March 4, 2016 at 7:00 am
In response to the dramatic restructuring plans announced by Anglo American on 16 February 2016, in particular plans to sell off its South African coal and iron ore assets, the Centre for Environmental Rights (CER) sent an open letter to Anglo American CEO Mark Cutifani on 29 February 2016 calling for transparency, as publicly committed to by Anglo American, and public participation in the transfer of any of its mining rights.
The CER addressed the letter in the context of the woeful legacy of unrehabilitated mining operations in South Africa, and the common trend for large companies to transfer mining rights to smaller companies which cannot comply with the rehabilitation obligations attached to the rights.
Anglo American was one of the companies assessed by the CER in our September 2015 report Full Disclosure: The Truth about Corporate Environmental Compliance in South Africa. Full Disclosure revealed that over the period assessed (2008-2014), many of South Africa’s biggest listed companies, praised for their “socially responsible” credentials, had in fact committed serious breaches of environmental laws, and that the level of disclosure of these breaches to shareholders was in most cases extremely poor.
In relation to Anglo American, Full Disclosure raised concerns regarding the paucity of data on the company’s environmental non-compliances and incidents available to its shareholders. We also noted that what little information was provided raises serious concerns, in particular in relation to unauthorised water discharges and other water contamination.
Because of the significant environmental impacts of Anglo American’s mining operations, the CER has called on Anglo American to inform us – and the public – of the company’s plans for public participation in relation to the various sales forming part of its restructuring in South Africa, and to undertake to publish on its website copies of the documents relating to these sales and transfers.
South Africa has seen a trend of larger mining companies selling mines, usually with significant environmental liabilities, to smaller mining companies after most of the reserve has been exhausted. The trend sees these smaller companies going insolvent shortly after the sale – before any of the prescribed rehabilitation of environmental damage has taken place. Environmental disasters seen in the Pamodzi and Blyvooruitzicht cases (as detailed in our open letter) serve as stark reminders of the importance of transparency and public participation in the sale of mining rights.
Transparency and public participation in this process are imperative to ensure that the environmental liabilities of these operations are not in due course added to the burden of the 6000 derelict and ownerless mines already borne by the South African public. The cost of closing these mines and treating polluted water has been estimated at close to R60 billion.
Anglo American acknowledged receipt of our letter on 1 March 2016. The company has indicated that it is preparing a response to our letter.