Impala Platinum (Implats) said a year of disruptions and missed production targets meant it could be forced to lay off nearly a quarter of its 4,500-strong workforce at its Marula mine.
At the heart of unrest at the operation is unhappiness in six communities that are part-owners of a chrome business set up by Implats to ensure that financial benefits flowed into the region.
However, little of the money generated by the chrome company appears to have reached the broader community, with funds allegedly embezzled. This echoes stories around the country of empowerment transactions benefiting a few instead of broader communities, or communities fracturing amid a scramble for economic gain.
Implats set up a chrome business to process Marula’s tailings after a decline in platinum group metal prices in 2013, which meant the communities’ 9% stake in the mine would not generate any meaningful cash flows for them. The stake in the mine was converted to half-ownership of the cash-generating chrome business.
"The department has found it necessary to intervene in the matter and has met with all the stakeholders on a few occasions," said Department of Mineral Resources’ spokeswoman Ayanda Shezi.
"The unhappiness from communities is as a result of the structuring of the chrome company and alleged embezzlement of funds from community trusts," she said.
The department would be having further meetings with Implats and members of the affected communities.
"A mechanism to prevent further possible misappropriation of funds has already been identified and it is expected it will soon be effected."
The six communities set up a holding company, which held a 50% stake in the chrome business, with Implats and Marula holding 30% and 20% respectively.
Implats has warned unions and staff associations it could lay off up to 1,000 people to accommodate the new mine design
With sharply higher chrome prices in 2016 and increased illegal chrome mining in the area around Steelpoort in Limpopo — prompting some groups in the communities to demand access to the chrome processing plant to treat illegally mined chrome — the issue of where the financial benefits have gone to and who has benefited burst into the open early in 2017. There have been reports of community leaders’ homes and cars being burnt in recent days.
The Marula mine was recently replanned so that it could profitably produce 90,000oz of platinum a year, but with unrest, blockades of access roads, burning of mine vehicles and other interference, the mine will not achieve that target this year.
Implats would now rethink its strategy, lowering output to about 75,000oz a year by closing shallower parts of the mine and focusing on the new, low-cost area — needing fewer employees.
Implats has warned unions and staff associations it could lay off up to 1,000 people to accommodate the new mine design.
In the meantime, work at the chrome processing plant has been stopped after a request by the department to suspend the flow of cash to the communities until the unhappiness has been addressed. About R200m worth of chrome has been stockpiled, half of which is owed to the communities.
"We are nowhere close to resolving matters with the communities so it’s unlikely the chrome plant will start again anytime soon," said Implats spokesman Johan Theron.
"In fact, things have escalated just recently, with houses and cars burnt.
"For a country so desperately in need of jobs this is just sad. A lot of people in these communities live in abject poverty, so when they see that a small group has become affluent and they themselves don’t see any benefits from this chrome business, then they become very angry. We are caught in the middle of it," he said.
Implats had submitted fully audited accounts of the chrome business to the department as part of its efforts to resolve the unhappiness and address concerns within the communities regarding the flow of money to the community trusts.
Theron declined to say if money had been misappropriated once funds had been paid to community trusts and structures that make up the ownership of the holding company.
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