Rio Tinto lifts force majeure at Richards Bay Minerals
Global mining heavyweight Rio Tinto has lifted the force majeure on customer contracts at its Richards Bay Minerals operation, which was wracked by violence last year. It’s a green economic shoot of sorts.
Rio Tinto said in a brief statement on Friday, 18 March, that it had lifted the force majeure declared at Richard Bay Minerals (RBM) last year amid escalating violence that saw the murder of general manager Nico Swart in May.
“Rio Tinto has announced that force majeure on customer contracts at RBM in South Africa has ended. Force majeure commenced on 30 June 2021 following a deterioration in the security situation around the mine,” the statement said.
It went on to quote Rio’s chief executive for minerals, Sinead Kaufman, as saying: “This marks an important moment in RBM’s recovery since the halt in operations last year. We must all remain vigilant and continue to strengthen our partnership with government and community stakeholders.”
Operations had resumed last year in late August following a stabilisation of the security situation around the mine, which produces titanium dioxide slag used in the production of a range of industrial items from paint to toothpaste. But it was unable to guarantee that all customer contracts could be met until now.
“The removal of the force majeure signifies that we are able to meet all customer supply contracts in line with agreed volumes and timescales,” a Rio spokesperson said in response to queries from Business Maverick.
This is a green shoot of sorts, as the initial closure was testimony to the state’s failure to provide basic security for a major employer and taxpayer which was the biggest private sector contributor to the KZN economy. Read here.
When the force majeure was declared last year, RBM said at the time that it faced: “… business disruptions orchestrated by criminals which have put its people at risk and resulted in the costly destruction and theft of property. This follows in the footsteps of previous violent incidents.”
South Africa’s mining sector more widely faces shakedowns from shadowy “procurement mafias” who want a slice of the procurement pie and who can gin up violence in communities with high rates of poverty and unemployment that have been underserved by dysfunctional local governance. Read here.
The lifting of the force majeure at RBM is clearly good news. But the reasons why it needed to be done in the first place, and the fact that it took almost nine months to end, will give investors pause for thought. DM/BM