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Anglo, South Africa set to pay end miner's lung-damage battle

Sep 01 2017 11:31
Bloomberg: Kevin Crowley


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ANGLO AMERICAN PLC [JSE:AGL]

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Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Anglo, gold miners set aside millions for lung disease claims

 

Johannesburg - Former workers who contracted deadly lung diseases in South African gold mines decades ago may soon finally receive compensation.

Six large mining companies including Anglo American [JSE:AGL] have set aside about $390m to settle a class-action lawsuit brought by victims. At the same time, a $290m government-managed fund says it’s tripled annual pay-outs after tackling administrative problems that have left more than 100 000 verified claimants waiting for money.

"There’s broad agreement on the terms of a settlement," said Richard Spoor, the human-rights lawyer who brought the class-action suit after first beginning the case against producers in 2006.

The parties are working on processes to distribute payments to tens of thousands of claimants living across southern Africa, with work likely to be concluded by the end of the year, he said in a phone interview.

Alan Fine, a spokesperson for the companies, agreed on that timeframe, although he said that an agreement has yet to be finalised.

With the world’s biggest and deepest gold mines, South Africa dominated production for more than a century until 2007, drawing in workers from all over the region. Under whites-only rule, which ended in 1994, safety standards and environmental regulation were minimal, leaving hundreds of thousands of mainly black workers exposed to harmful silica dust.

Many developed silicosis, a condition caused by pulmonary damage that makes breathing progressively more difficult, and tuberculosis, a bacterial infection that is now South Africa’s biggest killer and more easily infects those with weak lungs.

Bongani Nkala, 63, lost his gold mining job in 1996 after becoming too sick to work. "The mine bosses told us we are the living corpse," he said in an interview last year. "We are not useful for the mines anymore. We are like the dead."

While the six mining companies are preparing to settle, they do not admit liability for ignoring safety standards or failing to protect their employees.

"The companies believe they have a legal basis for defending the case,” Fine said by email. “It is nonetheless the working group’s view that a fair and sustainable settlement is preferable to long and protracted litigation."

Spoor brought the companies to the negotiating table in May 2016 when a Johannesburg judge certified the miners and families of deceased workers as a class, paving the way for a class-action suit.

"There’s no way of undoing the harm that’s been done on the mines for over 100 years," Spoor said. "This is about trying to secure some substantial relief for people today who are suffering from this condition."

Spoor has a long history of fighting mining companies on behalf of workers. He won a R490m settlement from Gencor in 2003 after it was sued by South African workers from asbestos mines it controlled.

In the lung-disease case, he received backing from Motley Rice, a US law firm that spearheaded litigation against the tobacco industry that resulted in a $246 billion settlement in 1998.

While the judge said the final number of claimants could be as high as 500 000, figures provided by the Department of Health show that only 33 045 had been certified as having silicosis as of 2014. Spoor estimates the final figure will be between 50 000 and 100 000.

In addition to the lawsuit settlement, victims are entitled to money from a government-controlled fund that companies paid into since 1912.

The fund governed by the Occupational Diseases in Mines and Works Act was originally set up to cover lung diseases in white and mixed-race workers and was expanded in 1973 to cover black and Indian workers.

However, the companies’ levies were only enough to cover compensation payments, not the administrative costs needed to track down and diagnose claimants, according to Barry Kistnasamy, the Department of Health’s compensation commissioner.

Paper files

"You take a scheme that covers white workers, mainly around Johannesburg, and expand it to cover half a million workers from all across South Africa and surrounding countries," he said in an interview.

"Now you have to track these people down, provide diagnostic services, and there was no money to do that."

When Kistnasamy was brought in to fix the fund in 2012, he found 32 rooms filled with paper files, many of which were incomplete or duplicated. He set out to secure the needed funds to digitize records and set up programs around the country to trace and certify claimants.

The fund has paid out R220m to 6 700 people in the last 12 months, Kistnasamy said. That’s up from the 2 000 claimants compensated in 2015 to 2016.

"It’s been a long process," he said. "We’re making progress and people are now getting paid what they’re owed."

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