By: Christy van der Merwe Published: 13 Jul 07 - 0:00 - Mining Weekly

The Xolobeni mining right application has been accepted by the Department of Minerals and Energy (DME), and now Transworld Energy and Minerals (TEM), a wholly owned subsidiary of Australian mining junior Mineral Commodities (MRC), and their com-munity-based partners, Xolco, await the decision of the DME as to whether or not a mining licence will be granted for its proposed operation along the Wild Coast.

Because of the scenic location of the Xolobeni project area, which is situated between the Mtentu and Mzamba rivers in the Bizana district of the Eastern Cape, near Port Edward, the proposed mining activity is being met with resistance from a number of local community members, as well as environmental organisations, which feel that the fundamental principles of sustainable development would be violated given the current mining proposal.

“Being granted a mining licence in South Africa these days is a very difficult process; the mineral resources act is a complicated piece of legislation and meeting the criteria therein takes a lot of work. Mining may historically have had a bad reputation, but those times have changed. It is not about the breakdown of African families, degradation of land and creation of ghost towns anymore. Companies can no longer ruin lives and the environment with impunity [as] they did in the past. You cannot, within the current legislation, mine an area and not rehabilitate it, and social and labour plans ensure that local communities must benefit from operations,” TEM GM John Barnes tells Mining Weekly.

The situation along the coast is deteriorating into a public mud-slinging affair, with people from both sides - those in favour and those opposed to mining - accusing various individuals of bribery and intimidation.

Location, location, location

The Xolobeni mineral lease area extends along a 22-km stretch of coastline and about 1,5 km inland, and covers an area of 2 866 ha. The expected life of mining operations is said to be between 20 years and 25 years, and it is estimated that the area contains the tenth-largest con- centration of titanium-producing heavy minerals, rutile, zircon and ilmenite, in the world. TEM has decided that the mining will be a dry mining operation because it is a relatively small area being mined, which is flexible in terms of grade and tonnage mined, and between 13-million tons and 15-million tons of minerals will be mined a year.

Environmental groups argue that ecotourism would be a more sustainable way of creating jobs and wealth in the area. There is a business plan for a project involving the construction of six rondavels on the Inyameni estuary, which is seeking investment. This is proving difficult and it is possible that the proposed mining in the area could dissuade ecotourism investors from detailing plans; however, previous attempts at creating jobs and ecotourism ventures in the Xolobeni area have not been successful. It has been said that, should mining take place, the 22-km stretch would effectively have to be taken off the tourist map, as tourists would not like to trek through an area being mined.

TEM maintains that about 30%, or 855 ha, of the lease area will be mined, and ecologically sensitive areas, such as the frontal dune system, beaches, rivers, wetlands and estuaries will be protected to ensure that mining does not interfere with these areas. TEM has stated that the company will start mining in already degraded areas, and, after mining takes place in each separate cell or block, it will rehabilitate the land to a better condition than it is in today.

There are areas where topsoil has been removed, exposing the reddish mineral-rich sands, and this is where mining will start. There is, however, some contention as to how these areas became exposed, with TEM saying it has been caused by unsustainable agricultural practices over the years, and nongovernmental organ- isation (NGO) Sustaining the Wild Coast (SWC) stating that degradation occurred due to natural processes as there are strong winds that blow through the area.

TEM is confident that the area can be success- fully rehabilitated and refers to examples of similar projects where rehabilitation is taking place, such as Richards Bay Minerals, Namaqua Sands and various examples in Australia. There is, however, disagreement over what is considered a ‘success’, with environmental associations questioning the long-term sustainability of the rehabilitation projects.

NGOs on the other hand, maintain that the DME does not have the capacity to police the mining operations once they start, and are emphatic that this ecologically important area, which is one of the top 34 biodiversity ‘hot spots’ in the world, will be ruined should mining start. They state that mining and ecotourism are two mutually exclusive activities and that the com- munity will not benefit from mining in the area.

“At Xolobeni we are not talking about an area that is pristine anyway. There is environmental degradation taking place, huge arid patches of land are developing, estuaries are silting up because of wind blowing sand from degraded areas into these estuaries and wetlands, and the local community is burning the dense shrubbery along the beaches and taking it for firewood for survival in winter. We are talking about the scenic beauty of poverty, where people die before reaching the clinic because the roads are so bad,” Xolco chairperson Nomangesi Malunga tells Mining Weekly.

What will come of it?

Project outcomes detailed by TEM indicate that the proposed project will include the establishment of access roads to the site and mining area, the establishment of water supply and pipelines, the establishment of power reticulation and power supply to the area, the establishment of a wet separation plant, the establishment of a tailings storage facility, construction of a dry minerals separation plant, and the establishment of a smelter for beneficiation near Mbizana. Overall, it is expected that the project could generate about 560 direct jobs.

NGOs have raised objections over these figures, saying that a significant amount of the jobs will be at the smelter, the construction of which is not yet a certainty. The mining com- pany has, however, stated that plans for the smelter have not yet been fully detailed as it has not yet been granted a mining licence, but should this happen, it is almost certain that a smelter will be built in the area. This is also in line with growing calls for the beneficiation of African minerals in Africa.

NGOs have further concerns that the construction of a smelter in the area will one day justify the mining of ecologically sensitive areas, so as to make available minerals for the smelter so that it can continue to operate.

TEM is adamant that it does not want to cause discord among the local community, and, in fact, aims to positively turn around an area where there is a high degree of illiteracy and poverty. “We want to make sure that equity participation, skills transfer and development come from the local community. In addition, we want to make sure that this project goes beyond the 22 years life-of-mine, and has a legacy of skilled people and development of secondary and tertiary industries around the area,” adds Maxwell Boqwana, Boqwana Loon & Connellan attorneys director, and immediate past codirector of Xolco - the black economic-empowerment (BEE) company with a 26% stake in the Xolobeni mining operation.

SWC raised funds to enable social worker John Clarke to represent a number of local community members and assist them in gaining access to information. Clarke has fears that MRC or TEM will sell the mining rights once it has taken the project to the bankable feasibility stage, leaving the Xolco directors high and dry, with no delivery on the promises made to them by the mining company. “Then they would have to wait even longer for benefits to start accruing to the local community trusts that they have set up,” he adds.

Barnes responds to this by pointing out that the company has long been interested in mining the area, and has already started projects to benefit the community, such as training teachers for the local schools, and adds that the company would not invest so much into this project simply to abandon it.

“We have long-term sustainable development plans for after mining has ceased, which will encompass agriculture, tourism, and possibly others, like biofuel projects. We will have a broad-based programme of work, and, already, even when mining commences, will start a project to maintain and promote tourism through the Mtentu rest camps in the area, which are currently dilapidated and in need of repair,” affirms Barnes.

“However, no detailed project plans in this regard have been made available to stakeholders,” says Endangered Wildlife Trust director Dr Nick King.

Empowerment

The establishment of a BEE company to represent the local community with regard to the proposed Xolobeni project is generating heat among all involved in the project.

In 2003, MRC represented by TEM, entered into an agreement with the local Amadiba tribal community to establish a local community-based BEE partner, Xolco. The company is said to represent a number of community-based trusts, including a youth trust, a trust for the elderly, a tribal trust, a business trust, a cultural trust, and a women’s trust, representatives of which elected the company directors.

However, there are members of the local community saying that they were not involved in the election process, and NGOs are questioning the establishment of the company, saying that the founding directors of the company do not even live within the local community. TEM, in response, has said that when setting up the empowerment company, it was important to liaise with people from the community, who have the community’s interests at heart, but who have also business savvy.

TEM states that the agreement is designed to ensure a direct flow of future benefits from development of the Xolobeni project to flow to the local community, and the establishment of the company develops a comprehensive social plan, which deals with education, health, and the infrastructural needs of people.

TEM and Xolco insist that protocol and public participation processes have been adhered to in the establishment of this BEE company; however, Clarke comments that the mining com- panies need to go beyond mere compliance. “This is what the International Council on Mining and Metals guidelines recommend. It is an inter- national mining industry standard. Unfortunately, in its current form, the Mineral and Petroleum Resources Development Act places no obligation on the DME to independently verify the wishes of the community in respect of any mining operations. I am certain that the majority of people in the area do not want the dunes mined, and I am now hearing even promining people voicing concerns about the way in which the agents of the mining company are behaving to gain support,” he adds.

Xolobeni resident and SWC member Sinegugu Zukulu states that there is not a single village in the area that is in support of the mining going ahead. “The entire thing has been approached without giving people a platform to give their views,” he adds.

“Xolco has five directors, and they will decide where the wealth will be distributed; the potential for corruption is horrendous. It is simply not a good structure because it is too easy to buy off support. Who is going to police the transparency of Xolco?” asks King.

In April this year, Clarke, advised by human rights attorney Richard Spoor, lodged a complaint with the Human Rights Commission. The complaint was lodged on behalf of the client group from the local community that Clarke represents, on the basis of violation of the right to information relevant to the exercise or protection of the right to have the environment protected for the benefit of present and future generations.

The objection from NGOs, apart from environmental concerns, is that the local com- munity should be benefiting more from the mining operation should it take place. A 26% stake through a company with five directors is the minimum prescribed by law and is viewed as too little.

Interestingly, it has been reported by Mining Weekly that Minister of Minerals and Energy Buyelwa Sonjica last month divulged that industry, labour and government were in initial talks on an amendment to the Mineral and Petroleum Resources Development Act, which might see mining companies operating in the country required to sell a stake in their operations to the surrounding communities. This would be additional to the 26% BEE equity holding by 2014 required by the Act. The DME has not been able to respond to whether or not this amendment will affect the Xolobeni mining rights application process in particular.

Although NGOs are not saying that the community wants a bigger stake in mining operations, they are saying that the majority of the community is insistent that it does not want mining to take place under any circumstances.

At the moment, the public participation process held by TEM has resulted in the development of a scoping document for the environmental- impact study. Meetings are being held in the area by parties either in favour of, or opposed to, the mining operation. Now, all that is left to do is await a decision from the DME.

Edited by: Martin Zhuwakinyu
Coupon No.: MW0112198

Posted on July 13th, 2007
Filed under: Newspaper and Media