London Calling - February 10 2003Published by MAC on 2003-02-10
London Calling! February 10 2003
Getting shafted: is another mine disaster on the way?
Its a tale with everything except an apparent happy ending. Intriguing enough to keep stock watchers babbling for weeks and corporate scandal sheets bubbling long thereafter. Well, that would be the case if the story were unfolding in the US, Indonesia or the Philippines - where memories of recent mining scams are still as hot as a foundry floor. But since what financial analyst Stuart Bailey calls something very Machiavellian is now playing to a South African audience, few outside the country have even heard of key actors.
The cast includes the colourful Roger Kebble and his son, Brett; their erstwhile colleague, conflict resolution advisor, Ronnie Watson and his rugby-playing brother Cheeky. Theres the inevitable City connection too: the distinguished (if only in name) Sir Mark Wellesley-Wood. Last week Kebble junior dubbed him a pinstriped bandit from London. This week, W-W claims he doesnt even own a pinstripe!
Reluctantly in tow comes the accountancy company, Deloitte & Touche, which Brett Kebble has accused of helping build the case against his father. Behind rather, under or against them are ranged four white-managed mining outfits and a potential black empowerment partner.
Marinduque mark two?
And then theres the plugs. Not just the self-exculpatory ones but real, physical, plugs those placed by Canadas Placer Dome (no less). These are meant to separate Placers huge South Deep diggings which it owns with Brett Kebbles Western Areas company - from Harmony Golds abandoned mine thats adjacent and upstream. Though stream may prove to be an unfortunate euphemism in the very near future: torrent could be more appropriate.
For Harmony is now intending to turn off the pumps, even while its underground waters are building in the shafts. This is because Brett Kebbles Western Areas, along with Placer, wont pay the costs of pumping since (or so Kebble says) they have no interest in the ore body. It doesnt take a degree in engineering to guess what might happen next. Yet incredibly Kebble claims that a 1,500 metres deep lagoon of sullied waters, next door to his own mine, poses no threat.
Just recall the appalling damage caused when another Placer plug failed in the Philippines seven years ago: two hundred million tonnes of toxic tailings spewed onto farmland and into the Calancan Bay.
Or what happened at the Wheal Jane mine in early 1992, after it was closed down by its private management. The British government and Rio Tinto withdrew funding and the deep shaft pumps were turned off. The tailings dam tapidly overflowed (or possible sluice gates were deliberately opened) causing the worst river and coastal contamination southern Cornwall had experienced in recent times.
Kebbling a case together
The first act of the current tragi-comedy opened last year when Roger Kebble is forced to resign from DRD, handing over to the redoutable pinstriped bandit, Sir Mark Wellesley-Wood. Kebbles reputation while at the helm of DRD was as blotched as a dappled mare. In November, he was indicted on 38 counts of fraud and contravention of the Companies Act after allegedly reaping personal benefits of 1.1 million Rands a year. Lost in the unseemly shuffle was the fact that, under Kebble, DRD had an appalling reputation for wilful disregard of its workforce and the massive dumping of untreated and uncovered tailings for miles around black dwellings in the Soweto area.
Last year, Oxfam-CAA (Australia) accused DRD of allowing its Tolukuma gold mine in Papua New Guinea to poison a river with mercury-contaminated waste, though DRD maintained an environmental baseline study had established elevated mercury levels before mining started. According to Tolukuma management environmental audit, carried out last August, confirmed the company was complying with the countrys standards.
Its also alleged that Kebble laundered his ill-gotten gains through two enterprises controlled by the Watson brothers. One was Global Economic Research (offering conflict-resolution services as did the notorious, now disbanded, Executive Outcomes before it). The second was Skilled Labour set up by the supposedly pro-ANC Watsons, to support black labour interests.
The curtain rises on Act Two, where the Kebbles, outraged at their erstwhile golden hen hatching a foul plot against them, accuse the polices Commercial Crime Unit of accepting bribes. On February 5 2003, the Johannesburg High Court overturned the warrant for Kebbles arrest the previous year, but only because a Financial Mail reporter and two representatives from DRDs auditors, Deloitte & Latouche (DRDs auditors) illegally accompanied the original search.
A distinct lack of Harmony
The Third Act is still being played and a satisfactory denouement isnt in sight. With some worried eyes fixed helplessly on those plugs - which may or may not give way - corporate internecine recriminations are the order of the day. Contradicting his claim (on February 2nd) that Western Areas isnt interested in buying Harmony back (his company sold it in 1999), Kebble now says he may re-open the mine. Harmony could itself propose a deal with Placer and Western Areas. Or Kebble may invite the South African government to take over Harmonys mining licence, giving it to Western Areas and their black empowerment partner. (Taking a leaf from recent books, perhaps the government could invite a UNEP Inspection team to provide a solution which will keep not only shaft and waters but also the warring parties apart?)
Amid this hokey-pokey, it seems anyone could do almost anything. Meanwhile the underground workers and South Africans as a whole are saddled with two companies whose recent history in tailings management is among the worst anywhere in the world. Not just Placer, but Harmony too, whose uncontained, abandoned, slurry heap at Merriespruit gave way to torrential rains on February 22 1992, burying the township and killing 17 people.
And theres a Russian-London connection in all this too. But youll have to wait until next week to hear more about that. That is, unless the shit hits the shafts at South Deep in the meantime.
[Sources: Mineweb, 2/2/2003; 4/2/2003; 5/2/2003, 10/2/2003 ; Roger Moody Into the Unknown Regions: the hazards of STD, Nostromo Research, Society of St Columban and International Books, London and Utrecht, 2001; Personal observations at Soweto, Nostromo Research, December 2001; Mining Journal, London Novenber 8 2002; Oxfam-CAA Report on Tolukuma mine, 2002; Project Underground and MiningWatch Canada STD Toolkit, Berkeley and Ottawa, 2002] ; Mining Journal, London, March 4 1994]
[London Calling is published by Nostromo Research, London. The opinions expressed do not necessarily reflect those of any other individual, organisation or editors of the MAC web site. Reproduction is encouraged with full acknowledgment