Sibanye-Stillwater CEO Neal Froneman has spoken out on illegal mining, saying law enforcement authorities must start at the top and go after the crime kingpins and money-laundering and terror financing linked to illicit mining — not just arrest the miners at the bottom.
“We need to be more proactive in arresting the illegal miners and charging them, but also not just focusing on the miners but the organised crime and corruption that’s linked to illegal mining,” he said.
“The money is laundered and some of it is used for terror financing, which is where we’ve got to chop it out. You’ve got to start at the top.”
Froneman, who is also the chair of the World Gold Council and joint leader of the business-government workstream on crime and corruption, was speaking as illegal miners continued to surface from the 2km-deep mine at Stilfontein where police have in recent weeks been conducting an operation to stop illegal mining.
The high court at the weekend dismissed an application seeking to compel the government and police to provide emergency relief to the miners.
South Africa's mining industry had been calling for action to combat and prevent illegal mining for the past 15 years but it was only in the past 18 months that a special task force had been set up to deal with it, Froneman said.
We need to be more proactive in arresting the illegal miners and charging them, but also not just focusing on the miners but the organised crime and corruption that’s linked to illegal mining.
— Sibanye-Stillwater CEO Neal Froneman
He did not know the police operation at Stilfontein in detail and could not comment on the appropriateness of the police’s methods.
“But I welcome that the police are doing something now because it starts becoming a message that if you do this you’re going to get arrested, but you cannot ignore human rights,” he said.
It is estimated that 20% of the world’s annual gold production comes from illegal and artisanal mining, up from 4% in the 1990s, with the sector employing 15-million people globally and making up one of Africa’s most important sources of income.
Froneman cited a report for the World Gold Council which noted the sector was often exploited by malign actors to fund civil wars and terrorist groups, facilitate money-laundering and enrich criminal enterprises.
Illegal and artisanal miners were preyed on by criminal gangs and corrupt officials and exploited by intermediaries who laundered gold out of the country clandestinely, said the report, which was authored by former UK deputy prime minister Dominic Raab.
It found one of the biggest beneficiaries was Russian mercenary enterprise the Wagner Group, which since the invasion of Ukraine had earned more than $2.5bn (R45.5bn) from illicit gold mining that had been funnelled back into Russia’s war machine.
The World Gold Council has recommended a high-level global action plan that includes arresting the workers involved — but focuses on the kingpins and organised crime syndicates that perpetrate the illicit gold trade — and aims to choke off the illicit flows, including through the sanctions imposed through greylisting by the Financial Action Task Force.
Supply chains
The council has also focused on getting proper supply chains in place for artisanal miners to give them the ability to sell gold legally rather than through criminal organisations.
In South Africa, some have asked why the formal mining sector does not return and mine some of the disused mines illegal miners have targeted at the present high gold price of more than $2,600/oz (R47,310/oz). Froneman said the only way it was profitable for the illegal miners to mine these deposits was that they did not have to comply with mining regulations or health and safety and environmental standards.
“It’s not that they know how to mine better, just that they don’t comply with the same standards we do,” he said.
The underground mineworkers were often the victims of kidnapping or human trafficking and forced to work in dangerous conditions.
Nor is the illegal mining confined to abandoned or disused mine shafts: illegal miners also infiltrate existing operating mines, often using complicit employees to gain access.
“It’s dangerous for our personnel and because there’s no law enforcement people start thinking it’s OK to do this. We try our best to convince communities that it’s bad, it’s illegal and if you get caught we arrest you and you lose your job, but it’s only recently that the police and the department have become active in trying to stop it,” Froneman said.
Sibanye had to shut down its Cooke mine a few years ago because it could not stop illegal miners infiltrating that part of the business. In its 2023 annual report, Sibanye said it had more than 450 incidents of illegal mining with 1,239 arrests at the group’s mines during the year.
Froneman also provided an update on the business-government crime and corruption workstream, which is now in fundraising phase.
It aims to raise R100m-R150m to finance the 20 high-profile cases that have been identified by the National Prosecuting Authority and are essential to getting South Africa off the greylist.
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