Transnet, Minerals Council of South Africa move to put an end to costly illegal mining
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DURBAN - WITH the mining sector bleeding more than R7 billion due to illegal mining every year, Transnet and the Minerals Council of South Africa have agreed on a multipronged strategy to arrest the long-existing threat of “syndicated organised crime”.
In a joint statement, the state entity and the country’s mining companies’ representative body said they would “collaborate more closely on security issues, for the implementation of technologies to reduce theft and vandalism of infrastructure and to put a stop to organised syndicates operating the illegal mining”.
“(Latest) estimates were that the annual commercial value of illegal mining and illicit dealings in precious metals and diamonds amounted to R7 billion,” said Allan Seccombe, spokesperson for the council.
“Illegal mining has a significant economic impact on current mining operations, both in terms of losses of product or productive resources, but also in terms of the costs of additional safety and security measures which seriously undermines sustainable mining prospects,” he said.
“Mining companies are committing exorbitant amounts of money and resources that run into millions of rand every month to ensure the safety of their employees and prevent illegal miners, who are often armed with serious firearms, from entering their mines,” he said.
“Where illegal miners trespass on operating mines to do their work and especially where this is accompanied by production stoppages for the companies, it results in serious losses of revenue, taxes, employment opportunities, foreign exchange earnings and procurement generated by legal mining.”
Seccombe said illegal mining also contributed to the establishment of alternative and illicit markets.
“It is in this space where the government also loses out on royalties, income taxes, VAT, etc,” he said.
He said these factors negatively affected investor confidence with an adverse impact on the ability of the industry to continue growing the economy and contribute to sustainable job creation opportunities.
Transnet Group chief executive Portia Derby said: “We have a shared interest in ensuring that we collaborate to better deliver on our respective mandates, and move the South African economy forward.”
Derby spoke after a recent workshop attended by Public Enterprises Minister Pravin Gordhan, the council’s president Nolitha Fakude and several captains of the mining industry, among others.
“We are firmly of the view that the mining sector and Transnet are joined at the hip. It is crucial for us to collaborate and realise real synergies that grow export volumes, promote greater investment and growth in mining, and which grows Transnet’s revenue streams and sustainability,” said Fakude.
The collaboration agreement between the two would also include collectively working to ensure faster recovery from derailments, said Transnet spokesperson Ayanda Shezi.
“Notwithstanding the challenges experienced in addressing the complexity of illegal mining and the transnational trafficking of precious metals and diamonds, no single stakeholder can address the challenge of illegal mining on its own – collaboration is key,” said Seccombe.
“The past year has seen a new trend in illegal mining encroaching on the diamond fields of Kimberley as well as chrome mining in Limpopo. Evidence of illegal mining in the coal industry has also become apparent. The mining industry, individually and through the Minerals Council, remains committed to working with other stakeholders to address this serious challenge,” he said.
In a presentation to Parliament last week, the Department of Mineral Resources and Energy announced that a special security task team to address the illicit mining challenge had been set up.
It involved the department, the SAPS and the Hawks.