Publications
Partners
Johannesburg - It is unclear how exactly multinational mining giant Anglo American came to the $101m (R1.3bn) “best estimate” it announced this week for settling its liability in the now 13-year-old legal battle to compensate mine workers suffering from lung diseases.
Coincidentally, Gold Fields also announced its provision for a settlement as part of its financial results this week, amounting to $30.2m.
This brings the value of the two provisions to R1.7bn.
James Wellstead, spokesperson for Sibanye Gold, confirmed that the company would also have a provision for a settlement included in its financial results, set for release at the end of August.
However, Wellstead warned that the figures being provided by the mines do not necessarily represent the value of a collective settlement.
READ: Silicosis: Landmark judgment for mineworkers
“I think that at this point, all the companies are coming up with their own independent estimates from their own auditors,” he told City Press.
That means that they are not necessarily using the same assumptions to calculate what was inevitably a hypothetical number.
The major outstanding players that have yet to announce provisions are AngloGold Ashanti and Harmony Gold.
Harmony will report results on August 17 and AngloGold will do the same on August 21.
These five companies will represent most of whatever settlement emerges, but it has been assumed up till now that Anglo American would face the largest liability, given its long history of dominance in the industry.
Its provision of $101m falls far short of Anglo’s share in various popular estimates of what the silicosis settlement could end up being. These gravitate around the R10bn mark.
A settlement of some sort has been under discussion since at least early last year, when a class action against the mines was certified.
READ: Mining firms hope for settlement in silicosis class action
Actuarial estimates have to consider how many sick mine workers there are – and how many of these will likely be actually found.
These men have to be divided into categories according to the severity of their illness, and then amounts have to be agreed on for each category of disease.
A small, separate settlement earlier involved more than 4 000 mine workers and set a benchmark of about R100 000 per claimant.
Estimates of the number of people potentially owed compensation have ranged from an absolute minimum of 17 000 to a hypothetical maximum 500 000.
Richard Spoor, the human rights lawyer who has driven the silicosis case, has used 100 000 as a working estimate.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
