The Australian mining company seeking the right to mine in Xolobeni in the Eastern Cape, has been lashed for its treatment of a community in the Western Cape where it has been accused of breaching its legal obligations.
In the small community of the Matzikama Local Municipality, along the West Coast and some 300km away from Cape Town, resentment still lingers against the Australian company, Mineral Commodities Resources (MCR).
In 2015, the company’s Tormin mine began operations with the rights to mine 15km of beach along the coast of the municipality. It mined minerals contained in the sand that are used in industry, including zircon and magnetite. Within three years, the mine had breached that 15km boundary to the point where a 17 metre cliff below it collapsed.
It was operated through MCR’s small South African subsidiary, Mineral Sands Resources (MSR).
A new report by Oxfam, which was spurred by the Xolobeni community’s resistance to MCR, has shown the extent to which the mine failed in its duties to assist people in the Matzikama local municipality, and how it breached the terms of its own mining license.
Oxfam found that MSR had not delivered on its community upliftment programme, despite making revenues of R750-million, and a profit of R150-million after tax in the 2017 financial year. MSR was also found to have not faced any accountability measures for extending its operations beyond what its mining rights allowed.
“It appears MSR’s modus operandi is to do what it wants to do, regardless of the regulatory environment within which it exists or the priorities of other role-players,” Oxfam said in its report.
What it takes to get a mining rights
According to Oxfam’s research, the problems with MCR’s mine in the Matzikama local municipality start with its Social and Labour Plans (SLPs).
In order for a mining company to acquire rights from the national department of mineral resources, it must submit an SLP that will state what community projects the company will undertake to improve the lives of the people who live there. Mining companies have to submit SLPs, according to the Mineral and Petroleum Resources Development Act, as a way to correct historical injustice and support mine workers.
But, research has proven that the SLPs aren’t always a priority.
“Given that hundreds of mines operate in South Africa (there are nearly 300 in the North West province alone), the potential for Social and Labour Plans [SLPs] to begin to address some of the socio-economic challenges that communities living near mines face, is obviously significant. But are they doing so? Sadly, evidence collected so far by a number of research institutions strongly suggests that they are not,” Oxfam concluded in its report.
In 2015, the national mineral resources department reported that 36% of mining companies are not reaching the targets set in their SLPs. The Western Cape has the highest number of non-compliance, with 87% of mine operations not abiding by their SLPs.
In the Matzikama local municipality, according to Oxfam, MSR began mining before the mineral resources department had even seen its SLP. According to its research, MSR acquired the rights to mine in 2012, but the mineral resources department had only signed off on its SLP in 2014.
The municipality has yet to see the SLP.
“… There is no relationship between MSR and the municipality… We don’t know what Tormin is doing. They don’t engage with us, we don’t engage with them. We’ve tried to engage on several occasions, but they don’t engage with us,” Matzikama local municipality town planning director Lionel Phillips said.
Tormin is now using 49% of the beach sand in its mining operation. Environmental authorities had initially given the company rights to mine only 5% of the beach sand, but in March 2017 the high court handed down a judgement saying the department of environmental affairs is no longer permitted to inspect mining operations.
The “tokenistic” projects
While MSR had budgeted for a number of projects, such as adult learning programmes and the upgrade of community centres, Oxfam says it remains unclear if these projects were completed and what was spent on them.
After a strike in 2015, the mine reacted quickly, however, to make improvements. Oxfam found that it completed one community centre, the Koekenaap Resource Centre, despite that it had prioritised another project to be completed before this centre.
The majority of the strikers at the time were from the Koekenaap community.
“According to the principal of Koekenaap school, the Resource Centre development did improve the relationship between MSR and the Koekenaap community,” the Oxfam report said.
The organisation said during the strike the company, admitting it had incurred “subdued production” because of the six-week long protest, began putting more money into helping the Koekenaap community.
But ultimately, Oxfam described Tormin’s social upliftment projects as “tokenistic” and “welfarist initiatives” where its own interests and cost-cutting measures were prioritised.
“Research indicates that MSR’s attitude towards community development is driven largely by considerations related far more to political decisions around public perception and economic decisions around cost minimisation than to any genuine commitment to the community within which they operate,” Oxfam said.
The Xolobeni 40 workers
The Xolobeni community is now in court in Pretoria to stop the mineral resources department from handing mining rights over to the company without their consent. It could be a landmark case that would force the government and mining companies to engage with affected communities before rights to mine are granted.
In court, lawyers for the community said much like the Matzikama Local Municipality, the Xolobeni people do not know how the mine will affect their lives.
“We are completely in the dark about what is going to happen. The community is going to suffer a loss. How is the community going to live? Where are they going to grow their food? None of that has been provided in this mining plan,” attorney Richard Spoor argued for the Xolobeni community on Monday.
In the West Coast, the mine had hired 40 labourers from Xolobeni “to try and influence the the community in Xolobeni to look favourably on the proposed mine”, Oxfam said.
These 40 workers from the Eastern Cape community told Oxfam that they had lived in fear on the West Coast mine, because the Matzikama Local Municipality people were competing for jobs.
““According to one ex-MSR employee, workers from Xolobeni were offered more training, were promoted more often, were not required to prove their qualifications, and were offered higher salaries than local employees from within the MLM [Matzikama Local Municipality],” Oxfam’s report reads.
The Tormin mine will one day face closure, the Oxfam report states, but it remains unclear if its former works and the communities it impacted will continue to gain some benefit from the social upliftment projects it began in the area.
For the Xolobeni community, the mine’s attempt to win them over has failed.
“Indigenous people have the right to have their say. We know here that this mining operation will be disruptive of the cultural lives,” Advocate Tembeka Ngcukaitobi, also representing the community, said in court.
“It may be to the benefit of my client but, if it is for their benefit, why should it be done without their consent?”
The Xolobeni case entered its second day at the Pretoria high court on Tuesday. The hearing is expected to continue on Wednesday.