AngloGold, Gold Fields Threatened as Lawyer Seeks Plaintiffs

AngloGold Ashanti Ltd. and Gold Fields Ltd. are among South African producers threatened with costly court battles as rights groups enlist thousands of former miners with work-related lung disease for a class-action suit.

“We are doing the legal research and at the same time identifying ex-gold miners who are potential claimants,” Richard Spoor, a human-rights lawyer who has won settlements worth millions of dollars from mining companies, said in a phone interview Aug. 16 from Maseru, Lesotho. “Our target is about 30,000 people before the end of the year.”

Spoor has allied with civil-rights groups to identify potential plaintiffs, opening offices in Umtata in Eastern Cape Province and Maseru, while planning others in areas that supplied labor to South African mines. Several hundred former miners have signed up without being approached, he said.

“A first draft of our application for certification of a class-action lawsuit will be ready this week,” Spoor said. “It will likely be filed out of the Johannesburg High Court.”

Spoor won a 490 million-rand ($68 million) settlement with Gencor Ltd. in 2003 after the company was sued by South African workers from asbestos mines it controlled. On March 3, South Africa’s highest court cleared the way for him to seek damages from gold companies by ruling that former miner Thembekile Mankayi could pursue a 2.7 million-rand claim against AngloGold.

AngloGold Rejected

The court rejected AngloGold’s argument that Mankayi, who died a week before the ruling, wasn’t entitled to seek damages because he had already received a one-time 16,316-rand state payout. Mankayi contracted silicosis and tuberculosis after working at the Vaal Reefs mine, which AngloGold ran following the company’s creation by Anglo American Plc in 1998.

“We are talking to AngloGold about the Mankayi matter,” said Spoor, who represented the former miner. “We are looking for some kind of resolution on compassionate grounds. I went down to see his family in the Eastern Cape a few weeks ago and there is terrible hunger and hardship, small children who are suffering. I am really trying to expedite a settlement.”

AngloGold, the third-largest miner of the metal, says it complied with state regulations and isn’t liable for damages. The company isn’t discussing any possible settlement, Alan Fine, a spokesman, said yesterday by phone from Johannesburg.

Silicosis is caused by prolonged exposure to dust in mines, leaving irreversible scar tissue in lungs and making it hard to breathe. It also heightens the risk of contracting tuberculosis.

Negotiated Settlement

An estimated 196,560 former miners from South Africa and 84,240 from neighboring states working under a system of migrant labor hadn’t been compensated for occupational lung disease, according to a study published in 1998 in the Stockholm-based Journal of Mineral Policy, Business and the Environment. Surveys of long-serving gold miners who worked in South Africa put the prevalence of the disease at 17 percent to 32 percent.

The government is calling for a negotiated settlement.

“My approach is that we’ve got to take the matter away from the courts,” Mining Minister Susan Shabangu said in an interview in Cape Town yesterday. Litigation is “not good for the mining industry. We have been engaging with all the parties. I can’t say we are even close to a resolution.”

The number of gold miners in South Africa has fallen to about 160,000, according to the Chamber of Mines, which represents mining companies. That compares with a peak of 489,000 in 1983, Department of Mineral Resources figures show.

Shares Falling

“We’re working through all the processes,” AngloGold Chief Executive Officer Mark Cutifani said on Aug. 4. “It’s a manageable issue, but it will need government, the unions and businesses to come together to find the right solution.”

Gold Fields, the fourth-largest producer of the precious metal, said it’s assessing the potential effect of a claim. “We are reviewing our current processes to determine what additional measures can be taken to further mitigate the risks to employees of contracting silicosis,” it said in an Aug. 11 statement.

Harmony Gold Mining Co., Africa’s third-biggest gold miner, said it’s unclear whether it can be held liable for damages.

“Claimants would need to provide evidence proving that silicosis was contracted while in the employment of the company and that it was contracted due to negligence on the company’s part,” Johannesburg-based Harmony said in an Aug. 15 statement. “No estimation can be made for the possible obligation.”

AngloGold fell 0.7 percent to 324.72 rand by the close of Johannesburg trading, Harmony dropped 5.2 percent to 86.90 rand, and Gold Fields rose 1.6 percent to 120.60 rand. The price of gold in London gained 1.6 percent to $1,853.15.

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