031110 A new study has found that SA coal reserves have been significantly downsized since 2003.photo by Simphiwe Mbokazi 453

Mineworkers at the Zululand Anthracite Colliery (ZAC) have rejected the company’s offer of a R10 million remuneration bonus as they are suspicious about funds apparently missing from their employee trust fund and the conditions of the windfall, which they see as “signing their lives away”.

The workers have been on strike since last month and last week refused to resume work until their fears over the missing funds had been allayed.

ZAC, which is majority owned by Rio Tinto through Australian-based Riversdale Holdings, agreed to pay close to R10m to its employees through the ZAC Employee Trust in order to address the concerns over missing funds.

Unions fear that the workers’ reluctance will scupper a takeover of the colliery by Forbes & Manhattan Coal, which agreed last year to buy Rio Tinto’s entire stake in Riversdale Holdings for R440 million. Riversdale Holdings owns 74 percent of ZAC and 74 percent of Riversdale Anthracite Colliery.

ZAC has encountered problems with black economic empowerment (BEE) partner Maweni Mining Consortium (MMC) over a community trust fund and its employee trust. MMC owns 26 percent of the mine. Khethani Majola, the chairman of the Association of Mineworkers and Construction Union (Amcu) at ZAC, said last week that although workers wanted their money they were not willing to “sign their lives away”.

Conditions set by Rio Tinto constitute a full and final settlement of the claims and intention to arrive at a complete settlement of all disputes and claims that workers may have now or in the future.

The agreement also stipulates that workers must support the sale of the mine, which would help to obtain the consent for the transfer of the licence from the minister of mineral resources, in terms of section 11 of the Mineral and Petroleum Resources Development Act (MPRDA).

Another condition is that workers support the lifting of the existing notice of intention to impose a compliance order on the ZAC operation.


The mine was found guilty of contravening MPRDA regulations, and non-compliance with health, safety and environmental regulations, and was temporarily closed in June last year.

The mine has also faced protests from the Okhukho community, who claimed they had not benefited from the BEE structure, which gives them a 13 percent stake. Other allegations included workers “being robbed of their dividends”.

Majola said signing the agreement meant that workers would have to let go of all the disruptive, historical legacies that ZAC had created. “Workers feel they are being bribed by the company. They will only get back to work once they get their monies without signing any documents,” he said.


In a communication brief between workers and the company, dated December 19, 2012, ZAC said there was nothing that the management could do until all parties had approved the special dividend.

It also stated that Riversdale would only release the funds on the signing of the agreement by all involved parties.

Rio Tinto spokesman David Outhwaite said ZAC management and workers had been unable to reach an agreement on the bonus issue.


He said the sale of the shareholding to Forbes had been concluded and was in the hands of regulatory authorities. “It is a commercial transaction involving the shareholding and not related to worker issues,” he said. Management planned to meet with the unions in the coming days.