Organized Crime Threatens South African Mining Industry

One of the major challenges faced by South African mining companies is the rise of organized crime groups known as the ‘construction mafias’ or ‘procurement mafias.’ These criminal organizations aim to extort procurement contracts from mining companies through acts of violence or threats.

The Minerals Council South Africa highlighted this issue during a press briefing at the Investing in African Mining Indaba 2024 conference. The briefing revealed shocking experiences, such as the assassinations of two company GMs at Richards Bay Minerals (RBM) since 2016 due to procurement contract disputes.

In response to the crimes, RBM launched its investigation in 2019 and discovered that organized crime had infiltrated the company. It became clear that the company couldn’t handle this alone and sought support from the national government and the South African Police Service (SAPS). However, even local SAPS in Richards Bay faced corruption challenges.

Another mining company affected by organized crime is Anglo American Platinum (Amplats). Although the company didn’t experience illegal mining, it faced challenges from the procurement mafias. These criminals often used local communities as a front for their extortion demands.

Tactics employed by these criminal groups included blocking access to mining operations, disrupting production and delivery. Amplats responded by upholding the Rule of Law, gathering intelligence, ensuring the security of personnel and infrastructure, and implementing measures that would prevent those involved in community blockages from receiving any contracts.

Copper theft has also been a significant issue for Amplats, both directly from the company’s properties and indirectly from Transnet‘s railway lines. Amplats has been collaborating with Transnet to address this problem and has taken similar measures as with community blockages.

To address these mining-targeting crimes, Amplats is working with authorities, other businesses, and the SAPS to strengthen investigations and prosecutions. The company is also focused on increasing police presence in mining areas and collaborating internationally to track stolen PGMs.

While RBM initially faced challenges with conviction rates for criminals, the collaboration with national SAPS and other authorities has brought about dedicated investigative officers and high-caliber prosecutors. The company expects strong convictions to be secured, with cases likely to be prosecuted later this year.