What’s gold really worth?

Gold, even though its price may rise and fall, has always been a viable and fairly safe refuge for investors the world over. However, this international commodity may hold a death sentence for the miners who excavate the precious metal. This death sentence goes by the name of mining silicosis … JACO DE KLERK reports.

Silicosis is a respiratory disease caused by inhaling silica dust, a naturally-occurring crystal found in rock beds, which is crushed during mining into dust. Symptoms include shortness of breath, a chronic cough, fever, chest pains, difficulty in breathing, hoarseness and weight loss. This medical condition, with no known cure, can often lead to tuberculosis and ultimately death. Treatment options currently focus on alleviating the symptoms and preventing any further complications.

According to South Africa’s National Union of Mineworkers (NUM), 5 396 miners died from respiratory illnesses in the period between 2003 and 2009. But, according to mine law expert and director of Brink Cohen Le Roux Attorneys, Willem Le Roux, the number of people diagnosed with silicosis has ultimately dropped over the years. Speaking at a health and safety seminar in Johannesburg recently, Le Roux also said that a zero fatality target would be unrealistic in the mining industry. According to Le Roux, it is important to compare the mining sector’s acceptability of risk with other industries. In an actuarial assessment conducted by Le Roux, he states that the fatality rate in mining was 0,34 people per 1 000 employees in 2009, as opposed to the fishing industry’s 0,53 per 1 000 in the same period.

By way of comparison, the rate was at 0,5 in the public transport sector and 0,15 in construction. Le Roux also stated that the number of new cases of silicosis totalled 1 694 in 2009, compared with 1 778 in 2008, but the number had increased from 572 in 2004.

The South African government, despite the increase since 2004, has committed itself to the reduction of silicosis by 2015 and the elimination thereof by 2030, in line with the Global Programme for the Elimination of Silicosis of the International Labour Organisation and the World Health Organisation.

But the light is starting to shine even brighter at the end of the tunnel. The Constitutional Court opened the door for a large number of employees to sue mining companies for contracting silicosis and other diseases. This opportunity presented itself when the Court ruled in favour of Thembekile Mankayi (also see article on page 14 of this issue), an employee at mines owned by AngloGold Ashanti between 1979 and 1995. The ruling, which occurred during March, stated that Mr. Mankayi could sue the company for damages if the employer failed to provide a safe and healthy environment.

The Court explained that Mr. Mankayi was entitled to these claims because his occupation was covered by the Occupational Diseases in Mines and Works Act. Mankayi, who unfortunately died the day before the ruling, sued AngloGold for R2,6 million. The Constitutional Court also stated that workers who qualified for state benefits for occupational-related diseases could also receive additional compensation from their former mining employers.

Another mine, Anglo American South Africa, is also involved in a silicosis suit which dates back to 2004 and involves 18 miners. The miners, of which four have already passed away, are suing the company on the basis of failure to provide them with sufficient masks or other protective gear. The case may appear in court next year.

Anglo is also proposing, without admitting any liability, to the claimants’ lawyers that it will pay for the healthcare of the remaining miners until the court case is completed. NUM is also putting its full support behind silicosis sufferer’s claims, which may make things even more difficult for Anglo American.

Royal Bank of Canada (RBC) analysts are estimating that it may cost them $100 billion to settle all potential silicosis claims. This assumption was made by RBC on the basis that there are 300 000 claimants, who would each sue for at least R2 million. Mining executives are, however, disputing this estimate with their own assumption. They say that it is only speculation at this stage – and they don’t know whether the suits will even be successful.

But one thing is certain: the mining silicosis story is far from over…