RICHARDS Bay Minerals managing director Werner Duvenhage told journalists yesterday that getting the business back on track following a three-month-long closure is going to be a painful process.
Richards Bay, a unit of globally diversified mining company Rio Tinto, said on Tuesday that it was preparing to resume operations after reaching an agreement with its community leaders. The mine ground to a halt amid escalating tensions within its host community at the end of June.
“Our key focus right now is restarting our business after being down for almost three months. It is going to be a painful process to restart, but we have tried to maintain our assets as much as possible, but I am sure we are going to have stumbling blocks along the way, which we will not have anticipated,” said Duvenhage.
Duvenhage believed that money flows in community trusts were behind the unrest which led to the closure of the business.
“We think that monies related to community activities is a contributor to the unrest during this time. We really wanted to deal with that. Internally we are not aware of other matters that could lead to violence within our business,” he said.
On Tuesday, Richards Bay Minerals and community stakeholders reached an agreement to support enhanced governance and controls of community trusts, together with greater transparency. Following the signing of the agreement, the company said it had released more than R130 million to the community trusts established for each of the communities surrounding the mining and smelter operation.
Duvenhage said funds were withheld after the company became concerned when community trust funds no longer issued annual financial statements on a regular basis, and when they finally were released the majority of them were qualified.
Duvenhage said the company wanted a commitment that the community would reform the trust and on Tuesday the agreement was reached to do so.
The business was closed a month after general manager Nico Swart was ambushed and murdered while on his way to work. The company decided to declare force majeure with its clients as a result of the recent deterioration in the security situation.
“What we know is we had Nico’s murder. The next week we had violent protests in one of the communities where we mine. We did not shut the business immediately after Nico’s murder, but we clearly saw an escalation of violence,” he said.
Last year Richards Bay Minerals’s direct economic contribution to the country was R8 billion, including the salaries and wages for more than 5 000, as well as the mining royalties and local and national taxes it paid.
BUSINESS REPORT