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  • Are the mining companies trying to escape on the cheap?

    By Campaigns | October 9, 2017

    ACTSA’s position has always been that the the settlement reached in March 2016 on behalf of 4365 ex-gold mineworkers in regard to legal actions against Anglo American and AngloGold Ashanti should be seen as a benchmark and not just a landmark. We continue to assert that the broad terms of any settlement of the ongoing class action should be at least as good as the terms of the March 2016 settlement.

    The six mining companies have now announced the amounts that they have set aside in relation to a possible settlement of the class action. We have calculated that the total of these provisions is approximately $371.2 million. How would this compare to the terms of the March 2016 settlement?

    The settlement reached in March 2016 saw R464 million, which at the time was $30.1 million, paid into a trust for distribution. While not all ex-gold mineworkers will receive the same amount (assuming that claimants with silicosis can prove they worked on Anglo American or AngloGold mines for at least two years, payments depend on the extent of their illness and their age), this equates to $6896 per person.

    Importantly, a further amount was paid to assist the trust to enable payment of statutory compensation to claimants who qualify for it, and Anglo American and AngloGold also agreed to fund the running costs of the trust and all medical evaluations. Moreover, relatives of deceased ex-gold mineworkers who meet the criteria are included in this settlement.

    On the surface, it would appear that the $371.2 million total set aside by the mining companies could compensate 53,828 ex-gold mineworkers – if the $6896 per person figure is a benchmark. Yet, as we outlined in our recent briefing paper Coughing Up, estimates of ex-gold mineworkers with silicosis run into the hundreds of thousands. For example, in 2005 the Government of South Africa’s Department of Labour estimated 480,000 cases of silicosis among ex-gold mineworkers in Southern Africa. A 2010 study estimated there were 288,000 cases of compensable silicosis in South Africa. As a result, paid occupational lung disease compensation for gold mineworkers has been estimated to run into the billions of US dollars. Experts agree that many ex-gold mineworkers with silicosis in Southern Africa have already died but are there no more than 53,828 of them still alive?

    Yet on closer examination the situation is even worse than at first suspected. ACTSA has learnt that it is likely that the $371.2 million figure is inclusive of all other costs. As noted above, under the March 2016 settlement, costs relating to implementing the settlement (including providing medicals, distributing funds and supporting payment of statutory compensation to those who qualify) were treated separately and are borne by the mining companies. Moreover, in this case there are likely to be significant costs incurred due to locating ex-gold mineworkers with silicosis, as many have gone back to their homes in rural areas of South Africa or in surrounding countries. Finally, it is not clear if relatives of deceased ex-gold mineworkers with silicosis will be eligible to receive any compensation under any settlement of the class action.

    All in all, it looks like the mining companies are looking for a bargain as they look to close the book on their appalling treatment of their former employees. Can we stop them from escaping on the cheap?

    Sunit Bagree is ACTSA’s Senior Campaigns Officer

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