Orion’s Smart rebuts criticism R500m in Prieska mine procurement ignored communities

Errol Smart, CEO, Orion Minerals

ORION Minerals has defended its recent procurement spend saying that R500m in expenditure on the Prieska Copper-Zinc mine in South Africa’s Northern Cape was used to employ specialist mining, consulting, and banking services.

Ronald Februarie of Siyathemba Business Chamber and Community Forum told Moneyweb, an online publication, that his organisation staged peaceful protests against Orion Minerals because spent it spend money on contracts “without any meaningful local participation”.

Februarie rejected the term “mafia” used by Errol Smart, CEO of Orion, regarding community protests, and said that the mining company had deployed armed security even in the face of peaceful action.

The background to Februarie’s comments is the urgent interdict sought by Orion on May 7 following violent protests from community members near the premises of the A$432m (R4.6bn) Prieska Copper-Zinc mine. Smart said the protests were an example of the “mafia-type” activities of many mining communities nationally and called on the South Africa government to help quell the disruption.

Responding to Februarie, Smart said that of the R500m referred to only about R230m was spent, mostly on exploration drilling, mine safety, and underground access. “These are technically challenging tasks very few companies in the world can execute safely in the time that we did,” he said.

Smart told Moneyweb that the rest of the R500m was spent on acquisition costs, corporate services (such as feasibility studies, legal and audit services), and financing costs.

South Africa is currently experiencing a fresh wave of violent protest following the imprisonment of its former president, Jacob Zuma. Scores of people in KwaZulu-Natal (KZN) and Gauteng have been arrested on Friday and over the weekend for looting and violent protests.

Richards Bay Minerals, a company controlled by Rio Tinto, shut its KZN mine on June 30, saying it wasn’t safe to keep it operating amid recent vandalism to mine property perpetrated by community members. Its MD Werner Duvenhage said today that the mine would not reopen until “fundamental milestones” had been reached in an agreement between local government and community bodies.