Stilfontein. Bench-Marks Foundation general manager Busi Thabane told Business Report on Thursday that there are more than 6000 abandoned gold mines and shafts across South Africa. Photo:Timothy Bernard: Independent Newspapers
As South Africa battles with the reality of the Stilfontein disaster - where at least 78 illegal gold miners have died and more than 240 Zama Zamas - large-scale gold mining companies and Bench-Marks Foundation, which monitors resource firms, have painted a gloomy picture of the magnitude of the problem.
Bench-Marks Foundation general manager Busi Thabane told Business Report on Thursday that there are more than 6000 abandoned gold mines and shafts across South Africa, while James Wellsted, a spokesperson for Sibanye-Stillwater, said “Illegal mining is a significant challenge due to the prevailing circumstances” in the country.
“Poor economic growth and low investment, high levels of unemployment, significant poverty, crime and corruption, and ineffective state organs, foster these conditions, which support and nurture criminal enterprise and activities such as illegal mining,” said Wellsted.
Sibanye-Stillwater is among the big gold producers in South Africa, alongside DRDGold, Harmony Gold as well as Gold Fields, which operates the South Deep mine in the Witwatersrand Basin.
Illegal gold mining has been happening at disused gold mines such as Stilfontein and at existing mining operations.
Wellsted said, “Yes, we have and continue to be affected by illegal mining. Not only at our discontinued operations, but in our operating mines underground and on surface as well as our processing operations.
“It is prevalent across the gold industry and in adjacent areas. Illegal miners infiltrate formal and active operating mines and surface operations as well as discontinued mines,” he said.
Although the Minerals Council could not comment on illegal gold mining and the significance of the Stilfontein crisis, the private gold mining sector in South Africa is working with the authorities “to address” this growing threat.
The government, particularly the Department of Mineral Resources and Energy, has been criticised for its handling of the Stilfontein crisis and for failing to enforce how companies rehabilitate closed mines.
According to the Bench-Marks Foundation, the proliferation of illegal gold miners at Stilfontein is the same as everywhere across South Africa.
“This is a big problem. There are 6000 abandoned mines in South Africa. All of those shafts that are not properly closed so illegal syndicates gain access to those shafts,” said Thabane.
She alleged that some junior miners employed gold dealers to buy illegally mined gold. Syndicates and some jewellers were then the ultimate beneficiaries of this gold.
“You have gold buyers who can be anybody; a junior miner or a jeweller, would pay a negotiator a certain amount of money to buy gold from the illegal miners. The primary buyer could also be licensed dealers and the gold is then injected back into the formal economy,” said Thabane.
In a 2014 report, the World Gold Council noted that vast amounts of gold were smuggled out of Africa yearly. This includes 25 tons smuggled from South Africa worth over $1 billion (R19bn), 30 tons from Sudan and 20 tons from Zimbabwe, worth over $500 million. Some South African banks have previously been named in “serious allegations of serial bribery” involving gold dealings and smuggling.
The South African banks were said to have been involved in facilitating the “laundering of gold and the illicit profits from the sale of gold from Zimbabwe and South Africa” via Dubai.
Nonetheless, Bench-Marks Foundation said it was not pleased with the government’s handling of the Stilfontein crisis and the Department of Minerals reluctance to take responsibility for the proliferation of illegal gold mining.
“Mining companies are not doing (mine closures) properly. Part of their license is to have a mine closure plan, but this needs to be implemented ahead of closure of the mine and also how to rehabilitate the environment around the mine and some of these shafts have been abandoned for over thirty years,” Thabane said.
BUSINESS REPORT