In its latest report titled 2018 Mining Royalties Research Report released yesterday Corruption Watch highlighted the lack of transparency in the royalty agreements between communities and multinational companies operating mines on their communal property. Mining royalties are paid to communities who own the land being mined and are distributed either directly into a D-account or development account, or by the conversion of royalties into equity in the mining companies.
While the study focused on the Lebowa Minerals Trust administration in Limpopo, and the management of D-accounts of the Bakwena ba Mogopa community, in North West Province, it found corruption involving mining royalties was widespread and replicated throughout the country.
“Corruption Watch has found that there is a severe lack of transparency around the negotiation and conclusion of mining royalty agreements with mine-affected communities, including the conversion of mining royalties arrangements from one form to another such as the conversion from D-accounts for beneficiaries to equity sharing with communities, as well as the withholding of mining royalties by companies,” said the report.
The reports cited how the Bakwena ba Mogopa who settled in 20 villages across mineral endowed North West have struggled with the misappropriation of community funds and royalties due to them.
The Bakwena ba Mogopa community members had no knowledge of how much money was in their D-account, which was last audited in 1992, according to the report. “They also complain that they have not been consulted on various equity conversion agreements with mining companies and do not even know which companies they hold equity in,” said the report.
Residents of Limpopo home of the Bokoni Platinum Mine, Twickenham Platinum Mine and the Ivanhoe Mine also complained that monies intended for their development and empowerment have not been released. “There are accusations from the communities of fraud, corruption, and misappropriation of funds and community assets by the leaders of traditional authorities and trustees,” said the report.
The Corruption Watch findings confirm former Public Protector Thuli Madonsela’s findings that more than R600 million went missing from the coffers of poor communities living between Brits and Rustenburg, and fingered the North West Department of Traditional Affairs and the so-called Bapo Administration as being responsible.