South African gold producers have agreed to a R5 billion class action settlement with law firms representing thousands of miners who contracted the fatal lung diseases silicosis and tuberculosis, officials said.
The most far-reaching class action settlement in South Africa follows a long legal battle by miners to win compensation for illnesses they say they contracted over decades because of negligence in health and safety.
The six companies involved had already set aside the settlement amount in provisions in previous financial statements and it should not affect future earnings, unless the number of claimants who come forward exceed the current provisions.
Estimates for the number of potential claimants range from tens of thousands to hundreds of thousands. Three smaller gold producers are not party to the settlement and the class action against them will continue.
The class action was launched six years ago on behalf of miners suffering from silicosis, an incurable disease caused by inhaling silica dust from gold-bearing rocks. It causes shortness of breath, a persistent cough and chest pains, and also makes people highly susceptible to tuberculosis.
Almost all the claimants are black miners from South Africa and neighbouring countries such as Lesotho, whom critics say were not provided with adequate protection during apartheid rule and after it ended in 1994.
The settlement is broken into three parts and a trust will have 12 years to track down the claimants and distribute the funds. This is not an easy task as many are in remote rural areas and may not have proper medical and other records.
Out of the R5 billion, R845 million will be used to cover the administration expenses of the trust over the 12 years, and R370 million will be paid to the law firms. The remainder is for compensation. The final total will depend on the number of claims processed.
“If there are more claimants than the actuaries have estimated, the R5 billion number could increase. If there are less it will decrease,” said Graham Briggs, who chaired the Occupational Lung Disease Working Group, a unit put together by the six companies.
In addition to the anticipated settlement payout, there is also close to R4 billion in a compensation fund which companies have been contributing to for years.
The companies involved are Harmony Gold, Gold Fields, African Rainbow Minerals, Sibanye-Stillwater, AngloGold Ashanti and Anglo American South Africa.
“Our numbers differ slightly from the industry. We think there are more claimants and the numbers will be higher than what they anticipate. While we differ slightly with the industry, we think it’s all in the same ball park,” said Richard Spoor, one of the lawyers representing the mine workers.
It is the first class action settlement in South Africa involving so many companies and claimants.
“The settlement is the product of commercial negotiation and compromise, but we believe this is a beneficial settlement,” said Carina du Toit, a lawyer with the Legal Resources Centre, one of the law groups representing the workers.
The settlement still needs approval by the Johannesburg High Court before being implemented. – Reuters