Min­ing’s evil triplets

Finweek English Edition - - INSIDE - BY DAVID MCKAY

Govern­ment has claimed that it “doesn’t have a leg to stand on” to pre­vent a re­peat of the events in Au­gust 2009 when em­pow­er­ment or­gan­i­sa­tion Aurora Em­pow­er­ment Sys­tems pro­posed to buy the gold as­sets of Pamodzi Gold for R215m.

Aurora, which was led by Zondwa Man­dela, the late Nel­son Man­dela’s grand­son, and Khu­lubuse Zuma, nephew of the pres­i­dent, em­barked on an odyssey of bro­ken prom­ises in which the main losers were the fam­i­lies of min­ers who were hop­ing that Aurora would breathe new life into the fail­ing Grootvlei mine as well as gold as­sets in Orkney.

In the end, the mines were stripped and lives were lost as il­le­gal min­ers were pur­sued and shot dead by the ques­tion­able se­cu­rity al­legedly drafted in by Aurora. It was a hu­man dis­as­ter, and there are fears it could be re­peated.

This time it’s the Blyvooruitzicht mine near Car­letonville on the West Rand. The mine was placed into liq­ui­da­tion by Vil­lage Main Reef (VMR), a Jo­han­nes­burg-listed com­pany. The mine now ef­fec­tively be­longs to the liq­uida­tors whose man­date it is to re­turn what value can be sal­vaged for cred­i­tors.

Bid­ding for the mine is Goldrich, which has for­mer Aurora ex­ec­u­tives Fazal Bhana and Thu­lani Ngubane among its ranks. Ac­cord­ing to Govern­ment, how­ever, it doesn’t have le­gal grounds to chal­lenge the award of the as­sets to Goldrich not­with­stand­ing the com­pany’s ques­tion­able prove­nance.

“Legally, we don’t have a leg to stand on to refuse par­tic­u­lar in­di­vid­u­als the right to ap­ply es­pe­cially when deal­ing with brown­fields,” said Su­san Sha­bangu, Min­is­ter of Min­eral Re­sources. “It be­comes more of a com­mer­cial trans­ac­tion.” In other words, money talks.

Says Sha­bangu: “We are very much con­cerned and wor­ried. The min­ing right still be­longs to Blyvoor. Our big­gest con­cern is the be­hav­iour of liq­uid-ators which might lead the as­set [Blyvoor] into ma­jor chal­lenges.”

While Govern­ment has of­ten spo­ken of the need for the SA min­ing sec­tor to help break the dom­i­nance over ‘the evil triplets’ of in­equal­ity, poverty and un­em­ploy­ment, it’s worth ac­knowl­edg­ing that the sec­tor has evil triplets of its own with which to con­tend.

Mine com­mu­nity im­pov­er­ish­ment as with Aurora and pos­si­bly Goldrich is one, but pol­lu­tion, and un­der­ground fa­tal­i­ties are an­other. The deaths of nine min­ers at Har­mony Gold on 3 Fe­bru­ary comes amid the best safety sta­tis­tics for the min­ing sec­tor in 2013.

The other is­sue was the en­vi­ron­men­tal ping-pong un­der­way at Min­tails, which has gold re­treat­ment op­er­a­tions at sites near Krugers­dorp. The DMR sus­pended Min­tails ac­tiv­i­ties amid claims by Kag­iso res­i­dents that they were be­ing ad­versely af­fected by the op­er­a­tions.

That’s noth­ing, ac­cord­ing to Bloomberg News – one of its re­porters took a soil and river sam­ple near Blyvoor, and tests showed that ura­nium oc­cur­rence in the sam­ple was 4 000 the nat­u­ral level. Lo­cal res­i­dents are ob­vi­ously vul­ner­a­ble and so are in­vestors.

The last t wo op­er­a­tors of Blyvoor were DRDGold and Vil­lage Main Reef (VMR) with the lat­ter claim­ing it never legally owned the mine de­spite op­er­at­ing it for 18 months. One senses this is a bun­fight wait­ing to hap­pen.

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