Illegal miners plague gold industry in SA

JOHANNESBURG – Lured by gold, they live like furtive moles in abandoned mine shafts for weeks at a time.

Once they climb hundreds of metres back to the surface, illegal miners in South Africa sell their plunder to criminal gangs, reaping more in a day than legitimate miners do in a month. “It’s madness going into some of these places, you’ve got falling rocks – very, very dangerous circumstances,” said Willie Beckmann, security manager at Harmony Gold , the world’s sixth biggest gold producer.Other jobless people spend hours sifting through mountains of mine waste from old mines for tiny amounts of gold dust.Despite a renewed battle against mine theft in the world’s largest gold and platinum producing nation, it remains a lucrative activity worth hundreds of millions of dollars a year.Mining firms are geared up to fight the battle on many fronts, from gathering intelligence on possible raids of their processing plants to installing new high-tech gadgets to detect hidden stashes on miners.South African gold mines were estimated to have lost 35,6 tonnes of gold (1.14 million ounces) per year to illegal mining, according to a study by the Institute for Security Studies (ISS) published in 2001.That is nearly twice the total domestic output from South Africa’s fourth biggest producer DRDGOLD last year and equivalent to a tenth of South Africa’s total gold production.At current market prices, the annual stash would be worth around half a billion dollars.The ISS is drafting an updated report with new estimates on theft, but some experts think the figures are unlikely to be significantly lower.MAZE OF TUNNELS The problem of miners furtively heading underground is worst in the Free State, west of Johannesburg, which is home to a maze of interconnecting tunnels that link a series of operating and abandoned gold mines.”They might enter 20 km away from where they want to be and then move (underground) towards where they want to be,” Beckmann said.With luck, a rogue miner can earn in one swoop several times the monthly salary of legitimate miners, who take home around R2 500 to R3 000 a month.Besides pilfering gold, the illegal miners pose health and safety dangers as they camp out underground with no toilet facilities and sometimes confront mine employees.”Some of these guys operating underground are very aggressive and armed …With a lot of methane gas underground, if you fire a shot you can cause a disaster,” said Steve Conradie, head of asset protection at Anglogold Ashanti, the world’s second biggest gold producer.Beckmann said it was difficult to estimate how many rogue miners were underground at any one time, but during nine months up to March 2005, Harmony caught 302 of them.SIFTING THROUGH THE DUMPS Beckmann believes most illicit gold comes from hundreds of abandoned gold dumps, where mostly unemployed people spend hours sifting through mine waste.This is not regarded as a serious problem since these people rarely pose a safety risk and are only digging into waste ore disposed by mines.”The West Rand is covered with gold dumps and at many of them there’s no security…Although they are a nuisance, we don’t pursue them, we deal with them on an ad-hoc basis,” Beckmann said.”These guys have got no income.It’s nothing for a guy to work 10 hours to get one gram of gold and maybe get R50 to R60 for it.”Security chiefs put a heavy focus on securing their processing plants and the bullion end-product.A theft in these areas can be much more costly than miners sneaking off with ore.Anglogold has installed high-tech sensors at mine exits to pinpoint miners with hidden stashes.The high returns, however, spur the thieves to keep coming up with new tricks.”These guys taking the product from you, they don’t sleep at night.They’re coming up with innovations all the time to relieve product from you,” said Conradie.The lucrative returns have enticed a network of criminals, with a vast number of low-level underlings who run hidden refining operations in their homes and sell to local buyers.They in turn pass the product on to regional buyers and then a select few kingpins with international connections, who sell gold to contacts in Switzerland, Britain, Thailand and India.Company security personnel have teamed up with police investigators in the National Investigative Task Team to target the organised crime bosses who smuggle both gold and platinum.Last October, police swooped on a gang accused of stealing and smuggling US$30 million of platinum.The elite FBI-style Scorpions unit nabbed the suspected ringleader of the operation as he arrived on a flight from Britain, where the South African citizen had been living.”It’s a very lucrative market, and as long as there’s a market for the metals it’s going to continue,” Beckmann said.- Nampa-Reuters”It’s madness going into some of these places, you’ve got falling rocks – very, very dangerous circumstances,” said Willie Beckmann, security manager at Harmony Gold , the world’s sixth biggest gold producer.Other jobless people spend hours sifting through mountains of mine waste from old mines for tiny amounts of gold dust.Despite a renewed battle against mine theft in the world’s largest gold and platinum producing nation, it remains a lucrative activity worth hundreds of millions of dollars a year.Mining firms are geared up to fight the battle on many fronts, from gathering intelligence on possible raids of their processing plants to installing new high-tech gadgets to detect hidden stashes on miners.South African gold mines were estimated to have lost 35,6 tonnes of gold (1.14 million ounces) per year to illegal mining, according to a study by the Institute for Security Studies (ISS) published in 2001.That is nearly twice the total domestic output from South Africa’s fourth biggest producer DRDGOLD last year and equivalent to a tenth of South Africa’s total gold production.At current market prices, the annual stash would be worth around half a billion dollars.The ISS is drafting an updated report with new estimates on theft, but some experts think the figures are unlikely to be significantly lower.MAZE OF TUNNELS The problem of miners furtively heading underground is worst in the Free State, west of Johannesburg, which is home to a maze of interconnecting tunnels that link a series of operating and abandoned gold mines.”They might enter 20 km away from where they want to be and then move (underground) towards where they want to be,” Beckmann said.With luck, a rogue miner can earn in one swoop several times the monthly salary of legitimate miners, who take home around R2 500 to R3 000 a month.Besides pilfering gold, the illegal miners pose health and safety dangers as they camp out underground with no toilet facilities and sometimes confront mine employees.”Some of these guys operating underground are very aggressive and armed …With a lot of methane gas underground, if you fire a shot you can cause a disaster,” said Steve Conradie, head of asset protection at Anglogold Ashanti, the world’s second biggest gold producer.Beckmann said it was difficult to estimate how many rogue miners were underground at any one time, but during nine months up to March 2005, Harmony caught 302 of them.SIFTING THROUGH THE DUMPS Beckmann believes most illicit gold comes from hundreds of abandoned gold dumps, where mostly unemployed people spend hours sifting through mine waste.This is not regarded as a serious problem since these people rarely pose a safety risk and are only digging into waste ore disposed by mines.”The West Rand is covered with gold dumps and at many of them there’s no security…Although they are a nuisance, we don’t pursue them, we deal with them on an ad-hoc basis,” Beckmann said.”These guys have got no income.It’s nothing for a guy to work 10 hours to get one gram of gold and maybe get R50 to R60 for it.”Security chiefs put a heavy focus on securing their processing plants and the bullion end-product.A theft in these areas can be much more costly than miners sneaking off with ore.Anglogold has installed high-tech sensors at mine exits to pinpoint miners with hidden stashes.The high returns, however, spur the thieves to keep coming up with new tricks.”These guys taking the product from you, they don’t sleep at night.They’re coming up with innovations all the time to relieve product from you,” said Conradie.The lucrative returns have enticed a network of criminals, with a vast number of low-level underlings who run hidden refining operations in their homes and sell to local buyers.They in turn pass the product on to regional buyers and then a select few kingpins with international connections, who sell gold to contacts in Switzerland, Britain, Thailand and India.Company security personnel have teamed up with police investigators in the National Investigative Task Team to target the organised crime bosses who smuggle both gold and platinum.Last October, police swooped on a gang accused of stealing and smuggling US$30 million of platinum.The elite FBI-style Scorpions unit nabbed the suspected ringleader of the operation as he arrived on a flight from Britain, where the South African citizen had been living.”It’s a very lucrative market, and as long as there’s a market for the metals it’s going to continue,” Beckmann said.- Nampa-Reuters