The investability of South Africa’s mining industry is slipping away. Across the country mines are under siege from mine invaders or criminals trying to extract wealth. The declaration by Richards Bay Minerals this week of force majeure on its customer contracts, shows how bad the problem has become. RBM declared it was not able to meet its contracts because it has had to shut down due to ongoing attacks on the mine’s personnel and equipment.
The mine has been under siege for years from local tribal leaders and militant groups who are demanding jobs, contracts and money. In May the company’s general manager was assassinated and equipment worth millions has been destroyed.
RBM is the biggest but not the only example. The Orion mine at Preiska and the Nuco chrome mine in North West are just two other recent examples of invasions by the mining mafias.
What’s significant about RBM is that it is the last remaining investment in South Africa of Rio Tinto, the world’s third biggest mining company. South Africa’s mining industry is desperate for foreign investment to maintain operations and open up new opportunities. The closure of an operation owned by Rio Tinto is going to chase away potential investors, worsening the decline of the industry. Potential investors, particularly in junior mining operations will worry that if a company as big and experienced as Rio Tinto cannot make it in South Africa, that smaller operations will stand no chance. As mining revenues are a vital source of government funds, the government needs to be very attentive.
Unfortunately it has not been. Police have been very slow to act in all three cases mentioned. Ordinary police are often bamboozled by legal counterclaims and regulatory loophole-jumping used by mining mafias. It is clearer than ever that South Africa needs a unit of police specialists, familiar with mining law and empowered to take on even heavily armed mining mafias.
This is not a new idea. Such a unit has been suggested in the Department of Mineral Resources and Energy’s discussion document on artisanal mining released in April. But that vague policy outline took years to develop. The mining industry needs action now.
Mining Minister Gwede Mantashe has visited Richards Bay and talked about the harm conflict is doing to investment, but there’s been little sign of concrete action. The violence in Richards Bay has not stopped, and at Nuco chrome mine, invaders are still on the mine site, unbothered by police.
Matashe needs to get his cabinet colleagues to authorise immediate police action to disarm and remove mine invaders. Police need to investigate and arrest those responsible and demonstrate that mining mafias cannot simply ignore the law. Then the cabinet needs to set up a specialised police unit and capacitate it and instruct it to act vigorously to protect the mining industry.
Talk is not enough, Mantashe needs to step up.
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