The hidden costs of mining: Part 1

The South African Human Rights Commission has directed government to consider new measures to protect communities affected by mining.

American writer Peter Montague once lamented that “development” is often measured with wonky calculators that have no minus symbols. The result: accountants use the plus symbol with great enthusiasm, rarely bothering to measure or subtract the negative effects on people and their environment.

This also seems to have been the case with the mining industry, although there have been winners, losers and in-betweeners for more than a century.

At one end of the scale there are the Oppenheimers and the Motsepes; somewhere in the middle is a broader band of beneficiaries; and, at the far end of the spectrum, people who have enjoyed very few benefits or have had their lives turned upside down by mining.

The last category includes poor and largely voiceless communities that have been shoved off their land, and lost their homes, livestock grazing rights and social cohesion after being relocated with the barest minimum of compensation.

In some cases, they have been moved to the peripheries of the new mining lands to live in cramped settlements under clouds of coal dust, asbestos fibres, and possibly exposed to radioactive and toxic waste residues.

Rivers and boreholes that once contained adequate supplies of clean water have been appropriated or polluted by water-thirsty mining companies, and the tranquillity of rural life has been replaced by the pervasive din of heavy equipment, trucks or sirens that signal the onset of daily blasting operations.

It is against this backdrop that the South African Human Rights Commission has directed several government departments to consider sweeping reforms and corrective measures to protect vulnerable communities who bear the brunt of mining’s numerous negative effects.

The commission’s far-reaching recommendations were published on 21 August 2018, after a series of national hearings in 2016, along with written submissions form mining companies, mine-affected communities and other stakeholders.

The report, by Advocate Mohamed Ameermia (with panel members Janet Love, Lindiwe Mokate and Professor Tracy-Lynn Humby), notes that the commission “is sensitive to the challenges faced by the mining industry, including volatile commodity prices and increasing costs. Nonetheless, sight cannot be lost of the real and long-term impacts that mining operations have on communities and surrounding environments.

“The non-profitability of mining operations cannot be cited to avoid social and legal obligations … it is not only about what is given, but equally about what is taken away.”

Land and compensation

During hearings held in Mpumalanga, Limpopo and KwaZulu-Natal, the commission heard evidence that communities were often split between people who were directly affected by mining and those who were not. Those who refused to move to make way for mining were subjected to threats, harassment and intimidation from fellow community members, mining companies, traditional structures and police. “Many communities do not see land as a commodity, but rather as a heritage, a means of basic survival and the key to independence.”

When people were relocated, some companies built new homes of superior structural quality compared to traditional homes, but they also needed to take account of the fact that communities were losing much more than simply the physical structure of a house. They were also losing informal rights to communal land on which their livestock could graze and they could cultivate their crops, and free natural resources such as firewood, food, fencing poles, traditional medicine, grasses and reeds.

“Communities have often lived in an area for decades, if not centuries. The land, its history and the community composition form essential elements of a social structure that has become deeply entrenched into the lives and livelihoods of many.”
Surprisingly, the commission noted, there was no regulatory guidance provided for the calculation and payment of compensation, including methods to calculate loss of income from small businesses, crops or livestock.

“While the majority of mining companies involved in the hearing process submitted that relocation and compensation agreements are physically signed by each individual recipient, the lack of formal guidelines for transparency or oversight renders the process vulnerable to abuse.”

In one case involving a platinum mine, reimbursement for the loss of crops was paid into traditional authority trust funds for the joint benefit of several communities, but it was unclear whether tribal authorities had accounted for how these funds were spent. The commission noted that community trust funds were often “riddled with complexities and a lack of transparency”.

In another case, a family was relocated to make way for a coal mine, but was disqualified from the standard compensation benefits on the basis that the relocation was for “humanitarian reasons”.

The commission also raised concerns over the often “disrespectful and unlawful” exhumation and relocation of graves. “Grave relocations are one of the most sensitive and potentially contentious issues … ancestral graves have significant cultural and spiritual importance, and their exhumation and reinterment should not be reduced to a consideration of the physical process of relocation.”

In one case study in KwaZulu-Natal, it was alleged that ancestral remains and headstones were damaged and the remains left unburied and unmarked, or simply mixed up and buried together.

On the issue of land, the commission recommended: “In cases where people are to be relocated for mining, at least two-thirds of the directly affected people must consent to mining. The Department of Rural Development and Land Reform should also publish on its website, copies of agreements it has concluded with mining companies, so that other communities that stand to be affected by mining can ensure that they have as much information as possible.”

Mine closure and rehabilitation

The commission is worried about the large number of abandoned and derelict mines, and the severe lack of guaranteed funding to rehabilitate the environment once mining is completed.

Environmental management plans often use vague language to describe what would happen once mining ceases, promising that “final land use will be optimised from an economic, social and environmental perspective”. At the end of the day, this often means the cheapest option possible.

Although the Department of Mineral Resources has produced a guideline document on the cost of rehabilitation, these calculations do not factor in inflation and are unable to determine realistic financial liability.

“In practice, therefore, mining companies develop their own closure costing calculation models, resulting in multiple distinct approaches and no standardised approach for the assessment of appropriate liability. The fact that mining companies are responsible for determining their own model has, in some instances, meant that the required quantum for proper closure is grossly underestimated.”

There was also concern that if a mining company were to be wound up or liquidated, the financial provision for rehabilitation would not be recognised as a special claim against the company’s assets to be set aside, prior to satisfying other creditors.

“This is hugely problematic as the burden of an unrehabilitated environment is subsequently shifted to communities and the state.”

The Blyvooruitzicht mine is such an example. Although there had been an undertaking that the environment would be left “geologically and geophysically stable” and would not create any economic, social or environmental liability, mining has left behind an unrehabilitated footprint, including toxic and radioactive water and other damage.

“The total liability in this case is estimated to be R890 million, whereas the rehabilitation fund stands at R44 million – an amount that is completely inadequate to address liabilities,” the report stated.
“To remedy these problems, the commission has recommended the establishment of a new ‘superfund’, similar to the model used in the United States, where mining companies are required to deposit money into a trust fund to enable government to fix pollution problems.”


The report found that the mining industry in South Africa has largely been characterised as a compound and migrant-based system in which workers are easily exploited and housed in crowded conditions. “Such exploitation resulted in atrocious living conditions. Miners were also separated from their families, resulting in the breakdown of family structures.”

Although access to adequate housing is now a socioeconomic right, new mines often lead to a significant influx of migrant workers – often to the detriment of local communities. “Whereas South Africa’s population between 2002 and 2011 grew by approximately 16%, the population growth along the Platinum Belt in Rustenburg and Madibeng, for example, grew by 40% over the same period, with the population in Rustenburg increasing from 300 000 to around 1 million.

“The rapid influx places an incredible strain on municipal planning and on the ability of municipalities to deliver basic services. Insufficient housing gives rise to the development of informal settlements, whereas old and aging bulk infrastructure is unable to cater for increased need. As a result, many people live in deplorable and unsafe conditions without access to basic services.

“Many miners and surrounding communities live in housing made up predominantly of shacks, with no lighting or electricity, no refuse collection and oftentimes, no water connection or adequate sanitation facilities.”

Before building new mines, companies have an obligation to ensure local communities are not prejudiced by an influx of migrants, which could exacerbate housing backlogs.

In situations where new mines could exacerbate existing housing shortages and access to water, sanitation, electricity, roads and other services, the Department of Mineral Resources should reject applications for mining licences.

Part two:

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