It investigates the short-term and long-term sectoral impacts of an environmental tax on hazardous waste in South African mining, using an open-economy multisectoral computable general equilibrium (CGE) model. The results bear out the expectation that the possibilities for shifting higher production costs are limited in an open economy. Moreover, the results also show that the brunt of the adjustment resulting from an isolated approach towards hazardous waste management will have to be borne by black workers.