January 10, 2008 Edition 1

Tony Carnie

A major announcement about a dune mining venture on the Wild Coast is expected from Buyelwa Sonjica’s Mining Ministry early next week, setting the tone for future development and conservation along the country’s wildest and best-preserved coastline.

Though Sonjica’s decision centres on the environmental impacts of industrial development - a matter which ordinarily falls under the jurisdiction of the environment minister - the final call in this case will be made by a ministry which has signalled its determination to act as both player and referee by promoting mining and regulating the environmental consequences.

While everything from the building of nuclear power stations, hazardous chemical factories, petrol refineries, steel mills or cellphone towers has to be assessed and authorised by the national or provincial environment ministries, mining remains a “special case” - despite long-standing attempts to exercise more stringent control over these highly destructive activities.

In this case, an Australian-based company has asked for permission to dig up a variety of commercially viable heavy mineral sands from the Xolobeni area, immediately south of the Wild Coast casino and holiday resort.

Transworld Energy and Mineral Resources (TEM) - a partnership between the Perth-based Mineral Resource Commodities group and a local black empowerment group (Xolco) plans to extract at least 320 million tons of ilmenite, rutile, zircon and leucoxene over the next 20 to 25 years.

While most of the minerals would be exported via Durban Harbour or sent to Richards Bay for further processing, the mining group has touted the proposal as the single biggest economic investment in the region and argues that economic benefits will be “cascaded down” to the local community in the form of 347 permanent jobs and a 26% share in dividends for Xolco’s directors and shareholders.

Critics, however, question the degree to which the poorest residents of the Xolobeni area would benefit and also fear that dune mining will wreck the potential of the Wild Coast to develop a long-term industry based on eco-tourism and conservation.

Given the fact that the Mining Ministry refused to sanction requests for a detailed comparison study between mining and tourism benefits as part of the environmental impact assessment, the chances are high that the Mining Department will simply rubber-stamp the mining project on Tuesday.

Sonjica also flew to Xolobeni last month at the request of President Thabo Mbeki to respond to the concerns of local pro-mining lobbyists who sent a petition complaining about delays in authorising mining.

The project also appears to have strong political support among prominent figures in the local ANC, municipal and regional structures - though strong opposition from several Xolobeni residents is also evident from documentation in the recently updated EIA report by a group of Johannesburg environmental consultants.

The owners of the Wild Coast Sun - who are considering a R200 million extended tourism project on the doorstep of the dune mining lease area - have also briefed attorneys because of fears that their new mining neighbours will exacerbate electrical and water supply constraints at the existing 300-room casino and golf resort.

Locally and internationally, environmental groups have charged that the mining threatens a globally unique botanical environment known as the Pondoland Centre of Endemism (with plant species found nowhere else in the world).

Rather craftily, it seems, the mining group has elected to gain the necessary environmental authorisation in bits and pieces, thereby circumventing the need to assess the overall impacts of the entire operation and a proposed heavy minerals smelter.

Initially, TEM proposed to build a smelter to beneficiate the heavy mineral sands on site, but late last year a decision was taken to put this on ice and apply for smelter authorisation once the mining and water rights were secured.

Yet even if TEM gets the legal nod from Sonjica’s ministry next week, a document reviewing the legal implications of the project suggests there could still be several hurdles which could delay or derail the venture.

For example, the company would still need to get a disposal permit for certain mining wastes “which may be problematic in view of the various types of wastes that are generated at a mine”.

The authors of the legal review do not specify exactly which wastes, but they make pointed references to disposal of radioactive substances under the Nuclear Energy Act.

The regional offices of the Mining Department in Port Elizabeth also highlighted concerns about the need for a specialist study to understand the radioactivity danger of uranium and thorium associated with the concentration and beneficiation of heavy minerals.

The department said the proposed smelter had to be assessed as part of the EIA because of the need to consider all the impacts of the project.

“This will prevent, for example, the situation where the establishment of the mine is used as a motivation for establishing the smelter irrespective of the potential environmental impacts associated with (a smelter).”

The department also said the environmental scoping report “only focuses on the positive impacts” of mining, and made it clear that TEM would need to examine negative social implications such as loss of fishing, resettlement of huts in the mining path, disruption of tribal and cultural lifestyles, loss and damage to water resources and possible violations of international environmental conventions.

A subsequent legal review argues that the mining area does not enjoy formal conservation protection status - though it would be necessary to apply for a special permit in view of a coastal conservation decree signed by the former Transkei government in 1992.

There are also references to the adjoining Pondoland Marine Protected Area; the so-called 4×4 beach-driving ban; heavy penalties for polluting or damaging surface and ground water and the new EIA regulations which took effect in July 2006.

The legal review cautions that several aspects of the mining proposal (including the removal of sand and indigenous vegetation) are “listed” activities which require full authorisation from Environment Minister Marthinus van Schalk- wyk, not just Mining Minister Sonjica.

Elsewhere, in the minutes of a focus group meeting with the Wild Coast Sun management, TEM General Manager John Barnes said the project would be viable without a smelter - but noted that a smelter had strong support from the Mbizana and Oliver Tambo municipalities.

Somewhat ominously, from an environmental perspective, Barnes noted that once a smelter was built it could carry on operating “for ever” as heavy minerals could be brought in from other areas.

Barnes is the former chief exploration geologist for Richards Bay Minerals, which failed in its attempts in the early 1990s to mine the sand dunes at Lake St Lucia.

This has heightened fears among environmental and tourism groups that the Xolobeni project will set a dangerous precedent to extend mining to several other parts of the Wild Coast, including the Wavecrest area.

Environmental consultant Nanette Hattingh has said further stages of the Xolobeni project could be linked to Richards Bay.

The project has also raised suspicion about the Australian company’s expertise in dune mining and whether it really intends to mine the area itself.

East London-based eco-tourism consultant James Jackelman has asked whether the Australians are acting in a speculative capacity.

“It is entirely plausible that (the Australians) will simply sell on the mining right once secured and leave the implementation implications to the ‘buyer’ of the right (eg Richards Bay Minerals),” he wrote in a letter to the consultants.

He also argued that the EIA had “simply brushed over” the purported community representivity of the Xolco empowerment group.

Alistair Ruiters, former director-general of the Department of Trade and Industry, and Rafique Bagus, a former adviser to Trade and Industry Minister Alec Erwin, signed an empowerment deal with the Australians in 2005, but this agreement was apparently terminated and Ruiters has not responded to further inquiries from The Mercury.

Very limited information is provided in the EIA about Xolco, which has a 26% share in TEM and is said to represent the interests of the Amadiba community at Xolobeni.

Xolco is said to represent the Xolobeni Hospitality Trust, the Xolobeni Furniture Manufacturing Trust, the Xolobeni Agricultural Development Trust, the Xolobeni Block Trust and the Xolobeni Campsite Trust.

The EIA says beneficiaries of the trusts are members of the communities of Xolobeni who belong to the trusts.

Keysha Investments, a wholly owned subsidiary of Xolco, is said to have issued preference shares to Mineral Resource Commodities and a group known as SGC.

Elsewhere, the names of some of the Xolco members are listed as Ntombekaya Luke, Josisa Sidumo, Christopher Nqwele, N Msabane and Zeka Mnyamana.

Another central figure in the pro-mining debate has been Zamile Madiba Qunya and his brother Basheen, who are listed as members of the ACCODA Trust, but it is not stated whether they have a direct stake in Xolco.

In a list of comments and concerns about the project, questions were raised by a Mr Phakathi, Mr Dlamini, Ms N Wayilahla, Mr Z Zitholbile and Mr J Mboyisa about the identity of Xolco members.

According to a written submission by the Legal Resources Centre, community member Sinegugu Zukulu has stated that Xolco does not represent the interest of the people of Xolobeni.

“Xolco is a private company formed outside of tribal authority. It is not a democratically elected organisation and is not entrusted to speak for the local community members.”

Community member Mzamo Dlamini raised concern that most public meetings were held outside the directly affected mining area, while Welcome Nogobela asked: “My main question is who is this person benefiting? Is it a community at large or is just one individual?”

Posted on January 10th, 2008
Filed under: Press Releases