ESG

SA gold miners pay up US$400m in silicosis, TB class action

Major South African gold miners have agreed to pay R5 billion (US$400 million) to a class action settlement representing mineworkers that contracted silicosis and tuberculosis, the first settlement of its kind in South Africa.

Mineworkers will be compensated for silicosis and TB contracted while mining gold underground

Mineworkers will be compensated for silicosis and TB contracted while mining gold underground

In a joint statement, the Occupational Lung Disease Working Group — representing African Rainbow Minerals, Anglo American SA, AngloGold Ashanti, Gold Fields, Harmony and Sibanye-Stillwater —  and law firms Richard Spoor, Abraham Kiewitz and the Legal Resources Centre, which represented the claimants, said they had settled the class action Thursday.

A R4 billion compensation fund was also being set up to compensate families of miners who had already died from silicosis.

The settlement follows a long legal battle by mineworkers to receive compensation for illnesses believed to have been contracted over years due to health and safety negligence.

"This is an historic settlement, resulting from three years of extensive negotiations. The agreement provides meaningful compensation to all eligible workers suffering from silicosis and/or tuberculosis who worked in these companies' mines from March 12, 1965 to date," the parties said.

All parties agreed a settlement was a fair outcome and preferable to a lengthy litigation process, with it allowing claimants to receive compensation and relief quicker.

Although signed, the settlement would not be complete until certain suspensive conditions were met, including approval from the South Gauteng High Court.

The parties expected the trust fund to be set up in the September quarter, although they were all aiming to ready all necessary mechanisms and systems at the earliest opportunity.

"Mining companies have made significant progress in underground dust prevention over the years, but all parties believe that there should be continuing improvement in underground dust management techniques so as to ensure that silicosis and tuberculosis cease to be occupational health risks in South African gold mining," the parties said.

Harmony and AngloGold Ashanti both said in a separate statements that they were pleased at the conclusion of the highly complex negotiations.

They both welcomed "the settlement which represents a fair outcome for claimants and a sustainable outcome for the companies".

Both Harmony and Anglo said they looked forward to the agreement being ratified by the High Court, as only then could they fully withdraw the appeal in the Supreme Court of Appeal of the High Court's class certification judgment delivered in May 2016.

They noted that all involved companies announced last year the amounts they had set aside for the settlement.

AngloGold said in its 2017 financial results that provisions for the silicosis claims, as well as retrenchments, had caused headline earnings to fall to $27 million from 2016's $111 million.

SP Angel said this meant the settlement should not affect future earnings of the involved mining companies, with further financial implications only possible if more claimants came forward than were provided for.

"We wonder if this might now set a precedent for other miners and works suffering from Black Lung (coal mining) and other conditions caused by the workplace," the broker said.

 

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