24th Apr 2014 16:38
LONDON (Alliance News) - Anglo American PLC Thursday received calls for it to set up a compensation trust for the victims and families of Silicosis sufferers in South Africa.
Holding its annual general meeting in London Thursday, the FTSE 100 mining giant was met by calls from representatives of South Africa's National Union of Mineworkers demanding "justice" for Silicosis sufferers and asking for the company to create a trust with funding for the families of the victims rather than carrying out a long legal battle over compensation.
Silicosis is a lung disease resulting from long-term exposure to silica dust, prevalent in mines.
NUM President Senzeni Zokwana on Thursday accused the board of ?procrastinating for the last 20 years? and said the company should "live up to the expectations of its values."
There are currently more than 3,500 miners and former miners taking legal action against Anglo American in London, while action on behalf of 17,000 former miners against 30 mining companies, including Anglo American and AngloGold Ashanti Ltd is taking place in Johannesburg.
Anglo American Chairman John Parker responded to the calls by saying the company fully supports initiatives to ensure that sufferers receive support and statutory compensation but sticks to its position that it is not liable for the claims.
"Anglo does not believe it is liable for these claims," Parker said. "We maintain that the gold mine operators on the sites involved were ultimately responsible for the safety and concerns of the miners."
The company also addressed ongoing platinum strikes in South Africa which have crippled the platinum industry over the last 12 weeks.
"A resolution of the strike is the most pressing issue facing the company but in the short term an unsustainable increase in pay would significantly damage overall industrial relations in the country," Chief Executive Mark Cutifani said at the AGM.
The platinum sector in South Africa has been massively affected by three months of strikes at mines owned by Lonmin PLC, Impala Platinum and Anglo American, as the Association of Mineworkers and Construction Union in the country attempts to achieve significantly better wages.
In March, Lonmin PLC said that negotiations over the action had been suspended after parties could not reach any kind of consensus following an offer by the major platinum producers which proposed to the AMCU of wage increases between 7.5% and 9%, with the lowest paid employees receiving a 9% increase in year one, above the current South African inflation rate of 5.4%.
At the AGM Thursday, Anglo American said it remains in discussions to solve the situation but noted that in the future it plans to reduce the number of staff at its operations in the country.
"In the long term, we are looking at a transition strategy over time to move towards a more mechanised process in South Africa," Cutifani added.
The news comes as the company announced Thursday production increases across its major operations in the first quarter ended March 31, with the exception of platinum production, which fell due to the strike action in South Africa, leading the company to revise down its 2014 platinum production guidance.
The Financial Times said on Monday that the company is in talks with the South African government to try to eventually withdraw from its deep platinum mines at Rustenburg it part due to the affects of the strike action.
The Financial Times said no decision had yet been taken on how to exit Rustenburg and Anglo is not in specific talks over the sale, which could turn out to be a lengthy process. Anglo American made no comment on the subject in its statement Thursday.
At the AGM, Anglo American did not comment on the possibility of a Rustenberg disposal.
In February, the company announced that it had swung to a pretax profit in 2013 as improved production and weakening producer currencies helped company finances.
Anglo American shares closed up 0.7% at 1,557.64 pence Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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