Illegal mining costs SA R5bn per year

Cape Town – South Africa annually loses R5bn in illegal mining, Parliament heard on Wednesday. 

The Department of Mineral Resources briefed the Portfolio Committee on Mining on the prevalence of illegal mining in the country, saying the unlawful extraction of particularly gold, chrome and sand undermines South Africa’s economic prosperity. 

Mineral Resources Minister Mosebenzi Zwane, who attended the first part of the meeting, said Gauteng and the Free State are the worst affected provinces with regard to illegal mining. “The sites where these mining activities are taking place are surrounded by industrial and residential infrastructure.” 

The department’s acting director general David Msiza pointed out in a formal presentation that the recent death of three illegal miners at the George Harrison Heritage site in Langlaagte put the practice of illegal mining firmly back in the spotlight. 

In September, three miners died at the abandoned mine shaft west of Johannesburg after being trapped underground for days. 

Besides Gauteng and the Free State, illegal mining is also taking place in Mpumalanga (coal and gold), Limpopo (chrome and sand), the Northern Cape (diamonds), Eastern Cape (sand) and KwaZulu-Natal (sand). 

READ: Minerals Department clamps down on illegal mining

Msiza cited examples of law enforcement clamping down on illegal mining. “Arrests have been made, including top mine management personnel and state officials,” he said. Recently, R750 000 of cash was confiscated at an underground mine, while 9kg of gold was seized. Both incidences took place in the Free State. 

In addition, the Hawks arrested a man with unwrought gold to the value of R50m, concealed in the engine of a vehicle, who was smuggling precious metal from North West to Gauteng.

In the vicinity of Kempton Park near Johannesburg the police seized R45m from a business which had bought gold coins and mixed it with existing jewellery.  

Msiza said illegal mining has also led to an increase in violent crimes, including murder, as rival gangs fight each other for diminishing opportunities. There has also been an increase in human trafficking and illegal immigration, as most of the people who do the digging are from neighbouring countries. 

Although government is trying to improve regulation of the industry by giving mining licences to illegal and small-scale miners, the measures have had limited success. 

“In the Barberton area for example we have decided to legalise gold mining,” Msiza said. “We provided the miners with equipment and paid them small-scale mining salaries. All they had to do was sell the gold they produced to sustainable operations.

"But these people have realised they’re not making as much money as usual and now they’re starting to sell mine waste that they present as gold.”

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