The first South African project to bring illegal miners into the formal fold has been plagued by violence in diamond capital Kimberley, dealing a major blow to national efforts to stem a booming illicit trade.
The project was launched 18 months ago in Kimberley, the site of a 19th-century diamond rush lured fortune seekers from the world over. Mine owners granted more than 800 unlicensed or informal small-scale miners the right to legally mine around 1 500 acres of diamond-rich waste fields.
The aim of the government-backed scheme was to curb illegal mining and black market trade in diamonds and serve as a blueprint for future attempts elsewhere, not only in the diamond sector, but potentially also manganese, gold and chrome.
The project has been hit by violence, with informal miners not part of the scheme attacking infrastructure and members of the newly licensed co-operative, according to mine owner Ekapa Minerals which is running the initiative.
The failure to date of the pilot scheme is a blow to wider corporate and government efforts to bring South Africa’s thousands of informal miners, or “zama-zamas”, into the mainstream to boost productivity and curb crime.
Illicit mining and mineral trading cost around $1.5 billion a year in lost sales, taxes and royalties, according to a 2017 estimate by industry group the Minerals Council and sees criminal networks exploit vulnerable workers struggling to make ends meet.
While government always acts in an advisory capacity, it may now be forced to take a more active role in the project, the first to attempt so-called formalisation in the mining industry.
Asked about the results of the Ekapa project, minerals minister Gwede Mantashe told Reuters: “I’m not. We have to assign somebody to work on it.”
He did not elaborate on what would be done, adding: “I am not happy because informal mining must be in the mainstream of mining, it must not be on the periphery.”
The project’s problems demonstrate the perils of piecemeal formalisation in a country where regulation of small-scale mining lags its African counterparts.
‘THEY COME WITH WEAPONS’
Ekapa and Petra Diamonds, then a part-owner of the mine, launched the initiative last year at Kimberley in Northern Cape, hoping to address theinflux of zama-zamas – a Zulu-derived word which loosely translates as “keep trying”.
As much as R6 million ($400,300) worth of diamonds were taken by illegal miners each month, Ekapa estimates.
In a bid to stem that, the company formed 836 miners into the Batho Pele mining co-operative and gave them a licence to mine.
Eighteen months later, the track record is not promising.
Illegal miners not part of the co-operative have stolen fences, petrol-bombed Ekapa trucks, blocked access roads and sabotaged a waste pipeline, shutting down its plant, according to Ekapa.
Ekapa security teams were attacked with knives, slingshots, rocks, petrol bombs and, in one instance a hunting rifle the company said.
Ramping up its defences against illegal miners drove Ekapa’s security costs up to around R3 million ($200,160) before the project began and the company is again beefing up security.
It resorted to using alternative, longer routes for vehicles, adding a heavy financial burden, said Ekapa Minerals CEO Jahn Hohne, in an interview at Kimberley headquarters.
A police spokesman said records show 22 criminal incidents linked to illegal mining across Ekapa’s property and the area mined by Batho Pele between March and October this year, including attempted murder and three serious assaults.
Members of the co-operative, who cannot afford formal security, say they are also a target.
“The problem we encounter is from other zama-zamas. They want to enter this thing with force,” said Batho Pele member Victor Taku.
“They come with weapons, others come with firearms and others come with spades.”
The 44-year-old paid his son’s university fees with money made mining.
With joblessness at an 11-year high and the economy in distress, that income is out of reach for many South Africans.
DEARTH OF DATA
The Ekapa project’s woes show the urgent need for government to provide clear policy on small-scale or “artisanal” mining using rudimentary techniques, campaigners say.
In contrast with other African countries such as Mali, Democratic Republic of Congo and Tanzania, South African law has no provisions for this.
“Our legislative framework is missing in action when it comes to artisanal and small-scale mining,” said David Perkins, an economist at Mining Dialogues 360, an NGO.
Efforts to bring illegal mining into the mainstream are hindered by lack of accurate data about how many are involved, what income they generate and work conditions.
“We have so many people we don’t know where they come from. That is the challenge,” said Northern Cape police commissioner Lieutenant General Risimati Shivuri.
Pontsho Ledwaba,a researcher at Wits University in Johannesburg, said there could be as many as 100 000 informal miners across South Africa.
To plug this data gap the World Bank is pushing government to conduct a comprehensive study of artisanal mining and may even fund it, two sources familiar with the matter told Reuters.
“Accurate, reliable data is an essential first step to understanding the sector, recognising miners and formalising their work,” said a World Bank spokeswoman. “While the World Bank is in continuing dialogue with the South African government, no study of the sector is planned at this time.”
Should formalisation projects like that at Kimberley ultimately prove successful, another question looms longer term: What happens to small-scale miners when the resources run out and where do they go?
The diamonds in the Kimberley area mined by the co-operative, for example, are expected to run out in about five years.
“Our dream is, when we give the land back to Ekapa, 90% of us will have something in our pockets,” said 44-year-old miner Kagiso Nofomela, who hails from Kuruman.
“We must have money, cars, homes and our kids must be educated.”