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Shabangu: Make CEOs liable for mine deaths

Feb 07 2012 12:58 Reuters

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ANGLO AMERICAN PLC [JSE:AGL]

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HARMONY GOLD MINING COMPANY LIMITED [JSE:HAR]

Last traded 32.29
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Last Updated: 16/04/2014 at 04:29. Prices are delayed by 15 minutes. Source: McGregor BFA

Anglo American Plat Ltd [JSE:AMS]

Last traded 491.33
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Cumulative volume 122086
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Last Updated: 16/04/2014 at 04:30. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Town  - South Africa’s mines minister said on Tuesday that industry chief executives should be held liable for avoidable fatalities, also raising the possibility of court action.

Targeting chief executives would take her safety drive to new levels as the government tries to stem the death toll in the country’s mines, the world’s deepest and among the most dangerous.

“Fatalities which could have been avoided, we feel that CEOs must be held liable for those accidents, because they are responsible for the operations. As they show interest in how they grow the profits they must also show interest in safety,” Susan Shabangu told Reuters in an interview.

Asked if this meant possible court action, she said: “These are some of the issues that we must look at. For me the courts are the last option. But legislation provides for us to go to courts.”

Earlier she told the annual African mining conference in Cape Town that the platinum industry’s contribution to fatalities in the mining sector remained a “serious concern” and defended safety stoppages which she said had contributed to a drop in accident rates.

South Africa’s platinum sector has been battered by oversupply, squeezed margins and an uncertain economic outlook, making producers increasingly vocal about regulatory pressures, particularly the impact of inspections and stoppages as part of the government’s zero-harm target.

“The department has been greatly concerned about lack of improvement in compliance and fatalities in the major platinum mines,” Shabangu said.
“The platinum sector alone contributes about 30% of all fatalities which remains a serious concern.”

The gold sector has also been subject to increased scrutiny and Graham Briggs, chief executive of Harmony Gold Mining Company [JSE:HAR] South Africa’s third largest gold producer, described the government’s campaign on Monday as punitive. Harmony cut its full-year output target by 13% because of the stoppages.

Shabangu said that there was a slight drop in mining fatalities to 123 in 2011 from 127 in 2010 and that 13 miners have been killed so far this year in South Africa.

She also said in her speech that the ANC had reinforced in a key policy document that nationalisation, long feared by the country’s mining industry, was not a viable option.

“I must indicate that we welcome the fact that the report of the ANC task team on nationalisation has reinforced the ANC’s earlier decision that nationalisation is not a viable policy for South Africa,” she said.

Lost production

Anglo American [JSE:AGL] chief executive said its platinum unit had lost 100 000 ounces of production last year because of the blanket nature of safety stoppages, which can seen an entire mine shut because of a problem on a single shaft.

Anglo Platinum [JSE:AMS] the world’s largest producer of the precious metal, has already said that safety stoppages at its operations more than doubled to 81 last year as part of an industry-wide drive by the government to reduce the death toll in the country’s mines.

Cynthia Carroll said in a telephone interview with Reuters that the repercussions rippled beyond the direct reason for the stoppages.
“We would say that over 100 000 ounces were lost and it’s not related to the safety issue that was identified. We are going to shut down whole mines and that is the impact,” she said on the sidelines of the Mining Indaba.

“There has been an effort on the part of the CEOs to sit down and have conversations with the mining ministry to talk about the approach that has been taken,” she said.

Amplats produces around 2.6 million ounces of platinum a year and accounts for over a third of global supply of the precious metal.

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