The Directorate for Priority Crime Investigation (DPCI) reported that illegal mining incidents occur on both the East and West Rand of Gauteng, with most incidents occurring at the Grootvlei, Anglo-Gold Ashanti, Sibanye and Kusasalethu gold mines, as well as in the Roodepoort, Benoni and Florida areas. In Kwazulu-Natal, illegal gold mining has been reported in the Klipwal, Pongola and Hammarsdale areas. In the Northern Cape, illegal diamond mining activities are dispersed widely throughout the province, including the De Beers and Tweepad sites. In Mpumalanga, illegal mining activities are concentrated around the Barberton area. Since 2016, the illegal mining of chrome had emerged in the area between Atok and Steelpoort in Limpopo. DPCI reported that the majority of illegal mining incidents take place in gold mines, particularly the Harmony gold mines in the Free State and the Sibanye gold mines in Gauteng.
DPCI explained the illicit value chain: illegal miners on the ground report to gangs and illegal mining “bosses”, who in turn liaise with bulk buyers who are generally licence/permit-holders. The bulk buyers - often front companies - collude with organized crime syndicates to “clean” illicit and stolen products for export purpose. This is achieved by mixing stolen high-grade material with low-grade material to conceal its nature and source. The bulk buyers then collaborate with front-company exporters in South Africa, who thereafter send the minerals to refineries and intermediary companies operating outside the country. The weakening of the ZAR from December 2016 and a 20% increase in the international price of gold pushed the black market value of gold up to around R420 per gram, increasing the incentive for illegal miners and others within the illicit value chain.
DPCI noted that the practice has inter-linkages with other organized crime which include human smuggling and trafficking, money laundering, illegal weapons and explosives, violent crime, environmental degradation, the illicit economy, transnational organized crime, customs offences and tax evasion. Moreover, instances of collusion by mine security and the South African Police Service have been identified by DPCI.
DPCI reported that several successful projects to disrupt illegal mining operations had been conducted in recent years, including Project Masimong (2012), Project Tarantula (2013-14), Project Darling (2011-2014), and Project Spoc (2015). These projects resulted in a significant number of arrests, as well as substantial seizures of stolen minerals. DPCI conducted 114 disruptive operations and made 210 arrests in 2016/17, reflecting a significant decrease from the 60 disruptive operations and 1830 arrests made in 2015/16. In 2016/17, there were gold seizures worth R61 616 324, diamond seizures worth R272 675, and platinum seizures worth R1 601 090. During the same period gold mines reported losses of R5 965 943, while platinum mines reported losses of R5 451 968.
The major challenges of illegal mining as noted by the Department of Mineral Resources were underground ventilation disruptions, compromised mine and surface infrastructure, environmental degradation, health and safety concerns, loss of revenue, the continuous re-opening of sealed shafts, legitimate mining operations being taken over by armed illegal miners, the exploitation of women and children, theft of copper and steel, and high levels of unemployment in mining areas. In addressing unemployment, DMR reported job creation in Matholesville (20), Sol Plaatjies (45), Sallies (45), Fleurhof (20), Daggafontein (100). Around 300 long-term contracts on rehabilitation sites have been also been secured.
DPCI reported that the latest emerging trend was for illegal miners to swallow amalgam wrapped in condoms so as not to be detected by mine security or rival mining gangs. The amalgam was a mixture of mercury and gold concentrate, highlighting the danger of this practice.
Considering the prevalence of illegal mining across South Africa, several opposition MPs suggested that perhaps someone in a position of power had a vested interest in the continuation of illegal mining. DPCI conceded that instances of collusion and corruption have been exposed, however the extent to which high-level corruption facilitates it remains unclear. Upon the request of several members, DMR estimated that the value of South Africa’s remaining mineral resources was around $2.5 trillion (R162 trillion). Much of this value resides in the Bushveld Igneous Complex, primarily in the form of platinum group metals.
The Committees recommended further discussions on illegal mining with a wider complement of stakeholders, as it was clear that it constituted a threat to national security.
Mr F Beukman (ANC) stated that illegal mining was complex, thus necessitating the participation of various stakeholders, including government, trade unions and the mining industry. Illegal mining had been identified as a national threat, as well as a national intelligence priority and was being addressed by the National Coordination and Strategic Management Team (NCSMT), led by the Directorate for Priority Crime Investigation (DPCI).
Directorate for Priority Crime Investigation on illegal mining
Brigadier Ebrahim Kadwa, Hawks Section Head: Organized Crime (Operations) stated that DPCI’s illegal mining projects stemmed from the 2009/10 National Intelligence Estimate that identified the illicit economy as a threat and a National Intelligence Priority. Following the Inter-Ministerial Security Committee directive in March 2010, the Multi-Agency NCSMT was established on 24 June 2010.
On the scope and impact of illicit mining, the practice has inter-linkages with other organized crime, impacting various sectors. These include human smuggling and trafficking, money laundering, illegal weapons and explosives, violent crime, environmental degradation, the illicit economy, transnational organized crime, customs offences and tax evasion. Illegal mining has a broad impact on South Africa’s national security as the country’s infrastructure, territorial integrity, authority of the state, economic security, safety and security and South Africa’s reputation/image were under threat.
In terms of infrastructure, the theft of copper and other scrap metals from both operational and derelict sites undermines the maintenance and development of improved infrastructure. In terms of territorial integrity, the diversion of water meant for residential use negatively impacts on the provision of water and thus the social stability of surrounding communities. In terms of undermining the authority of the state, proliferation in the number of illegal foreign nationals involved in illegal mining has created “no-go” spaces both underground and on the surface in their quest to monopolize the illegal mining space. In terms of economic security, the fleecing of precious metals, revenue losses and the illicit economy threaten South Africa’s Gross Domestic Product (GDP) growth goals. In terms of safety and security, violent crimes, the safety of mines and water contamination present major threats. Lastly, in terms of the impact of illegal mining on South Africa’s reputation/image, corruption and the erosion of the rule of law can negatively impact investor confidence.
Brig Kadwa explained the illicit value chain: illegal miners on the ground report to gangs and illegal mining “bosses”, who in turn liaise with bulk buyers who are generally licence/permit-holders. The bulk buyers - often front companies - collude with organized crime syndicates to “clean” illicit and stolen products for export purpose. This is achieved by mixing stolen high-grade material with low-grade material to conceal its nature and source. The bulk buyers then collaborate with front-company exporters in South Africa, who thereafter send the minerals to refineries and intermediary companies operating outside the country.
DPCI reported that illegal mining activities persist in the Gauteng, Mpumalanga, Free State and Northern Cape Provinces, while similar operations have become evident in Kwazulu-Natal. DPCI have recently become aware of the illegal mining of chrome in Limpopo. The majority of illegal mining incidents take place in gold mines, particularly the Harmony gold mines in the Free State and the Sibanye gold mines in Gauteng.
DPCI reported that stolen high-grade material is often mixed with low-grade material to conceal its nature and source. This is achieved through front-companies colluding with organized crime syndicates to “clean” illicit and stolen products for export purposes. The weakening of the ZAR from December 2016 and a 20% increase in the international price of gold pushed the black market value of gold up to around R420 per gram, increasing the incentive for illegal miners and others within the illicit value chain.
The practice of illicit mining is supported by an elaborate illicit system, including human trafficking/smuggling, food supply, money laundering and illegal firearms. Due to the high unemployment rates in mining communities, these illicit activities appeal to many unemployed people. the targeting and incursion onto operational mines has increased, specifically in the Free State Harmony gold mines. Despite counter-measures to close and rehabilitate derelict shafts, these operations have not prevented access to these sites entirely due to mine architecture characterized by inter-linked shafts.
In 2016/17 on gold mines: theft/possession of stolen copper accounted for 543 incidents; underground illegal mining - 551 incidents; theft/possession of gold-bearing material - 360 incidents; illegal surface mining - 191 incidents; and contravention of the Explosives Act - 71 incidents. On platinum mines in 2016/17, theft/possession of stolen copper accounted for 574 incidents; theft/possession of platinum-group metals - 99 incidents; and contravention of the Explosives Act - 6 incidents. As a consequence of these incidents, gold mines reported losses of R5 965 943, while platinum mines reported losses of R5 451 968 for 2016/17.
Since 2016, the illegal mining of chrome had emerged in the area between Atok and Steelpoort in Limpopo. As chromium reserves generally lay on the surface, the process was relatively easy. Many of these illegal miners were unemployed youths and elderly women working in harsh conditions without appropriate tools.
Illegal mining incidents occur on both the East and West Rand of Gauteng, with most incidents occurring at the Grootvlei, Anglo-Gold Ashanti, Sibanye and Kusasalethu gold mines, as well as in the Roodepoort, Benoni and Florida areas. In Kwazulu-Natal, incidents of illegal gold mining have been reported around the Klipwal, Pongola and Hammarsdale areas. In the Northern Cape, illegal diamond mining activities are dispersed widely within the province, including the De Beers and Tweepad sites. In Mpumalanga, illegal mining activities are concentrated around the Barberton area.
On NCSMT’s operational interventions to mitigate the threat of illegal mining, Brig Kadwa reported that there were interventions across all levels of the value chain by various stakeholders. These interventions include compliance audits and inspections of licence-holders; visible policing; joint and disruptive operations; Prevention of Organized Crime Act (POCA), SARS and Financial Intelligence Centre (FIC) investigations; and mutual legal assistance with countries abroad.
On international strategy, Brig Kadwa stated that there was no International Regulatory Framework in place to address the international buyer’s market. However, in partnership with the Russian Federation, South Africa tabled a Resolution at the 2013 United Nations Commission on Crime Prevention and Criminal Justice (UN-CCPCJ) meeting. This resolution was passed, mandating the UN Interregional Crime and Justice Research Institute (UNICRI) to conduct a global study, funded by South Africa. The findings of this study were tabled at the 25th session of the UN-CCPCJ in May 2016.
Brig Kadwa stressed the importance of the private sector in coordinating efforts to improve the security of mines and the precious metals supply chain. The private sector had been involved in all provincial and national structures established to deal with illegal mining.
DPCI conducted 114 disruptive operations and made 210 arrests in 2016/17, reflecting a significant decrease from the 60 disruptive operations and 1830 arrests in 2015/16. DPCI reported gold seizures worth R61,616,324, diamond seizures worth R272,675, and platinum seizures worth R1,601,090 in 2016/17.
DPCI reported that several successful projects to disrupt illegal mining operations had been conducted in recent years, including project Masimong (2012), Project Tarantula (2013-14), Project Darling 2011-2014), and Project Spoc (2015). These projects resulted in a significant number of arrests, as well as substantial seizures of stolen minerals. The latest emerging trend was for illegal miners to swallow amalgam wrapped in condoms so as not to be detected by mine security and SAPS. Amalgam was a mixture of mercury and gold concentrate, so it was a dangerous practice.
DPCI’s constraints in combatting illegal mining were identified as corruption within the criminal justice system, the oversupply of illegal immigrants, and the persistence of derelict and ownerless mines.
Department of Mineral Resources (DMR) on illegal mining challenges
Mr David Msiza, DMR Chief Inspector of Mines, commended the good work done by DPCI in addressing the threat of illegal mining. However there was still much work to be done to eradicate this.
He noted that illegal mining has become increasingly prominent since 2008, primarily in the Free State, Gauteng, Mpumalanga, North-West and Northern Cape Provinces. More recently, illegal gold mining has been reported near Tzaneen and Giyani in Limpopo, as well as the illegal removal of chrome in Limpopo. These operations are conducted both on the surface and underground. Many of the sites targeted for illegal mining are derelict, ownerless mines decommissioned during the 1950s.
National and international organized crime syndicates were targeting the mining sector, specifically old and derelict mining sites, but also some operational sites. These criminal elements are highly organized, motivated by self-enrichment, and their activities fell within the POCA framework. Unemployment of miners as a result of the liquidation of formal mines drove them to the illicit sector.
Mr Msiza noted that many of the sites owned by Harmony in the Free State had been mined by large mining corporations in the 1980s, and subsequently sold to smaller mining companies following the depletion of their reserves. Many of these shafts have inter-linked passageways, complicating the process of sealing-off and blocking entry points to these sites. In the Klerksdorp area in the North-West, many of the old mines operated by Anglo-Gold Ashanti pose challenges for scavenging and breaking-down of mine infrastructure. Illegal miners generally target shallow mines in the absence of resources to conduct ultra-deep mining operations.
In Gauteng, Mr Msiza noted the prevalence of gold dumps amongst city infrastructure. Many of these sites were ownerless and derelict mines, particularly in the Benoni and Roodepoort areas. As these mines are generally shallow, illegal miners are mining the outcrops themselves, as well as breaking down the concrete slabs used to seal old, derelict shafts to go underground. The most obvious symptom of this practice is the creation of sinkholes and the cracking of roads in these areas. In Mpumalanga, the gold mines in the Barberton area differed from other areas as the gold lay in massive ore deposits, as opposed to thin reefs.
Mr Msiza noted that there was a changing modus operandi in illegal mining in South Africa. This every time progress is made in mitigating illegal mining in one area, more operations emerge in other areas. Sand mining has also increased dramatically in recent years.
Mr Msiza made reference to the Bushveld Igneous Complex overlapping Gauteng, North West and Mpumalanga – a rare geological formation that holds both gold and chrome. Within the Bushveld Complex, surface outcrops of gold and chrome provide relatively easy targets for prospective illegal miners. Platinum was significantly more difficult to mine illegally, and mostly involved the acquisition of platinum at the processing stage and copper theft from platinum mining sites.
Strategic interventions by DMR were the rehabilitation of derelict and ownerless mines as well as the sealing of open holes/shafts; encouraging mining companies to apply and conduct legitimate mining on outcrop and sub-outcrop areas; enhancing small-scale mining opportunities and joint-venture partnerships; facilitating the treatment and processing of minerals; and encouraging land-use in areas affected by illegal mining activities.
DMR has interacted with stakeholder illegal mining forums, the Gauteng and Limpopo Executive Council MECs, illegal mining seminars, mining companies, mining communities and civil society, as well as traditional and tribal authorities. In addressing unemployment, DMR reported job creation in Matholesville (20), Sol Plaatjies (45), Sallies (45), Fleurhof (20), Daggafontein (100). Around 300 long-term contracts on rehabilitation sites have been also been secured.
DMR noted the following challenges in combatting illegal mining: underground ventilation disruptions, compromised mine and surface infrastructure, environmental degradation, health and safety concerns, loss of revenue, the continuous re-opening of sealed shafts, legitimate mining operations being taken over by armed illegal miners, the exploitation of women and children, theft of copper and steel, and unemployment, and illegal use of water and electricity.
DMR conducted a seminar in March 2017 where various stakeholders – including law enforcement, civil society, mining companies and trade unions - were invited to share perspectives and identify the challenges in illegal mining. Public-Private Partnerships (PPPs) were very important and the issuing of mining rights to small-scale miners. DMR should continually look for viable areas for formal extraction by the small, medium and micro enterprise sector (SMME) sector of South Africa. Areas identified by DMR include the Springs, Roodepoort, Florida, Benoni and Limpopo. Cooperative ventures with mining companies have proven successful in reducing illegal mining in Pongola, Kwazulu-Natal, and such projects have the potential to do the same in Limpopo and Gauteng.
Mr S Luzipho (ANC), Chairperson of the Mining Portfolio Committee, thanked DPCI and DMR. It was clear that there was much to be done in addressing illegal mining, and it would perhaps require more than just the two committees. Mr Luzipho suggested that MPs limit their questions to three per MP, given the large attendance at the joint meeting.
Mr J Lorimer (DA) stated that in March 2017, the Sibanye Mining company, which by employment was the largest mining company in South Africa, estimated that the loss to the state and mining companies was around R20 billion per year. Is that the correct figure? In terms of the use of women and children in illegal chrome mining, is the use of heavy machinery generally prevalent in these instances? Has any heavy machinery been seized? Has SAPS – including police intelligence - been allocated sufficient resources?
Mr M Jafta (AIC) appreciated the inter-departmental efforts to combat illegal mining. However, the problem appears to be escalating. What does DPCI need to improve to make its measures more effective? On the illegal mining of chrome on the reef surface, why is it so difficult for SAPS to disrupt these operations? What do the illegal sand miners do with the stolen sand?
Mr S Mhlongo (EFF) argued that the challenge of illegal mining could not be understated, particularly in the midst of scandals involving the Minister of Mineral Resources and the Gupta family, as well as the state of the economy. He made reference to section 24(3), (4) and (5) of the Constitution of the Republic: “to prevent pollution and ecological degradation; promote conservation; and secure ecologically sustainable development and use of natural resources while promoting justifiable economic and social development.” Mr Mhlongo asked DMR whether there was a monetary figure for the amount of natural resources left in South Africa? What training initiatives has the DMR established over the last 20 years to provide skills at the ground level? He said the "reason Europe is better is because they [de Beers] stole South Africa’s resources”. Countries like France fortified their own nuclear capabilities using African resources. Mr Mhlongo stated that this had happened because African leaders had been complacent to it. The Minister of Mineral Resources and the Gupta family have a strategic mission to loot the country. He expressed his concern over the situation, warning that once South Africa reaches the point of no return, similar situations have sparked wars if managed improperly.
Mr Luzipho stated that the delegates answer only questions on the performance of their entities for now.
Mr Z Mbhele (DA) said the financial incentives offered to criminal syndicates meant that that they were often strategic and well-resourced. This is complicated by the impact of collusion in the illicit value-chain. Is there sufficient capacity and skills to eradicate the phenomenon of illegal mining, as opposed to merely displacing it? Is SAPS crime intelligence “up to scratch” in capacity and skills? He was surprised to read of the acting-appointment of Major-General Mokushane to oversee SAPS crime intelligence. Was there political interference involved in this? Is there perhaps somebody in government or the corporate sphere with a vested interest in sustaining the illicit economy? He noted that multi-bodied government entities were historically not very successful. He made reference to the recent poor performance of the Border Control Operational Coordinating Committee (BCOCC). If illegal mining is an identified national priority, has the feasibility and viability of a specialized entity been considered? If a feasibility study has not been done, why not? The risk of collusion was multi-faceted, particularly the role of cash-in-transit trucks, mine demolition companies and mine employees in facilitating the process. Has there been any detection from food retailers on food supply networks for illegal mining gangs? Does DPCI know of any instances where state-issued firearms have been used by illegal miners?
Ms P Mmola (ANC) asked DMR when does it become evident that a supposedly unused mine is being mined? She asked DPCI if there had been any corruption cases linked to the training of small scale miners?
Mr L Ramatlakane (ANC) said both presentations highlight the importance of the African Union Agenda for 2063. Foreign nationals were moving into the illegal mining space and this meant the foresight in the AU policy agenda was correct. He suggested that some of the points raised by Mr Mhlongo were perhaps more appropriate for a separate discussion. He asked if the two Portfolio Committees would be sufficient in dealing with the broad challenge of illegal mining, and that perhaps other committees could provide some insight. He approved of the solution-orientated plan to introduce small-scale miners in reactivating activities. He requested insight as to the regulatory process of converting an illegal operation into a legal one. On the “territorial expansion of illegal operations”, is this statement relevant only to foreign nationals? Does DPCI have the resources to properly investigate collusion and corruption?
Mr I Pikinini (ANC) said they should consider how the current illegal mining came about historically. Under the previous regime, the rehabilitation and sealing of mines was not common practice, however under the current regime, this practice is in fact legislated. He suggested involving the Portfolio Committee on Justice and Correctional Services to discuss illegal mining arrests. When miners receive mining rights, there should be an agreement to leave the land in the condition in which it was found. He asked if further legislation was needed to fill the gaps in law.
Mr H Schmidt (DA) noted that it seemed as though there was some kind of policy direction being taken despite the absence of any formal policy to regulate small-scale mining. The category exists but it is not legislated. Small-scale mining is not acknowledged specifically as a principle in the Mineral and Petroleum Resources Development Act (MPRDA). What is the DMR’s view on artisanal mining and formal mining? He warned that there was a specific sub-category developing where one can practice as a small-scale miner but not comply with the MPRDA. Does the Act need to be amended? Does the DMR know the fatality and injury figures for illegal mining? Is the figure higher than fatalities in the formal sector? Mr Schmidt noted that there were around 20 000 to 30 000 illegal mining operations in the Free State alone. He argued that formal sector job creation do not come close to matching the number of illegal mining opportunities. For this reason, DMR must consider formalizing small-scale mining as a practice. Why do the police not spot the surface mining of chrome in Limpopo? Chrome was being exported in broad daylight across the border to Mozambique. How is this possible? Does someone somewhere have a vested interest in these kinds of activities continuing?
Mr F Beukman (ANC), Co-Chairperson, made reference to the 2016 United Nations report on illicit mining in South Africa, specifically that the report identified five jurisdictions that might be involved in ‘level five’ of the illicit value chain – the export/end destination of the minerals. Does DPCI have the cooperation of these countries? What other support does DPCI need? Much of the work that goes to the police stems from non-compliance by mines. What measures are there in place to permanently seal-off and close down mines? Is there cooperation from the owners of derelict mines?
Mr S Luzipho (ANC), Co-Chairperson, noted that the presentations dealt adequately on the regulatory framework in place to combat illegal mining, however there was little information on the crisis of illegal mining historically. Borrowing from Mr Pikinini’s point, he noted that historically there was no legislation regulating the preservation of mining areas. A report on the Harmony mine in the Free State stated that every second day, recovery teams go underground to recover the bodies of dead illegal miners. Sometimes these recovery teams have brought up to eight bodies per day to the surface. The highest loss of life is in the Barberton area. DMR had been asked to conduct an assessment on the amount required to seal and rehabilitate all derelict and ownerless mines in the country and the figure was around R60 billion. However the Portfolio Committee on Mineral Resources had not seen what scientific method had been used to arrive at that figure. Corruption in relation to illegal mining was a fact, and should not be hidden or ignored. To this extent, SAPS cannot exclude itself from the discussion of corruption. A SAPS member was recently arrested in Sao Paulo International Airport in Brazil attempting to smuggle six bricks of cocaine. He referred to two men arrested in Kempton Park with illegal gold worth R200 million, which shows the lucrative nature of the illegal mining industry. The problem is not only illegal miners on the ground but also the large international market for stolen minerals. With this considered, it would be impossible to come up with all the answers in one meeting.
Adv Thabo Mokoena, DMR Director General, noted the importance of educating people on the MPRDA and DMR had the cooperation of various stakeholders in this process. On measures to empower ordinary citizens, he noted that historically there was no clear legislation with specific direction on what DMR should be doing until the amended MPRDA came into effect. The Junior Miners programme represented a concerted effort by DMR to empower people to become successful in the formal mining space.
On the conversion of an illegal operation to a legal one, Adv Mokoena replied that the process was relatively complex due to legislative provisions. DRM is undergoing negotiations with mining companies for the release of some of their unused assets. However, a major issue was mining companies holding licences without actually mining. Once issued, these mining licences cannot be withdrawn unless there is sufficient reason. He would be attending a meeting with mine owners – including Samancor - later that day to discuss this.
On the absence of a policy on small-scale mining, Mr Mokoena stated that DMR had a clear strategy to promote small-scale mining, and would be happy to share it with the Portfolio Committee on Mineral Resources on request. On the confiscated trucks attempting to carry illegal chrome across the border, the hard work done by DMR and SAPS must be acknowledged. Both the Minister and Deputy Minister of Mineral Resources have visited the areas where chrome is mined illegally to engage with community members.
Mr Msiza conceded Mr Schmidt’s point on illegal mining fatalities, however forums around the country do report on known illegal mining fatalities. On prevention, DMR works together with the mines to rehabilitate and close derelict shafts. Many of the shafts are sealed off with concrete slabs. However, illegal miners will often dig tunnels underneath multiple layers of slabs, necessitating the need to fill shafts entirely. Many of the targeted sites were derelict and ownerless mines and DMR is working closely with Council for Geoscience to develop more creative and effective solutions. An earlier DMR practice was to mark sealed shafts to make them visible to the community. However this beaconing was exploited by the illegal miners who thereafter would tunnel into these shafts. Thus, DMR’s methodology must constantly be adapted.
On training and skills development, Mr Msiza replied that one of the primary objectives of the MPRDA was the transformation of the sector, while concurrently promoting skills development. Although progress has been made, there is still much left to be done. In terms of the Sector Education and Training Authority (SETA) system administered by the Department of Higher Education and Training, the “Mining SETA” is referred to as the Mining Qualifications Authority (MQA). In terms of the Skills Development Act, the relevant sector must utilize one percent of the wage bill for skills development initiatives, funding the SETA system. Mr Msiza argued that transformation of the sector without proper skills development would be disingenuous. With this considered, bursaries, leadership programmes and gender-equality programmes all assist in skills development as a continuous exercise.
Mr Luzipho reminded DMR about the question on the quantity of minerals left in South Africa.
Mr Msiza replied that the estimated value of South Africa’s remaining mineral resources was around $12.5 trillion. much of this value was stored in the Bushveld Igneous Complex in the form of Platinum Group metals, as well as the Waterberg area of Limpopo and in the Northern Cape. Mr Msiza stated that it would be necessary to do further work at the micro-level to ascertain whether specific sites were worthy of investment for extraction. In this regard, the DMR works closely with the Council for Geoscience for geo-physical mapping and general assistance in terms of the minerals. Mr Msiza suggested that the Council for Geoscience be given an opportunity to report on some of the positive work done in this regard.
Lieutenant-General Yolisa Matakata, Acting National Head of DPCI, addressed concerns about the capacity of DPCI to deal with the threat of illegal mining. DPCI did have the capacity to specialize, however because illegal mining had inter-linkages with other forms of organized crime, a multi-skilled team equipped with the necessary resources would be needed to properly address it in its entirety.
Brig Kadwa stated that illegal mining was not unique to South Africa, as similar practices are visible in the rest of Africa as well as in South America. According to some reports, the diversification into illicit mining in South America has surpassed cocaine trafficking in profitability. The international criminal market extends as far as Europe, USA, Dubai and India – the latter being the largest consumer of gold in the world. For this reason, it would be necessary to get the global community to provide law enforcement support. Many countries see illegal mining as merely a “customs issue”, rather than an organized crime activity.
On DPCI’s international strategy, Brig Kadwa replied that the first step would be to get the UN General Committee to acknowledge illegal metals trafficking, as these metals often end up in refineries in the United Kingdom, Canada and Switzerland. The mutual-legal assistance process was very cumbersome. However, through positive working relationships, DPCI had been able to finalize many of these mutual-legal systems. Once precious metal trafficking is recognized under the banner of transnational organized crime, then Interpol can include the practice on its list of priority areas and consequently this will have an effect on the international market. In terms of the UN Research Report funded by South Africa, South Africa has been a “trend-setter”, and many UN models have extracted lessons from the best working practices of the NCSMT. Contemporary organized crime necessitates that law enforcement conduct operations in a much more systematic and calculated fashion, including identifying legislative gaps and dysfunctions.
On DPCI intelligence, Brig Kadwa made reference to Operation Tarantula, stating that the operation was multi-faceted and took place over a number of years. One of the major challenges during the operation was the manner in which key players in the illegal mining industry position themselves through front companies, with permits and licences. For this reason, DPCI requires precise intelligence to deal with racketeering prosecutions, including assistance from the Financial Intelligence Centre, the Asset Forfeiture Unit and the National Prosecuting Authority. Much of the illicit trade is undertaken through sophisticated schemes by people who understand the industry. These schemes had various strategies to evade detection, including intermingling illegally mined gold with stolen jewelry, the road-tripping of gold between destinations to give the SAPS “the long chase”, and the VAT scheme, which defrauded SARS of “huge amounts of money.”
On the use of heavy machinery in illegal chrome mining in Limpopo, Brig Kadwa replied that the NCSMT had intensified operations in the area. In 2017, 42 people have been arrested, 22 trucks and 14 excavators have been seized, and huge quantities of chrome have been recovered. However, further operations were necessitated to deal with this. On the annual losses to state and business due to illegal mining, this was the first he had heard of the R20 billion estimation. In March 2017, it had been estimated that annual losses were around R6 billion, however there are no precise figures. What is important for law enforcement, is to disrupt, dismantle and neutralize the practice. Crime intelligence played a crucial role in all operations and internationally, the work done in South Africa is trend-setting. For this reason, it would be necessary to continue working side-by-side with relevant stakeholders and state security to deal with the issue.
On the role of foreign nationals, many of the illegal miners detected are immigrants from the Southern African Development Community (SADC) region. Others include local ex-miners who have been retrenched and subsequently move into the illegal sector as well as local unemployed persons from surrounding communities. To strengthen and intensif DPCI operations, DPCI had looked at extensive training to ensure better investigations, training and prosecutions. In the Free State, immense energy is being devoted into the systematic disruption of utilized premises, considering the “new diamond rush” taking place in the region. DPCI had made progress in choking off the food-supply chain to illegal miners to force them to the surface.
Brig Kadwa made reference to Project Masimong, wherein an entire parallel mining operation had been set up using the resources of the existing mine, including telecommunications, electrical and water supply. Moreover, the kingpin had actually lived on the premises for around two years. If that operation had not been successful, around R120 million worth of gold would have been taken from the site. He described the operation as “spectacular” in terms of the evidence collected to build the case against the illegal miners.
On the challenges faced by DPCI, he identified porous border posts, transnational organized crime and collusion as posing challenges to DPCI’s capacity. It was necessary for DPCI to conduct “well-guarded” operations to identify collusion, having the craft of trade to protect the confidentiality and integrity of the investigations. Entire shifts of guards have been prosecuted for involvement in illegal mining. On the question of state-issued firearms, Brig Kadwa stated that the use of police firearms was uncommon, however firearms in general are a popular tool in protecting turf, along with the booby-trapping of mine shafts. The seizure of stolen firearms accompanies most illegal mining arrests.
Mr Luzipho, Co-Chairperson, stated that it may be necessary to have further discussions with a wider network of stakeholders. It must be agreed that illegal mining is a national security concern. He suggested that the Committee allow the DMR and DPCI to deliberate on the points discussed and reconvene at a later date.
Mr Mhlongo stated that South Africa’s mineral resources would not last forever. Without the support of organized business, there is little that can be done to resolve illegal mining. In future meetings, it may be necessary to have buy-in from organized business to utilize their advice moving forward.
Mr Luzipho implored Mr Mhlongo to “say what he wants to say.”
Mr Mhlongo stated that South Africa is a very complex country. The EFF position is very clear on what needs to be done. He then seconded the Chairperson’s suggestion.
Mr Beukman, Co-Chairperson, thanked DPCI and DMR and the meeting was adjourned.
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