Bloomberg News

Anglo American Miners May Seek $117,000 Each in Disease Suit

January 09, 2013

Workers who contracted silicosis after working on mines that were owned by companies including Anglo American Plc (AAL) may seek at least 1 million rand ($117,000) each in damages, a lawyer representing them said.

The amount could be reached “quite easily” for each person who got the lung disease, said Richard Spoor, the lawyer who filed an application against 30 companies including Anglo American (AGL) South Africa Ltd., a unit of Anglo American for class certification of an action for damages in a South African court last month. The petition was made on behalf of workers and dependents of those who died from the illness. There may be more than 200,000 former miners with silicosis throughout southern Africa, he said.

“Whether we are able to bring Anglo American and other parent companies to the table or not will have a significant impact on the size of any final award or settlement,” Spoor said by phone yesterday. “The question of the parent company liability is a very difficult area of law because of the principle of limited liability.”

Spoor won a 490 million-rand settlement from Gencor Ltd. in 2003 after the company was sued by workers from asbestos mines it controlled. Exposure to the fibers can cause respiratory disease, asbestosis, lung cancer and mesothelioma, a cancer. South Africa’s highest court in March 2011 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 Ashanti Ltd. (ANG), a company whose predecessor was formed in 1997 when Anglo American merged its gold mines.

Ownership Changes

Spoor’s application names 30 gold-mining companies that owned or operated 78 gold mines from 1965 to present.

Mergers, acquisitions and delistings over the years have left former workers with nowhere to go to seek compensation, Spoor said. Gold Fields Ltd. was created in 1998 by combining the assets of Gencor and Gold Fields of South Africa Ltd. AngloGold was formed when Anglo American’s South African business bought out minority shareholders of its gold units in 1997.

Anglo American ceded control of AngloGold in April 2004 when the gold miner bought Ghana’s Ashanti Goldfields Ltd., creating AngloGold Ashanti.

Gold companies including AngloGold deny liability.

“The application raises a number of complex legal and factual issues, and AngloGold Ashanti plans to respond through the appropriate court procedures to defend the case on its merits,” Alan Fine, a spokesman for the gold company, said in an e-mailed response to questions.

African Rainbow

Gold Fields spokesman Sven Lunsche declined to comment.

African Rainbow Minerals Ltd. (ARI), the diversified South African mining company controlled by billionaire Patrice Motsepe, bought Anglovaal Mining, one of the respondents in the application, in 2004.

“It’s too soon to discuss the outcome of the matter as none of the merits of the matter has yet been established, let alone tested in court,” Pieter Coetzee, the legal executive for African Rainbow, said in an e-mail.

Anglo American South Africa has been served with papers issued out of the South Gauteng High Court, Johannesburg, and is one of 30 companies named as a respondent party, spokesman Pranill Ramchander wrote in an e-mailed response to questions.

The number of gold miners in South Africa peaked at 489,000 in 1983, according to the Department of Mineral Resources. The mines employed 145,561 people in 2011, according to the Chamber of Mines, which represents mining companies.

Silicosis Causes

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.

South Africa’s gold mines caused about 1,140 new cases of silicosis annually from 1980 to 1990, David Davis, a Johannesburg-based mining analyst at SBG Securities Ltd., wrote in a 2011 report on the possible accountability of such cases.

The potential liability for the gold-mining industry could be as much as $146 million, he wrote.

An increased public exposure may raise the amount of liability to gold companies and it seems like the lawyer is recruiting, Davis said in an e-mail yesterday. The “likely result is an out-of-court settlement as per the asbestos case,” he said.

President Steyn

Lawyer Richard Meeran of law firm Leigh Day & Co. is suing mining companies on behalf of former workers who contracted silicosis separately. The firm brought a case against AngloGold in October, and represents miners who are involved in a court battle for compensation for former workers at the President Steyn mine since 2004.

Anglo American had varying amounts of shares in the operation in the Free State province between 1960 and 1980. Pamodzi Gold Ltd. bought President Steyn from Thistle Mining Inc. in 2007, and and Harmony Gold Mining Co. purchased Pamodzi’s Free State assets in 2009.

Abrahams Kiewitz Attorneys, based in Cape Town, in August filed a suit in the South Gauteng High Court on behalf of about 3,000 miners seeking compensation from AngloGold, Gold Fields and Harmony.

“We know that between 20 and 30 percent of the miners have silicosis, but we don’t know how many are alive,” Spoor said.

The mines depended on migrant labor from countries including Lesotho and Mozambique.

“While progress has been made, we recognize that silicosis-related compensation must be reviewed to address inadequacies in the system as identified by the Constitutional Court,” South Africa’s highest court, AngloGold’s Fine said.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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