SA Gold Miners May Face $100B Liability

Bloomberg, Mike Cohen and Carli Lourens

South Africa's highest court on March 3 ruled that ex-miners can seek redress from companies that operated under an apartheid-era system to use cheap black labor in the world's deepest mines.

While the ultimate number of claims and their size is impossible to determine, mining companies may face a liability of as much as $100 billion.

Surveys of miners who worked in South Africa put the prevalence of the disease at between 17% and 32% among older miners with longer service. Even now, workers hack gold-bearing ore out of seams as deep as 2.4 miles (3.8 kilometers). Rock temperatures rise to as high as 55 degrees Celsius (131 degrees Fahrenheit) and humidity is close to 100%.

"Mineworkers, and black mineworkers in particular, were really treated like a commodity," Richard Spoor, Mankayi's lawyer, said. "A steady supply of healthy young men came to our mines to be used, consumed, and, once they were broken, literally to be discarded."

The government is planning talks with mining companies about securing improved compensation for workers without them having to resort to litigation, Mineral Resources Minister Susan Shabangu said about the silicosis cases.

"Compensation is not adequate," she said. "In fact, it's a real joke."

The Chamber of Mines said its members are improving working conditions and new silicosis cases should be eradicated by 2014. Mining companies have worked to pump more compressed air from the surface into mining shafts to improve ventilation and have installed better systems to monitor dust levels.

Mining companies have known for decades that silicosis is preventable, yet were reluctant to incur the expenses of providing adequate underground ventilation, Spoor said, which makes them liable for damages.

"The million-dollar question is how big that settlement will be," Esterhuizen said.