A group of people demanding contracts to provide jobs and services to the R5bn Prieska mine project, intimidating and blockading the area, are symptomatic of a countrywide problem that must be stopped quickly, says Orion Minerals CEO Errol Smart.
The zinc and copper mine in the Northern Cape is restarting operations after it was mothballed in the 1990s. The protesting locals are demanding that the mine owners provide them with contracts to source labour in the community and to provide goods and services to the mine.
Orion, which is based in Australia and listed in Sydney and Johannesburg, will not bow to the threats and demands made at the project by what could be regarded as a “type of mafia”, Smart told Business Day.
The mine would draw most of its labour from the community anyway as well as spend the bulk of its R3.5bn annual running costs in the area on goods and service provision, he said.
The protesting locals are blocking roads with burning tyres and stopping access to the project as well as disrupting traffic to three nearby renewable energy projects and farms, Smart said, adding that during a recent march, men carrying automatic rifles and who were thought to be part of a local security company were part of the protest.
“People who are in positions of responsibility need to take responsibility now. It needs to stop,” Smart said.
The project timeline is not under threat and financiers who are close to concluding a funding agreement are undeterred by this flare-up, he said.
“This is just a teething problem, and we’ll get through it like all our peers have,” Smart said.
Legal action
“The danger is that this kind of behaviour has become normal in SA. What is scary for me is that when something like this happens CEOs phone each other for consolation and to share their experiences. This is how commonplace it has become,” he said.
Orion is aware of the identities of the people behind the protests and demands, and who are stoking community anger, and will take legal action against them “when it is appropriate”, he said, declining to name anyone.
While the police are present and keeping a lid on protests flaring into violence, they are not actively stopping the disruption, he said.
“The closer we get to the construction of Prieska the more this project looks like a dripping roast. When you have threats, intimidation and extortion to get contracts, then that’s akin [to] mafia-type behaviour. It’s such an indictment on SA,” Smart said.
Not only mining companies experience this kind of extortion, but construction companies have also come under pressure from criminal groups invading building sites to demand benefits.
The problem is of such concern that President Cyril Ramaphosa said in his 2020 state of the nation speech that these groups would come under attention from specialised police units.
Sibanye-Stillwater, the world’s largest source of mine-to-market platinum group metals (PGMs), is experiencing similar demands from a group called Community Task Team, which insists the company funnels “all the recruitments and business opportunities” through it.
The people behind the team that issued the demands on April 29 are not from the community and live in Johannesburg or Pretoria, the company said.
Sibanye has approved a R3.8bn project at the partially built K4 mine near Brits, North West.
Like Orion, Sibanye will not bow to the demands, said spokesperson James Wellsted.
Pan African Resources had a similar problem in 2017 at its R1.7bn Elikhulu tailings retreatment project at Evander, Mpumalanga, when a group of 30 people purporting to represent the community demanded benefits and the rights to provide labour and services or they would stop the project.
“It’s easy to cave in and say, yes, sure, joint venture with these guys, but that will compromise health and safety protocols at the mine and will completely undermine the rights of all stakeholders, the broader community, employees and shareholders,” said Smart.
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