Richards Bay Minerals restarts operations, but force majeure remains in place

Global mining giant Rio Tinto on Tuesday announced that it has “commenced the process of restarting operations at Richards Bay Minerals (RBM)” – its major sand mining venture in the northern KwaZulu-Natal industrial town.

The restart of operations at RBM – the biggest single employer in the area – is expected to take some time though and the group is yet to lift a force majeure declared on customer contracts in June after violence halted operations.

In May, the mine’s operations GM Nico Swart was killed in a hail of bullets. While no suspects have been arrested, the execution-style killing is believed to be linked to protests by local communities wanting greater financial benefits from the mine operating in Richards Bay.

Read: Force majeure at Richards Bay Minerals is a wake-up call for SA

It was the second time in less than two years that violence halted operations at the facility and has seen Rio Tinto put a major R6.6 billion expansion at RBM on ice for now.

Security ‘stabilisation’

In its statement announcing the recommencement of operations Rio Tinto said the decision “follows a stabilisation of the security situation around the mine”.

It noted the support of national and provincial government in helping stabilise the situation “as well as substantive engagement with host communities and their traditional authorities”.

“Operations will be ramping up to capacity as soon as possible. The overall impact of the suspension of operations, including the shutdown of furnace number 4 as announced on 21 July 2021, is still to be assessed. At this time, the force majeure declared on customer contracts remains in place,” it added.

“The safety and security of our people has been our priority throughout,” said Rio Tinto’s minerals chief executive Sinead Kaufman.

“We recognise the collaboration and constructive dialogue we have had with all stakeholders to get us into a position where we can restart operations and resume contributing to the host communities, KwaZulu-Natal and South Africa,” she added.

Kaufman acknowledged “the resilience and dedication shown by all our people at RBM over the past weeks”.

Improved trust fund agreement

While Rio Tinto did not go into detail on the settlement reached with affected communities, local newspaper Zululand Observer reported on Tuesday that the “signing of an improved trust fund agreement with various stakeholders on Monday has paved the way for the restarting of mining activity” at RBM.

“It was cemented by the release of a further R130 million to trusts established for each of the communities surrounding the mining and smelter operation,” the newspaper noted.

“With this agreement, all parties have come together to commit to long-term modernisation of the trusts for the benefit of the host communities,” RBM managing director Werner Duvenhage is quoted in the Zululand Observer.

“This is a major milestone and the contribution RBM makes to the communities through these funds will be put to achieving its intended purpose, which is to directly support local economic development in the communities.

“We are grateful for the support and collaboration of the Amakhosi, provincial and national governments, and other stakeholders,” Duvenhage added.

Union welcomes the news

The restart of operations at RBM has been welcomed by labour union Uasa and will no doubt also be hailed by organised business, provincial authorities and the local community.

“Uasa is pleased with the unique agreement signed between RBM and the leaders of the four host communities around the mine in order to bring peace to the area, and specifically between community members and the mine,” Uasa spokesperson Abigail Moyo said in a statement.

“Over the years RBM and its workers have had to live with terrifying violent acts committed by angry community members in protest against the mine,” she said.

This resulted in the loss of expensive mining equipment and some workers getting injured along the way.

“By signing the agreement RBM shows its commitment not only to the surrounding communities, but also to creating a safe workplace for Uasa members and other workers,” she pointed out.

“RBM needs to stay operational to the benefit of the workers and the community. The significance of the agreement is that the mine can resume operations without further obstructions or economic setbacks for the province.

“Uasa is hopeful that the agreement will improve the governance, trust and commitment between the parties going forward, as intended. The host communities around RBM have fought for the improvement of their living standards and benefits from RBM for years and we trust that the agreement will result in added value for both parties,” added Moyo .