MAC: Mines and Communities

Africa Update

Published by MAC on 2007-01-04

Africa update

4 January 2007

As the New Year broke, Anglo American's most remunerative subsidiary, Anglo Platinum, continued to ignore community rights at one of its South African mines.

In December, a Kenyan court dismissed land claims by farmers which now appears to provide the final go-ahead to Tiomin's mineral sands excavations of Kwale.

Following revelations of Vedanta's hapless lack of environmental controls over pollution from the huge Konkola copper mine in Zambia, the Financial Times reveals that all is still far from well..

Robert Mugabe has announced a long-awaited new minerals law, designed to give "rights to locals." However, the move obviously doesn't include thousands of small-scale miners, desperately trying to eke out a living while the country's economy continues to founder.

The world's dominant "steel king", Lakshmi Mittal, has managed to climb back successfuly in Liberia after heavy criticisms that he had tried to manipulate a dishonest deal last year.


Jubilee South Africa National Office Press Statement

4 January 2007

Jubilee South Africa is outraged at the disregard for human rights and the pattern of violence perpetrated by Anglo Platinum and its police assistants. Today, as community members of Magobading, Selane, and Phasha were dispersing after their protest at Anglo Platinum’s Twickenham Mine, police from Mecklenburg Police Station in Moroke began beating them. They have arrested approximately 15 people, including the Chairperson of the Magobading Crisis Committee, Jerry Tshehlakgolo, who confirmed they are covered in blood. They have asked the police for medical attention for the injured, but the inspector said they would talk about that later and they still have not received any medical attention.

This brutality is not an isolated incident, but a pattern of abuses that should not be tolerated by any South African. These beatings and arrests come after arrests in December of 4 community leaders in the Mapela area, north of Mokopane. These 4 leaders are key organizers in defending the communities’ rights against the violence and brutality of Anglo Platinum and its PPL mine. They were arrested while ploughing their fields, and their bail conditions are reminiscent of apartheid banning orders – they are not allowed to go back to these ploughing fields. In June 2006, Anglo Platinum sent the police from Mecklenburg Police Station in Moroke who beat and shot at community members in Maandagshoek with both live and rubber bullets – at least 15 people were injured, including a baby. These community members were simply demonstrating and protecting their land from further expansion by the Modikwa Mine – a joint venture of Anglo Platinum and African Rainbow Minerals. These police arrested 2 traditional leaders, Kgoshi Isaac Kgoete and Kgoshigadi Joyce Kgoete and several other community leaders, including Emmanuel Makgoga who coordinates the efforts of communities fighting for their rights in the Tubatse Municipality area.

This type of brutality and targeting of community leaders reminds us of the days of apartheid, with gross human rights violations and the undermining of freedom of speech and assembly. Arresting community leaders is a planned strategy to demoralise and demobilise communities who dare to speak the truth about Anglo Platinum’s disregard for the communities whose land it uses for mining.

Jubilee SA is in the process of working with other human rights organisations to launch investigations into these abuses. Should South Africans be expected to sit down and shut up in places like Magobading, where people were relocated so that Anglo Platinum could mine for its billions of rands in profits each year? Should they sit down and shut up when they have no water, when there are maggots in their toilets, when young girls have to walk 30 minutes up and down muddy embankments to fetch water, where grannies who head households have to bail out buckets of water from their kitchens from flooding? This situation must be addressed, and it must be addressed now. We cannot allow our grandmothers, grandfathers, brothers and sisters, and children to live like this – and on their own platinum-rich land.

In reaction to today’s brutality, Emmanuel Makgoga stated, “We need a better life for all. Our land is taken by the mines, the people are not ploughing and there are no jobs for us. This better life is for a minority of South Africans, not for all of us. The police are still beating the people at this time in the country of democracy. We experienced beatings during apartheid as did our parents. No one should be allowed to beat anyone else. Where are we going as South Africans?”

The community’s attorney Richard Spoor said these events exemplify the “ruthless exploitation, brutality, and racism” of Anglo Platinum. He further says that, “Police Commissioner Chuene is notorious for his aggressive and violent oppression of popular protest and his enthusiasm and willingness to act on Anglo Platinum’s behalf.”

For more information, please contact Emmanuel Makgoga (Maandagshoek) 082 343 5095, Anne Mayher (Jubilee South Africa) 082 398 6882, or Brand Nthako (Jubilee South Africa) 082 628 1362.

Magobading Community in Limpopo Blockades Road into Hackney Shaft at Twickenham Mine (near Burgersfort)

Jubilee South Africa (National Office) Press Statement

4 January 2007

At 10:30 this morning Magobading Residents began demonstrating outside the Hackney Shaft of Anglo Platinum's Twickenham Mine. Residents are angry and frustrated after repeated attempts to get Anglo Platinum to speak with them about lack of services and lack of jobs. The community members were relocated from their home villages to make way for Twickenham to expand its operations. Anglo promised that 2 people from each family would be hired at a new shaft, but no one from Magobading has been hired, despite training for new workers that has been taking place.

Their new location in Magobading has poor quality houses and toilets are overflowing, ridden with maggots. They have had no water services whatsoever since April 2006, and have been walking over muddy embankments to a nearby stream to fetch untreated water. Their graves were relocated from their former villages, but they are disgusted with the disrespect shown to their ancestors by those that relocated them - all but 2 headstones have fallen and some headstones were lost. Their houses are cracking, leaking, and flooding - many of these houses are only 1 year old.

Community members have made repeated attempts to democratically and openly discuss the situation with Anglo Platinum, but Anglo refuses. Today, Twickenham Mine management addressed the crowd, telling them to talk to the structures that are supposed to handle these matters. Residents are beyond frustrated with these delay tactics as well as Anglo Platinum's broken promises. The community told the management that they would sleep there and are not leaving until Anglo listens to them and makes a plan for their concerns. They have blocked the road into the shaft and are not permitting cars or trucks to go in or out. In the past Anglo has responded to community actions by calling the police who respond with intimidation, violence, and the arrest of politically active and outspoken activists.

Jerry Tshehlakgolo of the Magobading Crisis Committee stated that there are no structures that truly represent the community and that their concerns have been ignored for years now. Jerry said, "As relocated people, we are saying enough is enough. They dig our ancestors graves and our grannies are misplaced. We have no water. Our toilets don't work. We are sick of talking and talking, this will be a year of action!"

Naga ke ya rona! The Land is Ours!

[For more information, please contact Jerry Tshehlakgolo: 082 269 1901, Shuffla Mahlakoane: 076 042 3957
Emmanuel Makgoga 082 343 5095, or Anne Mayher (Jubilee South Africa) 082 398 6882


Kenyan courts dismiss Kwale suit

Northern Miner (Canada)

20 December 2006

A Kenyan court has ruled the government is entitled to expropriate land held by seven farmers for the Kwale titanium sands project held by Tiomin Resources .

The farmers, who control eight properties in the area designated for the Kwale mining lease, had sought an order preventing the government from expropriating their land at a price based on an agreed compensation package that had previously been accepted by 371 other landholders that were displaced by the project.

Lenders for the project had advised Tiomin that they could not advance funds until all legal proceedings were finished. There are still administrative issues to be dealt with, such as official publication of the project's fiscal agreement, signed in 2005, and minor tax and duty matters.

Tiomin said it was "reviewing the development framework" for the project, whose schedule has been set back by the legal wrangle over expropriation.


Bars to a copper bonanza

By Michael Peel and Rebecca Bream, Financial Times

December 22 2006

The molten copper scatters as it pours into giant egg-cup-shaped collecting vats, dusting the surrounding ground with orange snow. The brightness catches the eye in the otherwise dark, cavernous surroundings of the Nkana smelter, in which pieces of metal and brick lie strewn about the floor.

This may be Zambia's second largest copper smelter, but even its managers admit it needs sprucing up as it approaches its 75th anniversary next year.

"We have still remained an old smelter with old technologies," says Lawrence Akombaetwa, smelter manager. "We [have] quite high operating costs, looking at the benchmarks of our friends elsewhere."

The longevity of the smelter - owned by Konkola Copper Mines, which is controlled by Vedanta Resources, a FTSE-100 mining group - highlights the gamble that metals and mining companies are taking in Zambia and elsewhere. As the copper price has soared on booming sales to China and India, Vedanta has decided it can make money in a country whose metals and mining industry has been beset for years by problems with logistics, underinvestment and pollution.

Now Vedanta faces a classic management challenge: it has no worries about the demand for its product, but plenty of concerns about how it will get that product to market.

The Vedanta story has political as well as commercial significance. The company, which is Indian-owned, took over the assets after UK-listed Anglo-American pulled out in 2002. It now looks like a bellwether for adventurous, well-financed Chinese and Indian companies taking on African extraction projects that western multinationals shun (see below).

Vedanta, founded by the Indian metals magnate Anil Agarwal, produces most of its copper, aluminium and zinc from mines and smelters in India. The company surprised the market in 2004 when it made its first foray into Africa and bought a 51 per cent stake in Konkola, Zambia's largest copper producer.

Output from Konkola's three mines and the Nkana smelter had dwindled over the years because of lack of investment and there had been problems with flooding.

Vedanta knew that it would take lots of work and money to turn Konkola round, but this has been harder than the group expected.

"We are now on the threshold of producing 200,000 tonnes of copper a year from Konkola," Kuldip Kaura, chief executive, said last month. "We were expecting to reach this stage earlier, but a lot more work needed to be done on the plants."

The logic that brought Vedanta to Zambia is neatly demonstrated at the company's Nchanga open pit mine. Francis Temba, manager of the 51-year-old facility - which is now a veritable canyon - says the rise in the copper price brought about a resurrection at a time when surface reserves were growing thinner.

The upturn has made it economically viable to dig for deeper ores that would not have been profitable to mine a few years ago, he says. "This pit should have been closed by 2004 if the price had not changed."

Yet even here there is evidence of the problems inherent in Vedanta's investment. The value of copper may have soared but so have the costs of some of the means of production. Mr Temba says the tyres for the giant 190-tonne dumper trucks that ply the supply roads have risen in price from $24,000 last year to $158,000 this year.

"Because of the boom in the mining industry, the manufacturers are taking advantage of it," he says.

Even more significant are the host of environmental problems that built up in the Zambian copper industry during its long period of state ownership and subsequent privatisation. One foreign diplomat describes the Chingola area, one of the main sites of Vedanta's operations, as an "environmental disaster".

Kabwe, another city in the country's copper belt, is one of the 10 most polluted cities in the world, according to theBlacksmith Institute, an environmental research group.

These legacy problems have already affected Vedanta commercially. In November the company was forced by the government to shut down more than a quarter of its production for almost two weeks after a leak of toxic copper sulphate caused a local river to turn blue. Konkola said the pollution occurred because of an accumulation of silt over many years at a dam that was designed to prevent spillages from the plant.

The company faces further costs related to social welfare problems such as the high HIV infection rate, estimated at 17 per cent among 15-to-49-year-olds nationally and thought to be even higher in mining areas.

Vedanta finances a hospital, distributes free anti-retroviral drugs to more than 500 employees a month at a cost of $500 each and gives out as many as 140,000 condoms a month. Looking at a sheet showing condom distribution statistics, a company official comments wryly: "There is a lot of activity here."

A further gamble for Vedanta relates to Zambia's official mining policy. The government's take from Zambia's copper industry is small even by the controversial standards of many African resource deals. A paper produced by the UK's Department for International Development in June said the country earned just $5m (£2.5m) royalties last year on exports estimated at $1.6bn.

The official take - described by one non-British diplomat as "woeful" - reflects "development agreements" struck when the industry was making losses, DFID says.

Levy Mwanawasa, Zambia's president, has said the government wants to raise mining royalty rates, although officials seem to be approaching the question cautiously.

Back at the sense-bombarding smelter, amid the acid tang of sulphur dioxide and the crackle of cooling water skittering across hot metal, Mr Akombaetwa reflects on Konkola's curious mix of bonanza and big problems. The smelter can operate only at two-thirds of capacity, in part because it is not equipped to cater for ores of the chemical composition that Konkola mines. A new smelter under construction should be able to cope better, he adds.

Asked whether the expensive new smelter will eventually make the troublesome old one obsolete, Mr Akombaetwa smiles in noncommittal reply. "That question," he says, "is not very clear."


16,000 Hit in Mines Clearout

Daily Record (UK)

January 3 2007

MORE than 16,000 people were arrested in Zimbabwe yesterday in a controversial blitz on the poor by president Robert Mugabe.

Their homes were razed after a so-called crackdown on illegal mining.

The slum clearance, officially called Operation Restore Order, was ordered to root out crime.

But United Nations officials said it would dramatically worsen the country's economic crisis.

So far, more than three million people have been made homeless or had their livelihoods destroyed.

Police burned temporary homes used by panners near the mining fields and recovered gold and diamonds.

Police commissioner Augustine Chihuri said: "A few greedy fat cats have monopolised the industry and engaged every other person in the villages, farms and elsewhere to recklessly pan for gold and other precious minerals."

Zim mine law 'almost complete'

Harare, 21 December 2006

Zimbabwe is at an "advanced stage" in finalising a controversial law designed to give locals shares in foreign-owned mines, and has sealed joint mining deals with China, President Robert Mugabe said on Wednesday.

Mugabe's government unsettled the mining industry in March when it announced plans to amend the mining laws and "indigenise" 51% of all foreign-owned mining companies, with 25% going to the state for free.

The government withdrew the document for further consultations but Mugabe has repeatedly stressed that locals should be in control of their rich natural resources.

Empowerment cornerstone of development

"Indigenisation and economic empowerment of our people remains the cornerstone of our socio-economic development," Mugabe said in an annual state of the nation speech to parliament.

"The amendment of the Mines and Minerals Act to facilitate participation by locals in the mining sector is at an advanced stage," said Mugabe.

The government empowerment has worried investors in one of the few sectors of Zimbabwe's economy that has continued to attract foreign capital following the collapse of the key agriculture sector, which critics blame on Mugabe's seizure of white-owned farms for blacks.

Major international firms with interests in Zimbabwe include the world's number one platinum miner Anglo Platinum, Rio Tinto and Implats.

Last Friday Mugabe said his government would not allow land-grab style seizures of mines by top officials, a statement analysts said was designed to calm jittery foreign mining firms.

Mugabe looks East

On Wednesday Mugabe said his "Look East" policy, which seeks to bolster ties with Asian and Muslim nations to make up for Zimbabwe's increasing isolation from the West, was bearing fruit after Zimbabwe signed joint venture mining agreements with firms from China.

"Joint venture mining projects have been agreed with several Chinese companies while there are advanced plans to open a minerals marketing office in the city of Shanghai in China," Mugabe said without giving details of the companies involved.

Analysts and industry officials say growth in the mining sector is being stunted by delays in finalising mine ownership laws and a skewed exchange rate policy.

Mining ouput declined by 14.4% in 2006, but official forecasts point to a 4.9% growth in 2007. The industry has overtaken agriculture as the top foreign currency earner in the crisis-hit southern African country.


Liberia, Mittal sign billion-dollar mining deal

Toronto Globe and Mail

29 December 2006

The world's largest steel maker, Mittal Steel Co. NV, signed an iron ore mining contract with Liberia yesterday that promises to pour more than $1-billion (U.S.) in investment into the war-ravaged state.

The agreement is a revised version of an August, 2005, deal rejected as unfair by Liberian President Ellen Johnson Sirleaf when she was elected five months later.

The deal is expected to generate more than 20,000 jobs. "There were major concessions made and we believe that the national interest has now been protected ... Mittal Steel can start its operations," Ms. Johnson Sirleaf said


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