Oversight Report on the visit to harmony gold mine: finalisation

NCOP Economic and Business Development

10 August 2009
Chairperson: Mr F Adams (ANC, Western Cape)
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Meeting Summary

The Committee adopted the draft minutes of proceedings held on 7 July 2007 and discussed changes to the Committee Programme for the period June to September 2009.  A briefing by the Department of Minerals and Energy on 18 August 2009 and a briefing by the Minister of Minerals and energy on 25 August 2009 were included in the Committee Programme.  Members from the Northern Cape Province requested that the Committee conducted oversight visits to that province to assess the effects of imminent mine closures in two mining communities in the Northern Cape.

Members then discussed the Committee’s draft report on the oversight visit undertaken to Harmony Gold Mine on 19 June 2009.  The visit resulted from the incident on 1 June 2009, when the bodies of 87 illegal miners were discovered at Harmony’s Eland Shaft.  Members debated the advisability of including the Committee’s suspicion that mine management was involved in illegal mining activities in the report.  A suggestion that the participation of all potential parties was investigated by the State security agencies was adopted.  Suggestions that the Committee was briefed by the Department of Minerals and Energy on the new and amended legislation required to deal with illegal mining activity were agreed to.

Meeting report

Other Committee Matters
The Committee adopted the draft minutes of proceedings on 7 July 2009.  The Chairperson took Members through the amended draft programme of the Committee for the period June to September 2009.  On 18 August 2009, the Department of Minerals and Energy (DME) will brief the Committee on the Department’s strategic plan for 2009/10 to 2011/12 and comment on the Committee’s oversight report on the visit to Harmony mine.  On 25 August 2009, the Minister of Minerals and Energy will brief the Committee on recent shortages of aviation fuel experienced in the country.

Mr K Sinclair (Northern Cape, COPE) suggested that the Committee included oversight visits to the Northern Cape in the Committee programme.  He reported that mines at Kleinsee and Kathu in the Northern Cape Province were being closed and he was concerned that the communities involved will be adversely affected by the closures.  Mine owners generally did not keep the promises made to rehabilitate the closed mines and to the mining communities.  The mining companies had maintained the infrastructure of the towns in the past and now wanted to hand over responsibility to the local Governments concerned.

Mr J Gunda (Northern Cape, ID) was concerned over the continued high levels of poverty in mining communities and said that few persons benefited from outsourced contracts from mining companies.

Mr B Mnguni (Free State, ANC) remarked that mines had only developed social responsibility programmes in the 1980’s.  He was concerned over the extent of environmental degradation caused by mining activities, slimes dams, the pollution of soil and water resources and the risk of radiation from uranium.  More input from the mining companies on the issue of rehabilitation of mining areas was required.

Ms E van Lingen (Eastern Cape, DA) reported that illegal coal mining was taking place where the mining company had no water permit from the Department of Water Affairs and Forestry (DWAF).

The Chairperson said that Members’ concerns will be raised with the DME in the meeting scheduled for 18 August 2009.

Mr Gunda wanted to know how a mine was bought.  He was aware of three mines being offered for sale and was approached by potential purchases on the process to be followed.

The Chairperson suggested that the IDC, National Energy Fund (NEF) and the Department of Trade and Industry were approached.

The Chairperson shared Members’ concerns over mining communities left destitute after mine closures.  He cited the example of Hondeklipbaai, where a privately-owned mine was closed but Government was blamed by the community.  He said that the Committee needed to obtain approval for the proposed oversight visit and asked the Members from the Northern Cape to submit an itinerary for a two or three day visit.  The most opportune time would be from 2nd to 4th September 2009.

Mr Sinclair commented that many mines did not adhere to the Environmental Impact Assessments (EIA’s).  Different issues affected the mining communities at Kleinsee (owned by De Beers) and at Kathu (owned by Kumba).

Ms S Chen (Gauteng, DA) asked that relevant background material was circulated to Members prior to the oversight visit.

Mr Gunda offered to obtain documentation.  The Chairperson undertook to request the Parliamentary Research department to provide background material.

Finalisation of oversight report on visit to Harmony Gold Mine
The Chairperson requested comment from the Members on the draft oversight report on the Committee’s visit to the Harmony Gold Mine in June 2009 (see attached document).

Mr Mnguni requested that the names of two persons from the Thabong police station were included in the list of participants.

The Chairperson suggested that the report was amended to state “South African Police Service” instead of “Thabong Police Station”.

Ms Van Lingen asked that the syntax under point 4.1 (page 2 of the report) was corrected to read “The Committee was provided with a breakdown …..”.

Mr Gunda asked that the amount under point 4.2 (page 3 of the report) was corrected to “R2 230 522.55”.

Mr Sinclair suggested that point 6.3 (page 5 of the report) was amended to include reference to the suspicion raised by the Committee that the internal market for illegal gold was created by persons in the formal sector.

Mr Mnguni said that the Committee only suspected such involvement.

The Chairperson commented that the National Union of Mine Workers (NUM) suspected the involvement of mine management in illegal mining activities.

Ms Van Lingen doubted that persons at mine manager level had the funds to create a market for illegal gold.

The Chairperson said that the Committee could only raise a suspicion.

Mr Sinclair remarked that the mining company can be expected to deny any involvement.  He was aware of allegations that the underground fire at the Eland shaft of the Harmony mine was started by members of NUM because the illegal miners posed a threat to the legal miners.

Mr Mnguni said that the bodies of the deceased illegal miners were brought to the Harmony station as that was the only way the surviving illegal miners could have the bodies brought to the surface.  The mining company was primarily responsible for the health and safety of the mine employees and had no choice but to bring the bodies to the surface as they posed a health threat to the mine workers.

Ms Van Lingen referred to the threatening letters sent to the mine management by the illegal miners.  She said that there appeared to be a line of communication between the illegal miners and mine management.

Mr Mnguni commented that the illegal miners posed a real threat to the mine as they were able to create havoc underground.

The Chairperson said that the mining company was responsible for the safety of the legal mine workers in the first instance and it was understandable that the mining company could bow to pressure and threats from the illegal miners.  He felt that the Committee needed to include a suspicion in the report that the mining company could be involved in illegal mining activities.

Mr Gunda wondered if the Committee could get into trouble for making such a statement.

The Chairperson asked where the mine workers obtained the substantial amounts of money found on them.  He thought that there must be high flyers involved.

Mr Mnguni pointed out that there were several different mine owners in the Welkom mining region.  The network of underground tunnels was very complex and illegal miners needed to have expert knowledge on where to find mineable ore in areas where active mining was not underway.

Ms Van Lingen said that the loss of R10 billion as a result of illegal mining had a major impact on the loss of jobs and tax revenue from the mining industry.

The Chairperson, Mr Sinclair and Ms Chen debated whether the phrasing of the report adequately covered the Committee’s concerns and suspicions.

Dr E Conroy (Researcher, Office of the Chief Whip of the ANC) cautioned against including a strong statement on the issue and pointed out that mine owners were also shareholders in the mining company and were unlikely to jeopardize the company by being involved in illegal mining.

The Chairperson remarked that illegal mining activity could reduce the value of a mine, making it more attractive to potential purchasers.

Mr Gunda suggested that the National Intelligence Agency (NIA) investigated illegal mining participation.

Ms Van Lingen suggested that a further recommendation to investigate all potential participants in illegal mining activity was included under point 8 of the report.

The Chairperson said that the DME would be commenting on the report on 18th August 2009 and report to the Committee on what action had been taken to curb illegal mining.  He suggested that the draft report was not amended until after the comment from the DME had been heard.  He said that the task team appointed by the Minister was expected to report to the Committee on the progress made to date.

Mr Mnguni and Mr Sinclair supported the Chairperson’s suggestion.  Mr Sinclair suggested that the Committee requested the State Security Agencies to investigate the involvement of all possible participants in illegal mining activities.  With regard to the Committee’s recommendation under point 8.4, he pointed out that SAPS can only make an arrest after an investigation had taken place.

The Chairperson suggested that the recommendation was amended to read “all State Security Agencies continued to investigate all possible role players”.

Ms Van Lingen was unsure of what was meant by the phrase “in a 33 km line through other shafts” under point 7 (page 7 of the report).  She understood that a distance of 33 km stretched from the point where the illegal miners entered the mine to where the bodies were found.

Mr Mnguni confirmed that Ms Van Lingen’s interpretation was correct.

Mr Sinclair asked if the Committee should not be more specific in the recommendations made.  He felt that the recommendations made to tighten laws (points 8.2 and 8.10) were too vague.

Ms Van Lingen asked if any of the recommendations would in fact stop illegal mining from occurring.

The Chairperson agreed that the provisions in the Mine Health and Safety Act and the Minerals and Petroleum Resources Act did not include illegal mining in particular.  He suggested that the Committee obtained the recommendations from the DME on the legislative changes required.  He said that SAPS applied other laws to deal with illegal mining activities.  He suggested that recommendation 8.2 was changed to read “all relevant legislation”.

Mr Mnguni felt that recommendations 8.2 and 8.10 referred to the same matter.  The Chairperson agreed that the two recommendations could be combined into one.

Mr Sinclair suggested that the DME briefed the Committee on the applicable legislative framework.  He suggested that the recommendation under point 8.5 (that licensed gold dealers kept a register of buyers and sellers) was included in recommendations for other legislative changes.

Dr Conroy said that it would be difficult to enforce such a legal requirement.

Mr Sinclair replied that a legal requirement can only be enforced if legislated in the first place.  Current legislation was not appropriate or adequate and he proposed that the DME briefed the Committee on what new legislation and other legislative changes were necessary.

The Chairperson agreed that it should be a legal requirement for gold dealers to keep records.

Mr Mnguni pointed out that existing legislation made provision for the handling of unwrought gold.

Dr Conroy suggested that the DME advised the Committee on legislative changes required.

Ms Van Lingen asked if a date could be printed on the draft Committee Programme to allow Members to ascertain the latest version.

The Chairperson replied that the draft programme reflected the applicable period.

The meeting was adjourned.


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