Johannesburg - African Rainbow Minerals Ltd., controlled by South African billionaire Patrice Motsepe, said a drilling program at Modikwa platinum mine was stalled after contractors were threatened by local opponents of the project.
The managers of Modikwa, which is jointly owned by African Rainbow, Anglo American Platinum Ltd., and the local community, didn’t consult farmers before adding a new drill rig that would affect their fields, Mike Kgwete, a community activist, said by phone on May 23. Modikwa had “extensive consultation with community structures and land owners” before adding the rig at the mine in north-eastern South Africa, African Rainbow said.
“An agreement was reached for an in-fill drilling program to commence at the Modikwa mine,” the Johannesburg-based company said in an e-mailed response to questions. “Access and compensation terms were agreed with affected land owners.”
African Rainbow has faced opposition to its development of Modikwa from some members of the local community in the Limpopo province, who claim they don’t benefit from their 8.5 percent stake in the mine. While African Rainbow founder Motsepe, 52, has become South Africa’s richest black person, most of the community in the rural area live in poverty.
“Things are not going well,” Abraham Monyela, another activist, said by phone on May 23. “The relations between the mine and the community are not good.”
African Rainbow said that during the establishment of the drill site the contractor reported an approach and threats from a few people at the site, the company said. “In the interest of safety, the Modikwa Mine then instructed the contractor to remove the rig from site until there is further engagement and clarification on the matter.”
A group of people traveled by bus from Limpopo to protest outside African Rainbow’s Johannesburg office on April 25, according to Kgwete. The activists handed over a memorandum demanding local businesses benefit more from mine contracts and that companies collectively owned by the community be dissolved because the protesters said their leaders have become unaccountable.
African Rainbow said it’s committed to ensuring that local populations benefit from Modikwa, which draws 70 percent of its 4,000 permanent employees from the surrounding region.
“The area has approximately 80,000 people and an 80 percent unemployment rate, so there will continue to be challenges in ensuring the upliftment of our people living in these communities,” the company said.
African Rainbow is planning to expand Modikwa, which last year produced 325,000 ounces of platinum group metals. The drilling program “is an ongoing and routine part of the operation and is to determine geology and reef continuity,” the company said.
African Rainbow shares fell for an eighth consecutive day, declining 0.2 percent to 186.20 rand at 10:58 a.m. in Johannesburg. The stock has weakened 1.5 percent this year.