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The dangerous world of South Africa’s deep-level mining

It is another world – dark, cramped, unbearably hot, the air laden with harmful dust, earth tremors an ever-present threat, and the normal world of safety and sunlight a barely imaginable four or more kilometres above, well beyond reach in a moment of crisis.
This is the dangerous world of South Africa’s deep-level mining.

It is unquestionably an environment of high risk – but any outdated conception of antediluvian toil in the depths of the earth overlooks the strides in technological sophistication that define South African mining today.

Increasing mechanisation relieves miners of any number of dangerous activities; new technologies make mines safer and more comfortable places to work; advances in rescue procedures and mining processes significantly reduce risks; and great efforts are being made to improve compensation for miners with silicosis and various other diseases contracted underground.

All this emerges from the latest @Liberty report – “Deep and Dangerous: Health and Safety in Our Mines” – from the IRR (Institute of Race Relations).

But what is also clear from the report, written by the IRR’s head of policy research, Dr Anthea Jeffery, is that, for all the advances made, significant problems remain.

Not the least of them is legislation that is demonstrably open to misapplication, corruption and the mustering of ideological hostility. In combination, such abuses risk crippling a sector that has the potential to grow jobs, tax income, foreign earnings and the investment the country desperately needs to boost economic growth.

Jeffery argues that reforms are urgently needed to “strike a more appropriate balance” in safeguarding both mineworkers and the sustainability of the mining industry.

Better law, the report contends, would reinforce gains in an industry that has reduced fatalities from an average of 624 a year between 1971 and 1990 to an average of 90 deaths a year since 2012. As a result, annual fatalities in mining are not much greater than those in the construction industry.

The industry’s achievements in reducing fatalities are praiseworthy. But the government and many commentators remain hostile to it and seem unwilling to acknowledge the gains notched up. Legacy issues have much to do with this, and help explain why the sector is still awkwardly snared between past and future.

Jeffery points out that mining has a potentially bright future, given the country’s “virtually unparalleled mineral riches”, estimated in 2010 at some $2.5 trillion, well ahead of both Australia and Russia, whose resources are estimated at $1.6 trillion each.

And, though mining’s contribution to GDP has declined as the economy has modernised, “it remains vital to employment, investment, tax revenues, and export earnings”.

That mining is the bedrock of the modern South African economy is a testament to both its importance and its vulnerability. The latter stems mainly from its close association with apartheid’s profound inequalities.

Racial discrimination permeated the industry for decades, with blacks long being denied skilled jobs, management posts or trade union rights.

Black mineworkers also “bore the brunt of deaths, injuries, and TB on the mines (though silicosis was initially higher among whites)”. This was partly because far more blacks than whites worked underground, but it was also because blacks “often had dirtier and dustier jobs than whites”.

“The legacy of pervasive racial discrimination on the mines casts a long shadow over the industry today, making it all the more difficult to find the right policy balance on health and safety issues.”

Mining law since 1994 – especially the controversial mining charter (the revised version of which is the subject of a court challenge), but also the Mining Health and Safety Act (MHSA) of 1996 – has sought to address the apartheid legacy. However, existing and proposed regulation is increasingly placing the entire industry at risk and making it ‘uninvestable’.

In the case of health and safety regulations, Jeffery writes: “Given the dangers intrinsic to mining, especially at the extraordinarily deep levels sometimes found in South Africa, there is an obvious and compelling need for appropriate rules to protect the safety of mine employees. Those rules must also be properly enforced. The MHSA has many sound provisions and some important mechanisms to help ensure their proper implementation. However, it also has various clauses which lend themselves to abuse by hostile or overzealous inspectors and other officials.”

While the industry “has embraced a ‘zero harm’ target for fatalities by 2020 and mine deaths have been much reduced, safety stoppages ordered under overly broad provisions in the MHSA amount to “an abuse of power” when done for “trifling reasons”.

Among the case studies in the @Liberty report is the costly and unwarranted stoppage that followed a senior inspector of mines’ visit to AngloGold Ashanti’s Kopanang mine at Orkney in North West in October 2016.

An irregularity concerning the storage of unused explosives in one section of the mine (where 90 people worked) led to a stoppage order shutting down the whole mine (employing 4 200 people). The matter went to court, where a judge ruled in the mine’s favour.

By then, Jeffery notes, “the unwarranted safety stoppage had cost the company R48m in lost production” and “AngloGold had lost a total of 82 800 oz of gold production to safety stoppages over the year”.

In the first six months of 2016 alone, the company had experienced 77 safety stoppages. These had reduced its production by some 44 000 oz and cost it roughly R834m in forfeited revenue. “Yet only six of the 77 notices related to fatal accidents.”

The report cites a leaked Chamber of Mines document showing that an increasing number of safety stoppages from 2012 to 2015 had cost mining companies some R13.6bn in lost revenue – and this “despite the enormous improvement in fatality figures”.

Elsewhere in the report, it emerges that in 2015, Impala Platinum (Implats) had 54 safety stoppages in the first six months of the year and lost 52 000 ounces of platinum group metals, worth R720m. Salaries to employees barred from producing, coupled with other costs in maintaining operations, amounted to some R600m at suspended mines.

And this, Jeffery says, in a climate in which the “sustainability of many mines is under great pressure from lacklustre commodity prices and vastly increased electricity, labour, and other input costs”. So great is the squeeze that some 100 000 mining jobs have been lost over the past seven years.

Jeffery recommends that inspectors who order stoppages “for no rational reason should be held personally liable for any legal costs incurred in court applications to have their instructions set aside”. In addition, “in particularly egregious instances, they should be held personally responsible for at least some of the enormous costs of unnecessarily halting production”.

The second key area of health dealt with in the @Liberty report concerns lung diseases associated with mining – silicosis and pulmonary TB (which can be triggered by exposure to silica dust, among other factors).

Jeffery writes that “every effort must be made, as the mining industry is already intent on doing, to reduce dust emissions and protect mineworkers” and that the government’s “key obligations are to support these initiatives, applaud all successes, and resort to penalties only where these are objectively required”.

In addition, the government “must also maintain (if necessary, via public-private partnerships) a statutory compensation system that provides adequate compensation and is highly efficient”.

Mine workers with silicosis and other diseases covered by the Occupational Diseases in Mines and Works Act (Odimwa) are effectively disadvantaged because of a payments limit (R105 000) which the health minister has not used his power to increase since 2009.

Furthermore, the Odimwa fund, “despite strenuous efforts by the mining industry to make the system work”, still has a backlog of some 94 000 claims already certified for payment, and a much bigger backlog of up to 700 000 claims still needing to be assessed.

In the interim, Jeffery points out, “the government’s failure to get Odimwa working has encouraged a number of civil claims against the gold mining sector, where silica dust has always been difficult to control”.

Civil claims – such as the massive Nkala class action launched in 2012 against 32 gold mining companies and authorised to proceed by the Johannesburg high court in 2016 – are ongoing. Even if a settlement in Nkala is reached, this could trigger many more class actions of a similar kind.

Potentially high compensation claims, in combination with regulatory “own goals”, such as the 2017 mining charter, have already, says Jeffery, prompted  “major potential investors to turn away from South Africa to other countries where the government is less hostile and mining legislation is more stable, competitive, and certain.”

Protecting health and safety in mines “is vital”, but policies and laws “must strike the right balance”.

“The legacy issues that have tainted the mining industry and eroded trust need to be acknowledged,” Jeffery writes. “But a constant focus on the evils of the past will deter fresh investment and make it harder still for the industry to survive and thrive.”

– Morris is head of media at the IRR, a liberal think tank that promotes political and economic freedom.

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