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Rio Tinto declares force majeure at its Richards Bay operations

Citing escalating violence.
Image: Bloomberg

Rio Tinto Group declared force majeure on customer contracts at Richards Bay Minerals after escalating violence forced it to suspend activity at the minerals sands operation in South Africa.

Managing Director Werner Duvenhage said the company is prioritizing the safety of its 5 000 workers at RBM, which exports titanium dioxide slag, used to create ingredients for products including paint, plastics, sunscreen and toothpaste. The closing of Rio’s only South African business follows the death last month of RBM manager Nico Swart, who was shot on his way to work.

“It has become impossible for us to run the business,” Duvenhage said by phone. “We won’t go back until it’s safe for our people.”

The suspension of operations at RBM is a blow to the South African government’s efforts to attract new investment. Violence around RBM forced the operation to shut temporarily in 2019, with work subsequently halted on a $463 million expansion project.

In recent weeks, mining equipment and infrastructure have been destroyed and access roads blocked. South Africa mining operations frequently are dogged by community protests, which relate to issues ranging from poor municipal services to labor conditions. Duvenhage said there have been reports that the latest violence may be connected to youth unemployment.

The violence around mining communities, including the burning of equipment and the intimidation of mine workers, hurts South Africa’s reputation as an investment destination, said Minerals Council South Africa, an industry lobby group for bigger producers.

“The closure of mining operations due to security concerns negatively impacts on production, employment and investment, and will ultimately have severe adverse economic and social consequences,” the council said in a statement.

RBM’s furnaces are currently being run on low power as they can’t be shut down completely. The company is engaging with both regional and national governments to get a better understanding of the cause of the violence, Duvenhage said.

South Africa’s mines and energy ministry didn’t respond to a request for comment.

© 2021 Bloomberg

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What a mess, where is government.

What government??

Shut shop. Load your things and go and do business in a country where people appreciate investment.

This is going backwards fast and wont turn around again. Its finished!!

Fully concur !!

A blue brigade is on its way to the mine HAHahaha

Just wait don’t close it!

Useless government aka ANC! Step up!!

Ah the joys of investments in this country.
First government fleece you out of 30% of you investment and then you have to pay 20% more to tenderpreneurs for services, materials and supplies.
Along come the friendly neighbors and demand 15 % of your employment and when they get it they will strike for an increase.

If they do not get what they want they destroy what you have built up.

Dear ANC Government I hope these employees understand that YOU are responsible for their future unemployment.

If a higher level of security effectiveness is not affordable then the business model is a fail. You need to know your risk environment. This is Africa, getting darker again. Now far too risky on all fronts to take a chance without being able to take effective control. This is stage 4 where stage 5 is total collapse of civilisation and apocalyptic mayhem.

End of comments.

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