A man rides his bicycle past the Lonmin mine outside Rustenburg, northwest of Johannesburg. File Picture: REUTERS
A man rides his bicycle past the Lonmin mine outside Rustenburg, northwest of Johannesburg. File Picture: REUTERS

The murky dealings around hundreds of millions of rand that has gone missing from accounts held for royalty payments to the Bapo Ba Mogale community near Rustenburg could be an underlying cause for protests that have brought two Lonmin mines to a standstill.

Unrest at the village of Bapong, which is near the East 2 and East 3 shafts owned by Lonmin, has culminated in intimidation of Lonmin employees, the burning of buses and a spate of demands from a group claiming to represent the community and unemployed youth.

The demands ranged from employment and training to "full community participation in core mining with a goal of running full shafts, especially first-generation shafts of Lonmin".

Lonmin has just cut 6,000 positions, shut mines and implemented cost-cutting measures. About 60% of South African platinum mines are unprofitable at prevailing rand prices.

The two shafts, which account for about 4% of Lonmin’s annual production capacity, have been earmarked for closure.

Lonmin said that for every seven days the two shafts are shut it cost the company about R40m in lost revenue.

The latest protest, which started on May 2, prompted management to meet a delegation for the handover of a memorandum of demands.

The demand for participation in running mines was overtaken by a demand for Lonmin to provide 1,000 jobs at its mines as well as 500 "cadet placements" for community members.

Lonmin said the demands were not realistic and could not be acceded to without threatening the sustainability of the business. "Lonmin has recently undergone a restructuring, in close consultation with its recognised union [the Association of Mineworkers and Construction Union]," said Lonmin.

A community member said the Bapong community was angry that R20m a year paid by Lonmin to the Bapong Investment Company in a five-year deal was not reaching them.

The circumstances are similar to the recent difficulties at Impala Platinum’s Marula mine near Steelpoort, Limpopo, where a company operated by community trusts was not passing millions of rand on to the community, resulting in unrest around the mine.

Former public protector Thuli Madonsela investigated the disappearance of more than R600m of mining royalties once held by the Bapo Ba Mogale. Her report, which she said was due in December 2016, has been delayed. It is now expected to be released by the end of June.

At a meeting with the community in March new Public Protector Busisiwe Mkhwebane said the report had uncovered irregularities. She promised it would be released before the end of April. The community member said the violence and demands could be a way by some of those potentially named in the report to delay its release.

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