JOHANNESBURG (miningweekly.com) – Since the end of 2008, reports of illegal mining at top producing South African operations have become more frequent.
In an effort to settle the fears of international investors, South African President Jacob Zuma brought the issue of illegal mining to a head in London during this month’s State visit to the UK.
Zuma said that the South African government was concerned about a widely held view within the investment com- munity that illegal mining was taking place across South African operations and that it was negatively impacting on the productive environment of legal mining.
“Government is taking this matter seriously and cases are being investigated,” Zuma told the international community.
The President revealed further that an amnesty period had been declared in an attempt to encourage any existing illegal miners to end illegal activities, failing which they would face the full might of the law.
BARBERTON FRONT LINE
An Aim- and JSE-listed mining company that has been significantly affected by the problem of illegal mining is junior gold- miner Pan African Resources, which has three producing mines in the Barberton area of Mpumalanga province.
These are the Fairview, New Consort and Sheba gold mines, which produced 45 000 oz during the six months ending December 31, but which would have produced 4 000 oz more had it not been for illegal mining.
Speaking at the company’s interim results presentation, Pan African CEO Jan Nelson pointed out that, of the 4 000 oz lost, some 1 000 oz had been lost directly, while the other 3 000 oz had been lost indirectly because the Barberton mines were forced to shut down to allow a 180-strong security team to scour underground for illegal miners.
A total of 910 illegal miners have been arrested in all, 326 during a security swoop in December, and another 509 since then.
During the next six months, Pan African will spend R4-million a month on additional security at its Barberton operations, on more guards and a security manager.
The company has managed to seal off most of the access points into the mine, but it has not prevented the situation from worsening in the last six months of 2009.
Until August, Pan African Resources had been spending R6-million over a six-month period on security, but, from August, the company began spending almost five times more, R24-million, over six months.
“If you take that over a year, it means that the company will be spending R48-million on security, which is approximately 40% of the company’s forecast profit. This is definitely not sustainable,” says Nelson.
The security complement has doubled in size and a permanent executive for safety operations has been appointed.
Nelson finds that most of the illegal miners come from the informal settlements around the mines, and comprise organised groups and structures that resemble a highly funded organisation with significant intelligence.
He adds that most of the perpetrators arrested during the December sting were foreign nationals from neighbouring countries, such as Mozambique, Swaziland and Zimbabwe.
NO BREAD AT COOKE
In an effort to curb the problem of illegal mining, Rand Uranium imposed various security measures, including a food ban at its Cooke underground operation, near Randfontein, Gauteng.
Owing to this, concerns around the company’s practices have been raised by labour unions.
Rand Uranium CEO John Munro reports that the food ban was a temporary, yet necessary, measure, but was part of a holistic strategy to eliminate this problem.
“The ban applies to all food products and cold drinks, but not to water. To compensate for not having access to food the whole day, staff are offered a meal that can be taken either at the start of or at the end of each shift. Staff that have medical conditions, such as diabetes, and have to eat sporadically during the day have been moved to surface operations,” says Munro.
He adds that the food ban is one of many measures that the company has undertaken to reduce illegal mining. These measures include a complete revamp of the access control system to the underground operations, culminating in the installation of a biometric access control system at all access points to shafts, which cost in excess of R6-million, as well as the stepping up of security efforts around underground operations at a substantial additional cost of R200 000 a month.
As at Pan African Resources, the problem was significant at Rand Uranium, with between 400 and 500 illegal miners present at the Cooke operation at the height of the problem. Currently, there are between 30 and 40 illegal miners at Cooke, whom Rand Uranium hopes to have removed by the end of the year as they pose a danger to employees and the productivity of the operation.
THE BATTLE OF TSHEPONG
Gold-mining major Harmony Gold, headed by COO Graham Briggs, has also imposed a food ban at its Tshepong operation, in the Free State. The mine is of strategic importance to Harmony as it is the company’s top producing mine.
Harmony executive: corporate and investor relations Mariaan van der Walt says that this did not deter the illegal miners as they would clash violently with the legal miners in the hope that they had food on them.
Van der Walt adds that the illegal miners also engage legal mining staff in the hope of gaining access to working tools and mine equipment.
The equipment is then used in the areas controlled by the illegal miners, who also damage underground infrastructure and are sometimes injured in the process.
“It’s then up to us to arrange for a rescue and evacuation programme,” Van der Walt says.
Harmony spent R90-million on security in the 2009 calendar year as opposed to R76-million in the 2008 calendar year.
SOCIOPOLITICAL CHALLENGES
There are significant social problems that are starting to imbed themselves in the communities where the illegal-mining syndicates operate. More shebeens are emerging, syndicates are taking children out of schools and getting them to work as illegal miners. There are also more reports of violence against women, says Nelson.
Pan African has been effective in mitigating the illegal mining challenge by enlisting the help of sections of the community that are unhappy with the downward spiral within their communities.
Some community members are choosing to act as key informants to the South African Police Service, which has declared illegal mining part of organised crime.
GOVERNMENT SHOWDOWN
Mining companies are happy that illegal mining has even evoked response at Presidential level and drawn sharp condemnation from Mineral Resources Minister Susan Shabangu.
However, in line with the government amnesty, Pan African, Harmony and Rand Uranium have also offered amnesty.
When Shabangu visited the Barberton mines with Police Minister Nathi Mthethwa, in December, she reiterated the importance that economically viable mining operations play in community development.