Several multi-billion-rand mining projects in South Africa are on ice because criminal activity is putting the industry at risk, Minerals Council CEO Roger Baxter said this week.
“I am aware of several multi-billion-rand mining projects that will not be given the go-ahead because of issues related to crime. I cannot specify which companies; I do not want to do that. Because of the criminal mafia and other factors some companies are not prepared to go ahead with certain projects until some of these issues are resolved.”
Baxter, who was speaking during Anglo American’s fifth Sustainable Development Goals Accountability Dialogue in Johannesburg this week, said crime would likely be life threatening to South Africa’s mining industry if it was not addressed. He said levels of illegal mining, copper theft and procurement mafia tactics were increasing.
Crime had a major effect on the ability of the sector to keep employees safe. Illegal miners had infiltrated existing mines and others operated in disused mines, costing the country billions in tax revenue, Baxter said.
“We have a paradox. The paradox is that you can’t grow if you have a burgeoning crime crisis, but you can’t solve the burgeoning crime crisis if you are not growing, and that is the paradox we face and we grapple with as business and as government.”
Baxter said the mining industry was spending R2.5bn a year on security. Coal producers were spending R20m a month on rooting out copper theft syndicates targeting the country’s coal corridor and crippling Transnet’s freight rail services.
“We look at Eskom as being the heartbeat of the economy, and veins and arteries being rail. If the heartbeat is low because Eskom is not delivering and the rail system is not delivering what we need it to deliver, it basically is reducing the life of the body of South Africa, which is our economy.”
Baxter said mining was critical to South Africa’s economy, accounting for 50% of the country’s export earnings and 20% of GDP if all multipliers were included. The industry paid R150bn in salaries last year, with 1.3-million jobs created, but crime was undermining its potential.
This is an attack on our democracy. This type of attack should not be happening in a country like South Africa
— Minerals Council CEO Roger Baxter
“The mining industry and the country are under siege because of the deteriorating security and crime crisis that we face. When I say we are under siege I mean literally.
“As an example, in 2019 we had 22 armed attacks on precious metals facilities in South Africa by gangs of between 20 to 30 people armed with high-calibre rifles, a bit like the cash in transit heist story. This year we had two big ones. The last one was a gang of 115, again armed with AK47s. They attacked the Cooke shaft of Sibanye-Stillwater. The firefight lasted four hours. This is an attack on our democracy. This type of attack should not be happening in a country like South Africa.”
Criminal mafia tactics were having a dampening effect on investment in the mining industry, said Baxter.
“Companies simply cannot pull the investment trigger on a number of projects that I am aware of because of security related issues linked to the procurement mafia. The procurement mafia often masquerades as business forums.”
Business needed to lead from the front in addressing crime. “I have never paid a bribe to police officers. I have been stopped several times by the police, who ask can I have a coke, can I have R50.
Amount paid by the mining industry on salaries last year.
— IN NUMBERS: R150bn
“We as business have to lead from the front. We have done that by standing up to corrupt ministers,” he said, referring to the council’s snub of former mineral resources minister Mosebenzi Zwane, who was blamed for helping the Gupta family acquire Optimum Coal from Glencore.
Anglo American Platinum (Amplats) CEO Natascha Viljoen, speaking at the same event, said it was impossible to grow business without the rule of law.
“If there is one area in business in which we do not have a mandate, it is the rule of law. While we can argue to privatise and help to grow Transnet, and we can argue that we can play our role as independent power producers to generate power, as far as rule of law is concerned there is only one place for that to happen and that is the state.”
Viljoen said that at the beginning of the year Amplats had stopped its operations in the far eastern limb of the bushveld complex for “a good two weeks” due to mafia tactics.
“We could not do any work because of the procurement mafia masquerading as business forums using the frustrations of unemployed youth in the far eastern limb to stop economic activity,” said Viljoen, adding that police helped resolve the situation.
Business Leadership SA CEO Busi Mavuso said crime was not only a government problem. “If South Africa becomes another failed African state, it will mean that as a state we would have failed and as business we would have failed.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.