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Missing millions from Lonmin fund prompts community pay reform

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Johannesburg - Government plans to reform how local communities manage and spend mining royalties after a corruption probe found that R611.46m paid into by Lonmin [JSE:LON] had been exhausted.

Almost all the money received by the Bapo Ba Mogale community over the past 20 years was spent, with the biggest amount used to build a palace for a tribal leader, Public Protector Thuli Madonsela said on July 5. The palace cost at least R80m despite an initial budget of R20m.

“We need to develop a policy mechanism that can prevent it from recurring anywhere else whilst also dealing with the remedies of what has happened with the Bapo,” Obed Bapela, a deputy minister at the Ministry of Cooperative Governance and Traditional Affairs, said in an interview.

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