Zwane up in arms over R26m claim | Fin24
 
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Zwane up in arms over R26m claim

Jan 29 2017 06:00
Dewald van Rensburg

Johannesburg - Sibanye Resources’ decision to sue government officials for an allegedly unwarranted safety shutdown at its Kroondal platinum mine last year is sparking a new feud in a sector infamous for straining business-government relations.

The damage claim is for R26 million and has provoked Mineral Resources Minister Mosebenzi Zwane into this week issuing a combative statement claiming that not only Sibanye, but also AngloGold Ashanti, are “suggesting that they are refusing to comply with the mining laws of the country”.

The swipe at AngloGold follows an important court ruling in November last year that cemented the principle of proportionality when the department of mineral resources (DMR) orders safety shutdowns.

Judge André van Niekerk was scathing of the mine inspectors who had closed down AngloGold Ashanti’s entire Kopanang gold mine on the basis of relatively minor infractions in a small part of the mine that did not present major safety risk at all.

The mine inspectors “clearly fail to appreciate the conceptual framework within which they are required to discharge their duties”, wrote the judge.

“The respondents [inspectors] are clearly under the impression that they are empowered to close entire mines on account of safety infractions in a single section or on a single level, without specific reference to objective facts and circumstances that render the whole mining operation unsafe,” read the judgment.

This unambiguous ruling against the inspectors provides potent ammunition to any mine that feels it has been disproportionately punished with shutdowns.

Sources in the industry say that it is too soon to tell if this ruling has made the DMR more circumspect about shutdowns, but it certainly paves the way for more legal challenges whenever inspectors order mine-wide stoppages.

Sibanye’s claim for R26 million relates to a stoppage at its Kroondal platinum mine preceding the AngloGold ruling.

The Sibanye claim is not much, considering the cost of safety shutdowns that mining companies frequently include in their financial statements.

In the AngloGold case last year it was claimed that the company was losing R9.5 million every day the stoppage remained in effect.

The tension between mines and the DMR around stoppages is far from new.

So-called section 54 stoppages – referring to a section in the Mine Health and Safety Act – have been the bane of the mining industry’s existence for a long time.

Back in 2012, Northam Platinum made waves by going to court to interdict a stoppage and the issue was top of the sector’s agenda until the strike waves of 2012, 2013 and 2014 moved it to the back burner.

Last year, Impala Platinum won a court case against the chief inspector of mines, overturning a R1 million administrative fine imposed in 2013.

The government decided to no longer oppose the case.

It revolved around the death of an employee who had wandered into an unsealed, abandoned part of the mine where there was a high concentration of methane in the air.

It was supposed that he lit a cigarette, which set off the fire that killed him.

The reason the fine was overturned was technical – that the inspector had not properly informed Impala about what documentation he would rely on to make a decision – not because the fine was found to be disproportionate.

Impala spokesperson Johan Theron told City Press that it had never had to approach a court about a disproportionate section 54 shutdown.

“We’ve had a difficult 12 months with two major incidents with multiple fatalities. We were shut down, but that was obviously warranted.”

Impala has in the past threatened to approach the courts to interdict overzealous section 54 notices, but has never actually come to that, he said.

SAFETY STATS

Zwane recently struck a far more conciliatory tone at the release of the mine safety statistics for 2016.

The minister did, however, say that his department “has initiated discussions with the National Prosecuting Authority to strengthen the ability to prosecute those who are negligent in their responsibilities, in as far as fatalities, injuries and occupational diseases in the sector are concerned”.

The numbers themselves were hard to interpret because they were incomplete.

Zwane released the total number of fatalities and injuries, but not the traditional measure of safety – the rate per million hours worked.

Because of the secular decline of gold mining, large strikes and recent job losses in platinum and other mining sectors, merely comparing the absolute numbers cannot represent the actual safety performance of the industry.

According to the Chamber of Mines, the consolidated numbers have not yet been provided to them either.

This distortion is particularly severe in the recent platinum statistics. Last year there were 27 platinum mining fatalities compared with 21 in 2015. 

This “29%” worsening is bad enough, but in reality, the actual deterioration of safety is more extreme because the platinum sector also shed thousands of jobs.

On a per capita basis, the deterioration was closer to 43%.

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