JOHANNESBURG (miningweekly.com) - Since the first gold discovery on the Witwatersrand in 1886, the promise of gold has drawn fortune-seekers to the interior of South Africa. More recently, as individuals struggle to find legal employment, what is now being termed ‘criminal mining’ is on the increase, particularly in the Free State and Mpumalanga provinces.
In June 2009, 91 illegal miners lost their lives after a fire broke out underground in a disused section of Harmony Gold Mining’s Eland shaft in the Free State goldfield. The tragedy brought the issue under the spotlight and the then newly appointed Minister of Mineral Resources, Susan Shabangu, emphasised that all stakeholders should intensify the fight against illegal mining.
Criminal mining is now viewed as organised crime by South African courts, whereas, previously, illegal miners who were arrested were charged only with trespassing. This was achieved after several meetings with mining companies and the Justice Department in Welkom and Bloemfontein and after the sophistication of gold smuggling syndicates had become more apparent.
South Africa’s Directorate for Priority Crime Investigations, the Hawks, are now involved in the investigation of illegal mining syndicates, a problem which mining companies say they simply cannot deal with on their own. Government’s security agencies are now at the forefront of the battle against illegal mining with the newly established Hawks having taken over the investigations, adds the Department of Mineral Resources (DMR).
“In Barberton, Mpumalanga, illegal diggers are now taking over equipment and workplaces. They are openly carrying a huge number of weapons, including AK47s and 9-mm pistols. Intergang fights and shootouts are now a daily occurrence in this area. Confrontations between illegal miners and the police and security personnel are becoming more frequent. In Welkom, booby traps using explosives have been set for the police and security personnel. Illicit mining is also spawning other illegal activities, including child prostitution and child labour,” highlighted Shabangu in her address to the National Council of Provinces on the occasion of the debate on illegal mining, in September.
Rival gangs are said to be fighting underground to mine the richest seams.
Human trafficking, and smuggling, money laundering, bribery and corruption are also identified as activities spawning from illegal mining.
The problem of criminal mining, which has become more acute since 1999, is said to be a five-tiered crime syndicate hierarchy.
The mining company merely deals with the first level, which is the individual criminal miner, which could be an illegal immigrant, a former mine employee, or an existing mine employee. The illegal miners are known as Zama-Zamas, which translates to ‘try your luck’.
At the second level is the group or gang behind the individual criminal, and these gangs are said to often have arrangements with shift managers and security guards within the mining company, who are paid off to alert those underground to any impending police sweeps, or dangers. The gangs provide Zama-Zamas with the necessary equipment and food and water, but ‘luxuries’, which can include cigarettes, alcohol, and even prostitutes, are said to be exorbitantly priced.
At the third level is the local criminal syndicate, and at the fourth level is the exporter of the illegally procured gold. At the top of the pyramid, level five, is where the inter- national buyers sit.
In its criminal mining presentation to the Portfolio Committee on Mining, Harmony explained that the syndicates are highly organised, dangerous and well financed, and make extensive use of international facilities to launder their proceeds. It is also said that front companies and intermediaries are used in South Africa and internationally, and highly sophisticated export routes and methodologies are employed to legitimise the product before exporting and selling abroad.
A ‘Theft of precious metals from South African mines and refineries’ report, published by the Institute of Security Studies and the Chamber of Mines (CoM), in 2007, identified three level-five (international) gold smuggling syndicates that were supplied by 17 level-four syndicates operating in South Africa.
RISING DEATH TOLL
The DMR says that the 2009 death toll of illegal gold-miners had reached 122 by October. This is based on information given to the department by mining companies. The DMR adds that this figure includes 92 people who died of smoke and toxic gas inhalation underground in the Welkom area in the Free State, and 30 individuals who were killed while pursuing illegal mining activities in Barberton, in Mpumalanga.
The 2009 death toll is much higher than the eight illegal miner deaths reported in 2008, and the 36 reported in 2007.
In comparison, the legal mining death toll in South Africa, taking into account all mineral resources, stood at 124 as of October 12, 2009.
The common causes of accidents in illegal mining are fire and rockfalls, explains the Select Committee on Economic Development (SCED), which issued a report, in July 2009, after visiting Harmony’s Eland mine in June. “This is because the mines are unsafe and miners use wood to support the rocks and prevent them from falling. They use blasting methods to extract gold from the rocks. These elements, combined, predispose the illegal miners to death from burns, crash injuries and suffo- cation from smoke inhalation or loss of oxygen,” adds the report.
In addition to the loss of life, there is an indirect cost to the State, and an increase in social grants to support the remaining family members, which lose breadwinners in mining accidents.
About one-tenth of all gold mined in South Africa is lost through criminal activities. The DMR explains that, according to a report on the theft of precious metals compiled by the South African Institute for Security Studies and the CoM, it is estimated that the value of gold lost through criminal activities amounts to about R5,6-billion.
The economic impact of illegal mining also extends beyond the decreased revenue from taxes for government, and the loss of the mining company’s prime product, to the loss of other company assets, such as explosives, machinery and equipment, and copper cables. Further business risks for the company include the threat of mine closure as a result of explosives violations and fatalities.
The SCED report further stated that, between January 2007 and May 2008, an amount of R133 123 was recovered from illegal miners, and an amount of R96 340 was recovered from mine employees. Recovery of property and foodstuff belonging to the mine amounted to R2,2-million, while two tons of gold-bearing material valued at R1,4-million, and 1,5 kg of amalgam valued at R156 000 were also recovered.
Harmony says that the issue of illegal mining is not a new one, neither is it confined to the company, nor to the Free State goldfields. But the company has been working to combat the impact of criminal mining, and topping the lists of actions taken are access controls and security.
Biometric hand scanners have been introduced at most of the company’s mines, and clocking systems have been inspected, tested and upgraded where necessary to prevent mine employees selling their access control cards.
All shafts at Harmony have been audited on perimeters, palisade fencing has been upgraded and cautionary notices have been affixed to all closed-off areas, identifying relevant hazards and risks. Turnstile gates leading to shaft areas, bank areas and crush clocking areas have been upgraded to prevent criminal miners from entering, and shaft entrances are guarded. The company also explains that mothballed shafts that were plugged or closed by rock dump material are regularly inspected to ensure that seals are still effective.
Harmony says that a scanner has also been installed at the Ernest Oppenheimer hospital intake centre to screen all new recruits and prevent convicted persons from being employed. Information technology and time and attendance personnel are kept up to date with the latest applicable technology in access control.
Further, food and money quantities for underground mine employees have been defined, searches are done, and excess food and money are confiscated – a disciplinary code applies and guilty parties are criminally charged. Daily inspections of material cars on shaft heads are carried out in search for the food parcels and illegal entries.
Harmony says that its care-and-mainte-nance shafts lamp room will be relocated to improve control of lamp issuing and shaft clearance. Care-and-maintenance shafts are not manned unless specific examinations are carried out.
Also, Harmony says that several successful operations have been carried out with the cooperation of the South African Police Service (SAPS) and security forces, and security site leaders and reaction units spend more time at the shafts during shift changes.
Security personnel investigate all incidents, and surprise visits are done, having adopted a zero-tolerance policy.
Apprehended miners are encouraged to identify their contacts inside and outside the mine, and plea-bargaining may be con-sidered. Mine employees arrested for illegal mining activities are criminally charged.
“Harmony’s asset management forum has established a control room at Brand 2 shaft offices to monitor security alarms and operational issues at the closed shafts in the region,” the company adds.
The DMR says that it expects mining companies to improve access controls to their underground workings; tighten and ensure strict control over explosives; prevent illegal access to food, equipment and other accessories; strengthen security measures; and warn mineworkers against involvement in illegal mining.
The DMR also notes that it has established stakeholder forums in Welkom and Barberton to deal with the problem of illegal mining. The forums consist of the DMR, the SAPS, the Department of Justice, provincial and local government structures, community leaders, mining companies and unions. “The objective is to eliminate illegal mining through close coordination between all relevant stakeholders,” says DMR spokesperson Jeremy Michaels.
Pan African Resources, which mines the Consort underground gold mine, in Barberton, has also faced challenges concerning illegal mining, and 20 trespassing gold-miners were found dead at the company’s mine in March.
Pan African Resources CEO Jan Nelson has spoken out on the issue of criminal mining and highlighted that Pan African’s security costs have risen to close to 3% of total costs, which represents a total of $15/oz of gold produced. Of that $15/oz, $7/oz goes directly towards fighting criminal miners.
On the other hand, South Africa’s larger gold-miners, AngloGold Ashanti, Goldfields and DRDGold, have said that they are not heavily affected by illegal mining. Goldfields is also on the task team on illegal mining, and while isolated incidents have taken place at the company’s operations, the impact is said to be minor, and incidents are not accompanied by violence, intimidation or corruption.
While mining companies have their role to play in eradicating illegal mining, the State also plays a role. The report from the SCED recommends that the State undertakes regular inspection and checks of attendance records; audits explosives; urgently investigates suspected illegal activities and undertakes hostel raids; and that the Mine Health and Safety Act of 2008 be amended to increase fines from R200 000 to R1-million for noncompliance with safety regulations; further, local authorities must work with the SAPS and mine inspectors; and community education programmes must be introduced on the danger and health issues of illegal mining. .
“The South African government has recognised that we have a problem with illegal mining, specifically the intricate web of gold smuggling orchestrated by sophisticated and dangerous syndicates,” says Michaels.
“We are responding appropriately and, while the nature and operational details cannot be divulged without tipping off criminals, the public should rest assured that we are working in tandem with all relevant role-players to ensure we break the back of these syndicates which are robbing our country of valuable resources, which could otherwise have helped improve the lives of our people,” Michaels concludes.