Business Maverick

Business Maverick

Sibanye says illegal mining a “growing and material risk” for its SA operations

Sibanye says illegal mining a “growing and material risk” for its SA operations
From left: A policeman aims his rifle at the entrance of a cave, believed to be the sleeping quarters of the zama-zamas. (Photo: Shiraaz Mohamed) | A sign directs to the Sibanye-Stillwater Thembelani and Khomanani platinum mines, operated by Sibanye Gold Ltd., at the roadside in Rustenburg, South Africa, on 22 April 2020. (Photo: Waldo Swiegers / Bloomberg via Getty Images) | Police destroy several structures in an attempt to shut down an illegal mine operated by zama-zamas. (Photo: Shiraaz Mohamed)

Diversified metals producer Sibanye-Stillwater said on Monday that illegal mining, which went into decline at its operations after 2017, was growing again and represents a "material risk" to its South African operations. 

Sibanye highlighted the issue of illegal mining on a supplementary document to its suite of annual reports published on Monday. In early 2018, the company declared that it had cleared out most of the illegal miners or “zama zamas” that had been targeting its gold shafts after a concerted blitz.

But any victory lap taken at that time would have been premature. After a sharp decline in 2018, when the number of illegal mining incidents to which Sibanye responded fell to 92 from 515 in 2017 – a fall of 82% – the numbers are spiking again. The number of such incidents doubled in 2022 to 363 – one per day effectively – from 187 the year before. 

And the number of illegal miners arrested last year on its properties soared to 1,115 from 473 in 2021. 2017 remains the “record year” when 1,405 such arrests were made, but the trend is clearly hurtling in that direction again (see table below).

“For 2022, illegal mining presented a growing, and material risk, for our operations. It seem to be getting worse, and – to protect our operations – we are compelled to consider all legal measures available to stop the scourge,” Sibanye said. 

“Currently, illegal mining is not directly addressed by South African legislation, which complicates the fight against its eradication of, illegal mining. Additionally, those apprehended cannot be charged with illegal mining … When arrested, criminal miners are primarily charged with trespassing and often escape prosecution for the criminal offences they commit.” 

This effectively ties one hand behind the back of the mining industry which is confronted with sophisticated and organised criminal networks that are even striving to win hearts and minds in the communities they simultaneously menace. 

“Illegal mining syndicate leaders (criminal gang bosses) bribe communities to turn a blind eye to their activities; they do so by handing over cash to fund certain community programmes. Sibanye-Stillwater welcomes self-funded community projects, however we condemn the use of illicit proceeds by gang bosses to buy favour and immunity for criminal activity,” Sibanye said. 

Sibanye noted in its report that the many consequences of illegal gold mining include spillovers into other forms of criminal activity such as the theft of copper cable, explosives and diesel from mines. 

Sibanye said in March that copper cable theft last year had cost it over R1-billion in lost output as replacing it cuts into time that would be devoted to production.  ( ).

In February, Sibanye CEO Neal Froneman told Business Maverick that the South African mining industry was being hammered by a growing crime wave and that illegal mining “was out of control.” 

“Although our SA gold operations are most impacted, unauthorised breaches into underground workings occurs at our SA PGM operations, where criminals access remote underground areas through holings (holes to access underground areas) to steal copper cable, among other illegal activities,” Sibanye said in its report.

“Surface illegal mining remains a concern and continues to manifest when groups of criminal miners invade our mining sites to steal material. Invasions mainly take place at night, targeting old processing areas. These groups are armed and frequently retaliate violently against Protection services.” 

In other words, Wild West style shootouts. 

Illegal miners gain access to active mining shafts by bribing and intimidating the company’s employees. Since 2013, when Sibanye was initially spun off from Gold Fields, over 2,000 of the group’s employees have been charged with aiding and abetting illegal mining, 200 last year. 

“Control measures include biometric access control systems, smart turnstiles, remotely-operated padlocks, intelligent lamp room controls, sterile interlocked material-conveyance facilities, closed- circuit television systems with thermal capability, unmanned aerial vehicles, intensified stop-and-search procedures, highly-trained search-and-rescue teams, reward systems, as well as saturation patrols and armed guarding,” Sibanye said. 

That of course comes with huge costs. 

Illegal mining is one of the socioeconomic aftershocks triggered by the decline of the once massive and massively exploited migrant labour system that provided the sector for decades with a source of cheap African labour. This decline, as we have noted in this publication before, has spawned a social apocalypse, and the mining sector is now paying a steep price for its past practices.

Still, the sector, to its credit, has cleaned up its act on many fronts and remains crucial to the economy. A “material risk” with deep historical roots that now wears the mask of organised crime is one of many obstacles to the investment that the mining sector requires. DM/BM 


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