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Stand-off in Prieska over Orion mining project

Business forum says Orion’s excluding the local community from business opportunities. ‘Not true’, says the company reviving the old Anglovaal copper-zinc project.
Orion says the Prieska Copper-Zinc Project involves ‘technically challenging tasks very few companies in the world can execute safely’. Image: Supplied

Prieska activist Ronald Februarie rejects the ‘mafia’ label used by Moneyweb against his Siyathemba Business Chamber and Community Forum, following violent protests at Orion’s operations in Prieska in the Northern Cape.

Read: Mining ‘mafia’ wants a piece of Prieska copper-zinc project in Northern Cape

Orion alleged that some protesters wielded semi-automatic weapons, and the violence forced the mine to approach the Northern Cape High Court for an urgent interdict to stop the protest action.

However, Februarie alleges that the interdict targeted many of the wrong people as the individuals wielding weapons were not community members.

“There was a protest across Siyathemba on the 29 April, including outside the mine gates. The black armed response team were not part of the protest, and we don’t know why they saw the need to deploy their guards to an entirely peaceful march,” says Februarie. “But it should also be pointed out that Orion had its own armed guards on site.”

Read: Force majeure at Richards Bay Minerals is a wake-up call for SA

There were also reports of local farmers being stopped and shaken down for money by armed protesters, though who these protesters purported to represent is unclear.

Protest action not limited to Orion

Februarie says Orion was one of several targets of protest between April 29 and May 10.

Other targets include the municipal council and renewable energy companies in the area.

The forum was protesting the lack of community involvement not just in Orion, but in renewable energy businesses located in the area.

In a statement issued to the media, the Siyathemba Business and Community Forum says it has engaged with Orion “to formalise its commitment and statutory obligations towards local doorstep enterprises, as well as the training and employment of locals”.

The chamber wants 30% of procurement going to local contractors and 40% joint venture participation in new business ventures and tenders.

Februarie says Orion has spent over R500 million on contracts “without any meaningful local participation, more specifically by the PDI’s [previously disadvantaged individuals], as defined in the South African Constitution”.

Orion’s response

Orion Minerals CEO Errol Smart says that of the R500 million referred to, only about R230 million was spent, mostly on exploration drilling, mine safety and underground access.

“These are technically challenging tasks very few companies in the world can execute safely in the time that we did,” says Smart.

He adds that the rest of the R500 million was expended on acquisition costs, corporate services (such as feasibility studies, legal and audit services) and financing costs.

Read: Prieska Copper-Zinc project proves SA mining is very much alive

“All our procurement is done in terms of BEE (Black Economic Empowerment) obligations as required by law,” says Smart.

“There is a reason why the Mining Charter gives BEE exemption for prospecting. We are not yet at the point of developing the mine, nor have we raised the capital for this. We would love to spend 30% locally in Siyathemba, we’d love to spend more than 30% locally, but some tasks cannot be fulfilled locally.

“But we have to get the mine going first, and we have to raise capital – and most of the money will likely come from overseas, and we have to demonstrate to these investors that their money is safe in SA.

“We are working on upskilling people, and recently enrolled 42 locals on a machine operator training programme. It takes time to get that going on a sustainable basis. We have a three-year programme ahead of ourselves during which we will train our future workforce before the mine even comes into production,” he adds.

Long-term project

“We are here for the long haul, and unlike the renewable energy construction projects, we are building a mine with the expectation of employing over 900 people for the next 20 years. Still, it will take time and capital investment to get that training done. It also does not help training people long before there is work for them.

“We only need the next generation of miners in two to three years,” says Smart.

“One can’t expect to turn a rural Karoo town 280km from its nearest underground mine into a major mining supply hub overnight.”

He adds: “We had to make safe the old Anglovaal workings, and very few companies in the world can do this work. We also had to find a drilling company that could mobilise 19 drilling rigs and complete the specialist task of deep directional in nine months.

“If we followed the recommendation of Ronald Februarie and the local business chamber, it would have taken us a year just to get the drill rigs organised. We don’t have time for that.”

Orion’s response dismissed

Says Februarie: “Orion’s response is the response of all big companies. The people of this community sit in an area with R13 billion invested in renewable energy and mining projects over the last five years, yet our economic situation remains unchanged.

“Not a single contract valued at R1 million or more has been awarded to local contractors.

“What is the problem? We don’t have the capacity in the local community because local people are employed in low skill functions such as security,” says Februarie.

“These people are not rising through the ranks. They stay as general workers.

“Orion knows it is about to enter into production, so they need to start training workers ahead of time.”

Orion willing to engage

Smart says the mining company is willing to sit down with community members to improve communication channels and lay out plans for community involvement.

“There is no question that our involvement in the area will be good for the community and job creation, and of course, we are going to provide skills training and create new career opportunities for local people.

“We have a problem with demands being made, which are ultra vires [outside the law] that demand that 30% of our procurement and 40% of all tenders and new business are in the form of JVs [joint ventures] with local businesses.

“This is not a requirement in law, and everything we do is in keeping with the law. We are a developing mine, but let us get to the point where we have secured our capital and made a start on the mine.”

Municipality partly to blame, says forum

Part of the forum’s ire is directed at the local Siyathemba Municipal Council, which signed memoranda of understanding (MoUs) with local businesses that fall short of what it says is needed.

“It is also our well-considered view that the current regime of MoUs at the municipality seems to have been signed without proper consultation with stakeholders in our community. This led us to engaging Siyathemba Municipal Council to review all [MoUs] and to ‘break new ground’ on current and future investments in Siyathemba Municipality,” says the chamber in a statement.

The forum says the problems in Siyathemba Local Municipality run deep.

“We are convinced that the municipal management concludes deals on behalf of the community without input from the business chambers and community forums,” it says.

“The bigger risk is the nature of the management structure at Siyathemba Municipality. There are no checks and balances to ensure transparency and fairness. This is usually caused by an ineffective and negligent accounting officer who has outsourced his or her duties as accounting officer to individuals and groupings within and outside of an institution.”

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Jip — Just another manifestation of the incredible sense of entitlement present in the SA population !!!
This is precisely the attitudes that cost us dearly in foreign investments.

“The chamber wants 30% of procurement going to local contractors and 40% joint venture participation in new business ventures and tenders.”

With reference to the above – that says it all – the “chamber”, without contributing a cent to the in the developing stage, already decided what they simply just want – after all, does this small community have all the know how / expertise / skills /equipment etc to specialize in mining technology, this whilst one of the core points in the mining industry is safety training, and security – for sure not the zama zama style of mining

These “investment forums”, “chambers” and “community forums” are nothing but a small group of envious and opportunistic looters who hide behind established names and structures in an attempt to lend credibility to their mafia activities. We find these characters in every community. They abuse the system for personal gain. Legitimate economic activity adds value for everyone, from consumers and investors to citizens in general. The mafia extracts value and destroys opportunities for everyone else. Their mining activity is focused on the extraction of opportunities from the community. They mine people, not minerals.

The established Business Chamber in out town invited some of these individuals to become members. They show interest until they realise that their membership will not lead to cash flow. Then they leave. It is clear that these parasites simply want to extort established businesses. This is a mafia operation and the legal system should act against them before they turn the entire economy into a mafia system.

I think the local Mafia (sorry the Business Community Forum) will be successful beyond their wildest dreams. They won’t end up with 30% or 40%…rather they will be getting 100%. 100% of NOTHING if the project fails

“Cutting off the nose to spite the face” is apt here

Seems that this one is doomed.

Mining venture capital.

Stupid people causing problems everywhere.

Similar attacks and Extortion have been launched against various small coal mine and washing plant operations in Mpumalanga, as well as against Richards Bay Minerals, which has forced their temporary closure, with their general manager also being murdered.
This behaviour is Not localised to Prieska, there is a pattern of increasing Lawlessness and Extortion developing against the mining industry across the country, at a tremendous cost to the Economic wellbeing and investment in South Africa.
I believe this is part of the Informal Expropriation Without Compensation which the ANC Government is Openly allowing to proceed with a thinly veiled plausible deniability, given that they have made no attempt, and shown no will to stop.
So after the Mining and Construction industry, who will be their next target?

The ANC “sells” the same assets over and over to different groups, as part of a vote-buying exercise. They promise jobs at this mine, then they sell BEE opportunities at the mine, then they enable the mining mafia to loot the employees and the BEE partners at the same mine, while they expect taxes from this mine to pay benefits to social grant recipients. They have sold the same asset to at least 4 different interest groups who paid for these assets with their votes. The actual owner looks at his title deed and wonders what he got himself into. Fraud is standard practice to the ANC. In South Africa, a title deed is a watertight contract with a fraudster.

Honestly, why would any foreign investor want to invest their hard earned cash into South Africa?

How is it possible that you need to approach the Northern Cape High Court for an urgent interdict to stop the already illegal protest actions?
Does one need an interdict to stop me from murdering my neighbor?
They should just stop this whole project if these are the kind of workers you are forced to employ.

Whatever big business does will never appease these rabble rousers. The total ignorance and blatant lack of understanding of the Februaries of the world about how these mega projects work and the timelines involved is mind-boggling.

This is the equivalent what has been happening in northern Mozambique: infiltrations supposedly with ISIS/ Al Shabaab links…the story goes from Moz’s (Frelimo) Govt. Nothing about local opposition forces.

In the meanwhile in SA….its local mafia with South African ID’s.

Come on really? No locals employed in mining operations? Let’s check the company payroll….majority locals employed. It’s not just “their” locals…

Can someone please give this “Mr Februarie” a packet of Pumpkin seed so he can find out for himself it will not grow in Prieska,should he not 1st take care of the soil,plant the seeds and then water it over a period of time before it will hopefully produce something in the future.It is as simple as that.

A proper and detailed SLP’s need to be in place prior to any mining project-this is covered in the mine’s application to the DMRE. Engagement with communities is critical otherwise you won’t mine. Unfortunately for ORN it is still in the development stage but the community because of lack of knowledge might view it as operational and start having expectations hence the protest.

End of comments.

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