Aquarius silence could be damning

[] — JUST what is going on at Aquarius Platinum? Does even the company’s top management know? It would hardly seem so.

On Monday, the company made an official statement to the JSE and released through SENS claiming that its Marikana and Everest mines have passed the presidential safety audits conducted by the Department of Minerals & Energy (DME).

This was promptly denied by the DME which said firstly that though it had started legal audits at a few mines, it had not yet released any reports on the findings. It went on to add that the audit at Aquarius’s Marikana mine had to be suspended after officials who arrived there were told the entire staff had been fired for participating in illegal strike action.

In other words, not only had Aquarius not been give a clean bill of health, the audits have not even been completed, and statements to the contrary were “grossly irresponsible’.

Later in the week, a DME spokesman went even further, saying “safety problems’ had been identified at both Aquarius’s mines, and they were not “up to scratch.’

Now this is not just a difference of opinion, but a straight-forward factual conflict. Both parties simply can’t be right. And on the face of it, the DME’s credibility over a certification which only it can issue is greater than Aquarius’s.

So who gave Aquarius CEO Stuart Murray – who was directly quoted in the SENS release, so can’t claim not to have known about, or approved, it – apparently patently false information? And why did the parties concerned think they could get away with it?

The DME issued its rejoinder on Tuesday evening. So far there has been no attempt at a rebuttal, or even an explanation, from Aquarius.

The longer it stays shtum, the more guilty it appears. You may remember the standard line from UK TV crime series: “You do not have to say anything, but if you do not disclose something that may prove helpful to your defence, it may count against you in subsequent court proceedings’ – or words to that effect.

That’s a sound rule that can be applied to many situations, and is certainly valid here.

Mine safety has become a hot political issue, so it’s not surprising that the National Union of Mineworkers has taken the opportunity to get in on the act. It issued a statement this morning condemning Aquarius for “misleading the nation’ with its “false claim’.

Safety record in reverse

After four years of declining mortality, the number of mine deaths rose from 199 to 221 last year. The issue is thought to have been a key factor in the departure of Anglo Platinum CEO Ralph Havenstein last year, and is a perennial topic at mining company briefings and presentations.

There are two aspects to the problem: deteriorating safety records at some existing mines, and the growth – especially in the platinum mining industry – of new operators who, to be blunt, may lack the technical expertise that has developed over the decades at established producers. Despite the fuss over Aquarius, it’s actually the first trend that is basically the more worrying.

There are two possible explanations, which are not mutually exclusive: either, despite all the lip service paid to safety, managements are being pressured to cut costs with reference to the bottom line; or established mines are moving into more difficult working areas as the easy areas are being worked out.

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Neither of these will be easy to reverse, and while one must sympathise with the view that even one mining fatality is too many, I must again risk accusations of unfeeling inhumanity and point out that underground hard rock mining is inherently a dangerous undertaking.

No doubt it would be technically possible to introduce working practices that would eliminate the risk of mining fatalities, just as it would be technically possible to introduce measures to eliminate deaths from road traffic accidents. But in both cases the economy would simply grind to a halt.

The sad truth is that there is a risk:reward ratio in all such cases, and that while calls for zero fatalities are all very well, they’re simply impractical.

Having said that, let me try to redeem my reputation by saying that worsening safety records are flatly unacceptable, and that companies do neither themselves, the industry, or even the capitalist system any favours by making claims that can’t be sustained.