[miningmx.com] — AS A new legal battle over silicosis-related claims against Anglo American is set to start in London, analysts say it’s too early to determine whether there will be any future liability costs for South Africa’s mining houses.
Law firm Leigh Day & Co said on Wednesday it has begun proceedings in the London High Court against Anglo American SA on behalf of 450 individual claimants, as well as a representative class of unnamed black miners, who allege they are suffering from silicosis and tuberculosis, caused by exposure to dangerous levels of dust at the company’s former gold mines.
“The claim is potentially worth hundreds of millions of pounds,’ the law firm said in a statement.
Leigh Day & Co has also been working since 2004 on behalf of 18 former President Steyn mine workers on similar claims, presently ongoing in the Johannesburg High Court. The firm said that by bringing the new case in the UK would be in the victims’ interest, as the proceedings there would be speedier. It was also hoping on a settlement scheme with Anglo “at an early stage’.
Anglo American was South Africa’s largest gold miner during the 1900’s, prior to moving its head office to London in 1998 and divesting from gold in 2009.
Richard Meeran, partner at Leigh Day & Co, said there were striking similarities between the circumstances of this case and an earlier ruling on asbestos workers, where UK multinational Cape PLC in March 2003 agreed to pay £7.5m in compensation to 7,500 employees and Gencor agreed to set up a trust fund worth £37.5m for its workers.
In an unrelated matter, South African lawyer Richard Spoor is putting a class action together, following a Constitutional Court ruling in March that former mineworker Thembekile Mankayi was permitted to sue AngloGold Ashanti for damages if the employer had failed to provide a safe and healthy work environment.
LIMITED RISK
Commenting on the effect of the legal suits on the valuation of gold and other mining shares, the Johannesburg-based analysts of a major equities group said the proceedings would involve “very protracted court cases taking many years’ to finalise.
They said it was impossible to quantify any future liabilities, given the uncertainty over whether these claims would succeed, the length of court proceedings as well as the damages awarded to claimants.
“We do not factor in any liability at this stage,’ one of the analysts said. “If you want to buy gold shares now to take advantage of the gold price, this will have no effect.’
Imara SP Reid mining analyst Stephan Meintjes holds a similar view. “You can never say never, but at this stage it (the risk) is not sufficient not to be buying gold shares’.
However, in a report published in May on the Mankayi case, analysts at RBC Capital said “the risk of this becoming something very serious should.not be ignored’.
At the time, AngloGold Ashanti said the company would defend the Mankayi case and any subsequent claims.
“Should other individuals or groups lodge similar claims, these too would be defended by the company and adjudicated by the courts on their merits,’ read a recent company report. “In view of the limitation of current information for the accurate estimation of a possible liability, no reliable estimate can be made for this possible litigation.’
