Dying to mine

2014-02-23 14:00

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Illegal miners risk their lives to bring in very little for themselves. Moyagabo Maake speaks to one of them and then follows the golden trail to see where the precious metal finally ends up

Mineral Resources Minister Susan Shabangu, in various speeches, said illegal mining costs the economy R5.6?billion a year. The East Rand Illegal Mining Forum, established to help stop the practice, said this area alone accounts for R1.6?billion a year in lost gold revenue.

But these heady amounts do not always end up with the miners. Kose, one of the miners rescued from an abandoned shaft in Benoni last week and then arrested, told City Press he made R30 for a pinch-sized nugget of gold. He would not use his full name.

He could not provide the average amount he earned, but said if he was lucky, he could dig five such nuggets in a week.

“Even if you work hard, you might get just one gram of gold,” he said from behind the bars of a cell at the Benoni police station where he and a group of others were being held pending deportation to Lesotho.

Captain Papa Matsie, a police officer at the station, said other miners had been charged with illegal mining and trespassing and were out on bail.

Kose supports eight family members with his earnings. He said the miners worked in groups?–?he went underground with four people of varying nationalities.

“I’m the only one who made it out. I don’t know if the others are still alive,” he said.

Media reports on Tuesday showed two bodies were recovered from the shaft, but there could be more as emergency personnel were unable to go underground because of the dangerous conditions.

Kose said the miners found buyers in the nearby townships of Lindelani and Kingsway, where they rented backyard rooms.

These townships are sandwiched between two mine dumps, a stone’s throw from the Benoni CBD and about 30km east of Johannesburg.

It is in Kingsway that a buyer meets City Press. Going by the nickname of Khompela, he is one of the few people who owns cars in the impoverished township. He would not provide his real name.

Khompela said he did not buy any nuggets from the miners because he only dealt in grams. He bought an average of 50g a day for which he paid R330 each. The purchases were made after extracting the gold from pieces of rock, a process carried out by illegal smelters and refineries in the township which he calls “the firms”.

We are at the entrance of a former firm where broken glass dots the overgrown grass outside the house. Miners carry the rocks in bags of mealie meal to avoid detection. Firms are paid about R50 a load.

Reza Patel, executive chairperson of the Benoni community policing forum, said the work was not difficult to do as the chemicals used could be bought from any pharmacy or hardware store along with the tools used.

“If you buy small amounts of chemicals, they can’t ask you what you use them for,” he said.

“The equipment is legally available anywhere. The buyer can even smelt [the gold] himself if he wants. The mark-ups are huge. People are making big money.”

Khompela said he was one of 40 buyers in the area who sold the gold to “the whites”.

“Some of them are not white-white, they can be Brazilians, for example. They are gold dealers. We go to their shops and sell to them.”

Describing how the dealers found the township buyers, he said they knew there was illegal mining going on in the area and would come to the “location” to find the buyers looking for this gold.

The price the dealers pay depends on the quality of the precious metal. For 24-carat gold, Khompela said these dealers could pay R400 a gram and R470 if it was “clean”.

“Some of the gold contains little impurities like copper and silver. Pure gold fetches a higher price,” he said.

Khompela earns an average of R18?000 a month from buying and selling the gold. How does he keep the origins of the cash from the bank?

“I am a businessman. I own another small business and bank all of the proceeds together,” he said.

The trail runs cold here as Khompela refused to share details on any of the people he sold the gold to, except to say that some of them took the gold back to their countries. But research by the Institute for Security Studies (ISS) provided some clues.

In a 2001 paper, Peter Gastrow, a consultant, found there were criminal networks involved at the top level, but very few have been arrested.

“The criminal networks that are involved have reached a level of sophistication that makes their successful investigation and prosecution very difficult,” said Gastrow.

“This is a problem that law enforcement agencies face across the world.”

According to the paper, some of the gold was smuggled out of the country in private jets flying to Europe where it apparently landed up in refineries there.

In a 2007 paper, the ISS found that local syndicates were connected to larger international operations.

This theory seems to be supported by other sources which speculate that most of the proceeds from precious metals crime were laundered through Switzerland and that 90% of smuggled gold was transported there before it was distributed to other markets.

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