Mintails' gold plant and water tanks for treatment in Krugersdorp. Picture: FREDDY MAVUNDA
Mintails' gold plant and water tanks for treatment in Krugersdorp. Picture: FREDDY MAVUNDA

Directors of the Australian-owned Mintails face possible criminal charges after a parliamentary investigation found the company is R460m short on the money it owes to clean up the environment at its mining operations near Krugersdorp.

Sparked by an Oxpeckers investigation into Mintails’s failing 1,715ha gold surface re-treatment operation, parliament’s portfolio committee on mineral resources launched its own inquiry, uncovering a slew of illegal activities and lax oversight by the company and the department of mineral resources. 

Mintails failed to submit audited financial statements for the past five years, mined outside its permits and ignored commitments made in its social and labour plan. The company was never issued licences for its mining rights, although the department of mineral resources knew this and allowed operations to continue for six years.

After the company went into liquidation in August, about 750 people are out of work, while 90% of the funds expected to be recovered by the liquidation process will likely end up with an investor in London, according to letters from the business rescue practitioner to the department of mineral resources revealed in court papers. 

Documents made public in the liquidation proceedings revealed that the international majority shareholder, Paige Limited, is the only secured creditor. Paige is an investment vehicle run by the wealthy Harbour family, and the London-based Gideon Harbour is one of Mintails’s remaining directors. He did not respond to several requests for comment.

Court records show workers and the environment are unlikely to receive even a cent. In addition to clean-up costs, the company owed creditors more than R710m.

The portfolio committee’s report, released in November, found mining companies’ provisions for clean-up funds are often inadequate, that the department of mineral resources “failed” to manage mine closure and current legislation has “not proven effective in avoiding this situation where the state and the taxpayer still end up paying for the environmental harm caused by mining”.

In a statement, a department of mineral resources spokesperson said the department was working closely with environmental nongovernmental organisations (NGOs) to address the portfolio committee’s findings.

The report cited concern that Mintails’s West Rand operations will emulate Blyvooruitzicht or Aurora mines, two recent examples of the human and environmental disasters that await mining communities when mines are no longer profitable and are placed in business rescue or liquidated.

DRDGold, a previous owner of Blyvooruitzicht, sold part of the Krugersdorp mining concession to Mintails.

One of the permits mined by Mintails is held by West Wits Mining,  after a transfer was withdrawn due to a lack of BEE partnership, and it is unclear which company is liable. In an e-mail to Oxpeckers, DRDGold CEO  Niël Pretorius distanced the company from responsibility, even though he sits on West Wits’s board of directors and DRDGold is the largest shareholder at 6.66%.

“We don’t believe either DRDGold or its personnel are liable for the malfeasance of Mintails and its directors,” Pretorius said. DRDGold retained the services of private investigator Paul O’Sullivan to determine if Mintails’s directors “acted unlawfully”.

The DMR and West Wits are also targeting Mintails’s leadership. “A process has been initiated to hold them liable,” a DMR spokesperson said.

West Wits chairman Michael Quinert said his company was  not to blame.

“We are also considering instituting proceedings against individuals, arising out of their conduct in causing these unfunded environmental liabilities.”

Johan Moolman, a Mintails director who was CEO until June, refused to comment.

In 2014, the department of mineral resources directed Mintails, which owns about 100-million tons of mine waste around Krugersdorp, to increase financial provisions. Mintails never did. The company entered business rescue in October 2015 and went to the departmentaround May 2018 with a plan to save the company. However, the proposal was rejected, with the department  insisting on higher financial provisions.

Similar to the experiences at the Aurora and Blyvooruitzicht mines, site visits showed water pollution and increasing theft of mining infrastructure at Mintails’s operations. Toxic dust from unreclaimed waste piles blows over Krugersdorp and Kagiso. The portfolio committee’s report chronicled years of homes cracked by blasting, rising zama zama activity, criminals dumping corpses into mine shafts and pupils drowning in open mine workings.

The department of mineral resources  called the situation “unfortunate”, but said it could do nothing to aid the 750 affected workers directly because the liquidation “is not within the department’s jurisdiction”.

Selwyn Trakman from Highveld Trust and Management, the lead liquidator, declined to comment on a strategy for protecting the environment and workers while dissolving Mintails.

oxpeckers.org, with Andiswa Matikinca