THOUSANDS of former gold miners suffering from silicosis have launched a class action suit in South Africa‚ in what could prove the final nail in the coffin of the country’s battered but vital mining sector. Already buckling under huge operational costs and seemingly endless labour unrest‚ about 30 gold-mine operators were last month slapped with litigation by thousands of their former employees.
The plaintiffs — mostly black migrant labourers from nearby countries and South Africa’s far-flung mountainous villages of the Eastern Cape region — allegedly contracted the lung disease while drilling gold-bearing rocks.
Already theirs is the biggest class action in South Africa’s legal history‚ involving more than 17‚000 complainants. And the list is growing by about 500 people each month‚ according to lead attorney Richard Spoor.
That stream could very well become a torrent. Academic calculations estimate about 280‚000 people have worked in gold mines for a minimum of 10 years‚ long enough to inhale dangerous levels of silica dust.
When exposed for long to excessive amounts‚ the dust gets locked in the lungs and permanently scars the organ‚ resulting in silicosis‚ a disease that has no known cure.
Sufferers are more susceptible to other lung diseases such as tuberculosis. Research has shown that 20%-30% of all gold mine workers have contracted silicosis. Black miners working in often unsafe conditions during apartheid were hardest hit.
Activists argue the disease is preventable‚ if only operators invest in making the mines safe. The disease has virtually been wiped out in other gold mining countries such as Australia‚ the US and Britain. "But in South Africa we continue to hear of thousands each year‚ who have been disabled by this disease‚” says Mr Spoor‚ whose oldest client started working in 1965.
If the mineworkers are successful‚ it could cost the industry millions of dollars‚ but experts warn it could also cost jobs.
"There will be no golden goose anymore‚” warned mining consultant Peter Major. "There may be some feathers‚ some intestines and maybe a beak (but) there will be no goose‚ no golden bar ever again.”
The suit could also be an epoch-ending event for a country whose very foundations were built on the gold reefs and diamond deposits.
"Do you really want to put mining companies down forever in a country that has 30% unemployment?” asked Mr Major.
"We are almost getting to the stage now where it looks like ‘let’s kick the guy‚ let’s put the boots to him now that he’s down on the ground’.”
A watershed Constitutional Court ruling in 2011 which allowed sick workers to sue their employers has emboldened the gold mineworkers and opened the floodgates. The mass suit — filed last month and likely to be heard within months — is sure to play havoc with investors’ sentiment. But so far there has been no flight by investors.
Emerging market analyst Peter Nomura believes the case may not immediately move markets. Markets "may well change‚ particularly if there are large payouts”‚ he says.
Depending on commodity prices‚ operators may in the long run consider selling their companies‚ he says. But some of the larger operators‚ already facing a few cases brought by smaller groups of mineworkers‚ are not taking the latest case lightly.
"The application raises a number of complex legal and factual issues‚ and AngloGold Ashanti plans to respond through the appropriate court procedures to defend the case on its merits‚” says spokesman Alan Fine. "Silicosis is an issue that not only challenges the mining industry‚ but South Africa as a whole.”
The case may yet shift into new directions. Some argue the government should be charged with complicity as it earns royalties and collects taxes. - Sapa