BANKING ON COAL OP-ED
When you drive from Mfolozi to Mtubatuba, you can smell the sadness in the air
While the climate impacts of burning coal are well documented, a lesser-told story is the misery endured by communities forced to accommodate new coal mines as neighbours. Banks which finance these mines are complicit.
COP28 is just around the corner. It comes at the end of a year of unprecedented climate disasters throughout the globe, with an estimated cost of more than $57.6-billion.
The urgency to act has never been greater.
Yet there is little optimism for any significant and binding resolutions to come out of this process.
The fact that a major oil-producing nation (United Arab Emirates) is hosting the conference already suggests that this COP will follow the trend of allowing those with a deeply vested interest in sustaining fossil fuels to dominate the agenda.
As our political leaders consistently fail to act, it is clear that the action of civil society is critical to drive a just transition from fossil fuels to renewables before it is too late to avert catastrophic climate breakdown.
An important arena of civic action is the drive to expose banks which finance fossil fuels and to encourage disinvestment in fossil fuel expansion.
Many of our local banks claim a commitment to a clean environment and to transitioning from fossil fuels – but their investments don’t live up to this.
Standard Bank, for example, states that they “have the opportunity to play a leading role in supporting a just energy transition for Africa” and yet they have come under fire for increasing their investments in fossil fuels, financing the East Africa Oil Pipeline, and using undue force on protesting climate activists and journalists covering the issue.
Nedbank has long built its brand on the premise of being the “green and caring bank”. But their brand is contradicted by where they are putting their money. While they must be commended for undertaking not to provide project financing for new thermal coal mines, regardless of jurisdiction from 1 January 2025, they continue to fund fossil fuel enterprises, including Petmin – one of the key players in South Africa’s coal industry.
Petmin claims to be the biggest miner of anthracite – a high-heat burner with an even higher carbon footprint than bituminous coal – and is also the owner of Tendele Coal Mining (Pty) Ltd which has been operating the controversial open-cast Somkhele Coal Mine in northern KwaZulu-Natal since 2007.
The devastating impacts of climate change are reason enough not to invest in fossil fuels. But coal mining also brings other injustices – and, as one of the players enabling the expansion of coal mining, Nedbank needs to take some responsibility. The story of the Somkhele community illustrates this clearly.
Nedbank has directly contributed well above R300-million to the expansion of Petmin’s operations in the uMfolozi district, including loans made in 2023. (See Nedbank Capital Expenditure Project Listing 1 January 1993 to December 2019, published 2020; and Tendele’s answering affidavit in Mcejo & Others v Tendele & Others Urgent Interdict Application (2023), p748.)
Standard Bank has also provided loans for the mining operation.
As the following review of the social and environmental impacts of these operations clearly shows, this investment flies in the face of Nedbank’s claim to be a green and caring bank.
‘If I was once a garage, I am now a scrapyard’
Tendele Coal Mining (Pty) Ltd has been operating the open-cast Somkhele Coal Mine in northern KwaZulu-Natal since 2007. Located on Ingonyama Trust land, the mine has gouged out a huge swathe of land between the N2 and the Hluhluwe/Imfolozi Park. The original mine was later extended to include KwaQubuka and Luhlanga.
In 2016, Tendele sought to extend its mining rights as the Somkhele mine’s life span was coming to an end. The Department of Mineral Resources and Energy (DMRE) granted them rights to another 212km². In response to legal action contesting the legitimacy of this, Tendele agreed to abandon its mining right to much of the area and has focused on expanding its operations into nearby Ophondweni, Emalahleni and Mahujini – a total area of 17.66km².
In the same year, residents near the Somkhele mine joined the Mfolozi Community Environmental Justice Organisation (Mcejo) which had successfully opposed the planned Fuleni coal mine on the border of the Hluhluwe/Imfolozi Park.
The Somkhele community had several grievances with the mine, which they took to the DMRE. These included blasting, cracked houses, polluted drinking water, dried-up water resources, unlawful and insensitive exhumation of ancestral graves, loss of livestock, grazing land and fields.
The promised jobs had been awarded to only a few, and little or no compensation had been given for loss and damages caused by mining operations. Because of their experience with the first mine, the community also wished to challenge the proposed extension.
In 2017, Mcejo members launched their first court application in the KwaZulu-Natal Division of the High Court in Pietermaritzburg to interdict the operation of the mine until Tendele had lawfully obtained the required environmental licences. The court action established that Tendele had no authorisation under the 2014 National Environmental Management Act (Nema) to operate.
Tendele contended that such authorisation was unnecessary, as, prior to 2014, authorisation was granted by the Mineral and Petroleum Resources Development Act 28 of 2002. Although it might seem obvious that ongoing mining operations should comply with the current legislation, the court found in favour of Tendele.
Represented by Kirsten Youens and Janice Tooley at All Rise Attorneys for Climate and Environmental Justice, Mcejo then appealed to Minister Gwede Mantashe to withdraw the rights granted to Tendele in 2016 on the basis that Tendele had not followed lawful procedures when embarking on the mine.
When the minister denied their appeal, Mcejo went to court again.
This case was reviewed in the Gauteng Division of the High Court in Pretoria in November 2021. In a judgment handed down in May 2022, Judge Noluntu Bam found that the Scoping/EIA done in 2013 was unlawful; there was no consent in terms of the Interim Protection of Informal Land Rights Act, and the public participation process was defective.
Her judgment was a damning indictment of Tendele’s failure to comply with regulations, describing Tendele as “misguided in its view”, and stating that its attempt to justify the exclusion of groups required to be consulted by the regulations as part of the public participation was “nothing short of egregious”.
She further ruled that its defective notices had unduly limited the public’s participation; that Tendele “flouted the law with regard to public participation”; that its attitude during the scoping phase was “offensive”; and portrayed Tendele as an “unbridled horse” that showed little or no regard for the law.
Green light to mining
Despite this finding, in July this year, after Mcejo and others brought an urgent interdict to stop Tendele from commencing with mining, Judge Piet Koen discounted Bam’s recommendations and gave the green light to the company to continue with operations in the new areas.
This is despite Tendele not having complied with Nema’s EIA regulations for listed activities such as the removal of indigenous vegetation and the building of roads.
While the legal battle has been waged in the courtroom, on the ground residents have been embroiled in a bitter dispute that has severely impacted on their security, livelihoods, community cohesion and way of life.
There is no doubt that before the mine came, the area had limited resources and employment opportunities. But while materially poor, the community was land wealthy, thanks to the system of land distributed by the Ingonyama Trust.
In the words of Gedenezer Dladla in an affidavit compiled for submission to the UNHCR, “The fields are a bank and wealth that each homestead owns for the current and many generations to come.”
The community invested in the land, tending to it to ensure that it was not overgrazed and using traditional methods to cultivate sustainable crops.
But the fields were not their only “bank”. The residents of the area also invested in their strong ancestral and spiritual connections to the land, connecting with ancestors through tending to gravesites or enacting family and community rituals at their homesteads.
And, most profoundly, they invested in community, with a strong sense of ubuntu enabling resources to be shared and support to be offered. For the families forced to move to make way for the mine, and for those living on its margins, these investments have been destroyed.
The communities currently standing in the way of the mine’s expansion have been more resistant to moving, despite unrelenting intimidation and financial inducements which were larger than the paltry amounts offered to those initially moved.
They have learnt from the bitter experiences of those who went before them that moving means not only losing the land that binds them to their ancestors but also being forced to encroach on neighbouring communities where they are resettled, with reduced access to grazing and fields for cultivation.
They have learnt what it is to live on the borders of an active mine, with blasting several times a week, coal dust, dried rivers, polluted rainwater, and increased respiratory illnesses. They have learnt that the promised social improvements have been scant and that jobs have benefited only a few.
They have paid heavily for their resistance.
The murder of Mcejo member Fikile Ntshangase in 2020 has been well documented in the media, and it shook the community to its core.
As one resident said, “Losing Ma Fikile Ntshangase finished me and stopped all my happiness.”
Less well known is the widespread ongoing intimidation and harassment experienced by Mcejo members – both those who have refused to sign relocation agreements and those who support them.
People have experienced multiple death threats, drive-by shootings, rocks thrown at their homes, their houses set alight, mobs descending on them in the night and demanding that they sign, people beaten up at meetings and in their homes.
Schoolchildren have been given threatening messages to pass on to their parents. Ntshangase’s death gave a chilling weight to these threats.
When some Mcejo members were forced to stay elsewhere because they feared for their lives, the Mpukunyoni Traditional Authority made a resolution that their rights to the land had lapsed as their homes had been “abandoned”, and their homes were to be demolished. The homes were subsequently set alight, even though the authorities were well aware of the reasons that the residents were not staying at home.
Psychologist Dr Garret Barnwell was commissioned by All Rise Attorneys to assess the mental health of those affected by the mine. In his report, he states that 78% of the residents interviewed in Ophondweni and Emalahleni “are experiencing continued traumatic stress reactions owing to the ongoing atmosphere of violence associated with the operation and proposed expansion” of the mine.
He lists some of the consequences of this as intrusive thoughts, nightmares, flashbacks, avoidance of distressing thoughts or external reminders, heightened anxiety, and changes in mood and thinking patterns.
In the words of one resident, “I don’t know what to do. I have no direction… it is a f**k up. I am dead. Mentally, body-wise, if I was a garage, I am now a scrap yard…”
Barnwell points out the catastrophic impact of collective trauma as it disrupts community relationships, leading to the isolation and alienation of individuals who feel unable to access the same joy or meaning in things they used to (e.g., attending public gatherings, going to funerals, or church).
“Consequently, when that sense of communality is disrupted or destroyed, the individual loses a part of themselves and the emotional and other resources they have invested in their community and place of living to help them during challenging times.”
Gatherings such as church services, funerals and weddings, once a source of joy and meaning, have become contaminated by suspicion, hostility and exclusion. Not only is the community traumatised, but its coping mechanisms are disabled.
He further points out the specific trauma that results from people feeling betrayed by authorities they once trusted to safeguard their interests. These include the Mpukunyoni Traditional Authority; the police and justice system which have failed to find and prosecute Ntshangase’s killers or others guilty of intimidation; the municipal and civic leaders; and the DMRE and government, all of whom have been acting solely in the interests of the mine.
“Before mining, people said they felt listened to and supported by traditional authorities. As with the homestead, traditional customs, laws, values and beliefs were integral to community cohesion. It was explained to me that a significant level of trust was placed in traditional authorities and that they had no problems in the past compared to today.”
In his report, Dr Barnwell asserts that such continuous collective traumatic stress severely impacts people’s capacity to engage meaningfully in public participatory processes and negotiations about relocations. They are in no position to make clear decisions about their best interests.
Paltry public participation efforts
Thus, the public participation efforts undertaken by the mine and the government, apart from being utterly inadequate in terms of the procedures followed, are gravely undermined by the atmosphere of fear, violence and intimidation.
Such conflicting interests would make the situation difficult to manage under any circumstances.
But Tendele has fuelled tensions in the area by circulating letters claiming that workers will lose their jobs unless everyone agrees to move to make way for the mine extensions, accusing those who will not move of standing in the way of development, and naming community activists who they claim are threatening the livelihoods of those directly or indirectly employed by the mine.
People were transported by a mine employee to disrupt a Mcejo meeting and to physically assault and threaten the attendees. Mine employees have made direct threats to community members.
Tendele has consistently argued that it is bringing substantial economic benefits to the area and local Mtubatuba, citing employment figures of up to 1,500, although many of these refer to contracts for coal transporters, taxi drivers and other service providers, rather than those directly employed by the mine.
However, the mine is not the only major employer in the Mtubatuba area – the sugar industry, and nearby iSimangaliso Wetland Park and Hluhluwe-iMfolozi Park provide over 13,000 jobs between them, and there is also significant forestry and farming of macadamia.
Unlike the mining jobs, these are sustainable long-term employment opportunities which do not destroy livelihoods and the arability of the land.
The proposed extensions are necessary to sustain the jobs already created by Tendele. There are no new employment opportunities to offer those sacrificing their land and livelihood. In a few years, this mine, too, will be exhausted.
Many of Tendele’s much-vaunted social projects are merely to mitigate damage done by the mining operations. It boasts of establishing more than 21 water points to supply potable water to benefit more than 2,000 people in Mpukunyoni.
But people only need these water points because they can no longer access clean rainwater due to coal dust or water from the rivers and streams as a direct result of the mine.
The water points Tendele has provided are insufficient to mitigate the loss of clean water as a consequence of Tendele’s extraction of water from the Umfolozi River and groundwater, lowering the groundwater resources which are critical for the community in times of drought.
In its most recent environmental audit, dated August 2023, the auditor acknowledged that Tendele has never audited its resettlement process to date; that there are families who have been relocated who are worse off; that there are families still living within the mining areas unacceptably close to the mining operations; that some families have never been compensated for their loss of land and inability to farm as a result; and that the mental health of people has been significantly affected.
It has been argued that the anthracite mined at Tendele is critical for South Africa’s ferrochrome producers. It may be debatable whether the benefits outweigh the costs, but even if one accepts that these mines are a “necessary evil”, the absolute minimum the affected community deserves is adequate compensation – not only to those who have to move but also to those living on the edges of the mine.
It deserves adequate transparent community participation processes with honest and impartial brokers representing community interests; a well-developed resettlement plan which secures the futures of those moved; a transition plan which takes into account what will happen to the workers and service providers when the mine closes; an environmental impact assessment compliant with current legislation; and a fully funded guaranteed rehabilitation plan for the mine post closure.
Failure to provide these has led directly to the criminality, violence and community breakdown we can see today.
Further, Tendele has argued that it needs to expand the mine to service its debt – were Tendele to undertake the necessary procedural steps to be fully compliant with Nema and Ilpra and other legislation, it seems unlikely that the mine would cover the debt or be profitable.
A mine that relies on non-compliance to be viable is a liability to investors, as well as to the community.
The area between iSimangaliso Wetlands Park and the Hluhluwe/iMfolozi Park could be a flagship project promoting sustainable agriculture, sustainable tourism and sustainable conservation projects. Instead, it is rapidly becoming an eyesore as the mine inflicts deep wounds on its land and its people.
In the words of a nearby resident, “Coal mining brings more tears than wealth. If you drive from iMfolozi to Mtubatuba, through the mine-affected communities, you can smell the sadness.”
It is a deep injustice to demand that communities sacrifice so much to produce a fuel which cannot be part of any liveable future, as scientists and economists have reiterated time and again – especially as their sacrifices will make them less resilient and far more vulnerable to climate disasters caused by burning that fuel.
Financial institutions such as Standard Bank and Nedbank need to redirect their investments to projects that truly benefit the community and do not imperil the future of our land and nation.
To live up to their brand as caring banks, these and other financial institutions need to shift their investments to build a liveable future for all of South Africa’s people. DM
Bridget Pitt has published poetry, short fiction, non-fiction and four novels. Her non-fiction work includes co-authoring Black Lion, the memoir of Sicelo Mbatha, a spiritual wilderness guide. Her latest novel, Eye Brother Horn (Catalyst Press 2023), explores the social and ecological impacts of colonialism in South Africa. Pitt is a campaigner for social and environmental justice and has written on environmental issues in various journals and collections and in Daily Maverick. She lives in Cape Town.
Sarah Robyn Farrell fulfils a multiplicity of roles in the climate justice space, including divestment campaigner at Fossil Free South Africa. She is a writer and musician too.