A threatening letter, a derailed train, blocked roads, burnt vehicles, workers locked up. That’s what some of the world’s biggest mining companies say they’re battling in South Africa: Extortion.
Covid-19 plunged Africa’s most-industrialised country — home to the biggest deposits of metals ranging from platinum to chrome and manganese — into the deepest economic contraction in more than a quarter century, and its aftermath has left it with soaring inflation, one of the world’s highest unemployment rates and a collapse of local government services.
Mining firms, riding a boom in the global commodities market, have been a rare bright spot, making companies like Anglo American Plc, Glencore Plc and Sibanye Stillwater Ltd. targets for groups they say are demanding as much as 30% of their lucrative procurement contracts, often with little to offer by way of skills and services. Non-compliance brings threats to executives and disruptions in operations.
“The procurement mafia mobilises the community for their own devices, which is really very straightforward extortion,” Paul Dunne, chief executive officer of Northam Platinum Holdings Ltd., the operator of the world’s deepest mine for the metal, said in an interview.
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