[miningmx.com] – ILLEGAL mining was endemic in South Africa’s gold mining sector with gold theft occurring in operating as well as abandoned mines, said Sibanye Gold CEO, Neal Froneman, who added the company spent up to R75m a year attempting to contain the problem.
“Every mine has got a problem,” said Froneman. “It’s not just outside but our own employees as well.” Employees would engage in illegal mining during their leave period. “It is a real issue that is totally out of control,” he said.
Illegal miners were recently rescued, and two others found dead, from an abandoned gold mine in Benoni east of Johannesburg. According to initial reports, the property was being worked by hundreds of illegal miners.
Froneman, who was speaking at the group’s full-year results presentation, said illegal mining was so bad that only the South African National Defence Force could deal with the problem. “The police don’t have the capacity to go underground,” he said.
Sibanye Gold spent about R300m a year on security – Sibanye Protection Services – at its premises on the west Rand and in the Free State of which about three-quarters was for guarding. The rest was spent on functions such as intelligence.
“Access is well controlled to the mines but these guys find a way in. There are very large syndicates that are driving the practice,” he said.
Froneman also had some choice words for other non-mining hazards in his business, including the regulatory and business environment risks posed by the government, the issue of empowerment in particular.
“No doubt the government will go out of its way to show how little we comply [with empowerment legislation,” said Froneman in response to a question regarding the firm’s empowerment credentials.
The Department of Mineral Resources (DMR) recently retained the services of Moloto Solutions to audit industry compliance with the mining charter which set down guidelines for transformation in the sector including the transfer of 26% of company equity or units of production to empowerment companies.
It has emerged that the principle of once-empowered, always-empowered does not apply to the mining sector leaving companies to find new empowerment partners if existing ones sell out of go bankrupt.
Froneman said abandoning this principle would lead to “a real head-butting session” and that disputes over empowerment compliance would “end up in the Constitutional Court”.
Mines minister Susan Shabangu said recently that the audit was proceeding smoothly and that she expected industry compliance by November.
“By November this year will be able to go public,” said Shabangu at the Mining Indaba conference on February 4. “We can’t go into 2015 without creating uncertainty.
“We have seen co-operation that gives us comfort. We are doing well in terms of moving towards compliance,” she added.
