Reply #48: Gold Companies May Face $100 Billion Liability for Sick Miners [View All]

[Demeter]

http://www.bloomberg.com/news/2011-05-25/gold-companies-may-face-100-billion-liability-for-ill-south-africa-miners.html

...silicosis, a scarring of the lungs caused by prolonged exposure to the dust found in South African mines now run by companies such as Anglo American-founded AngloGold Ashanti Ltd. (ANG), Gold Fields Ltd. (GFI) and Harmony Gold Mining Co...

South Africa’s highest court on March 3 ruled that ex- miners such as Willie can seek redress from companies that operated under an apartheid-era system to use cheap black labor in the world’s deepest mines.

While the ultimate number of claims and their size is impossible to determine, mining companies may face a liability of as much as $100 billion, Leon Esterhuizen, an analyst at RBC Capital Markets in London, said in a May 6 note to clients. A settlement at a significantly lower level is more likely, he said in a May 16 interview.

“The whole risk really depends on whether these people putting these claims up can prove negligence by the mining companies,” he said...“The judgment potentially opens the floodgates for claims,” said Warren Beech, a lawyer at Webber Wentzel Attorneys in Johannesburg who is not involved in the litigation. “You could be looking at an average of 1 to 2 million rand a claim.”...RBC’s Esterhuizen based his May 6 estimate on the assumption that there are 300,000 potential claimants, each suing for at least 2 million rand...The number of gold miners in South Africa peaked at 489,000 in 1983, according to the Department of Mineral Resources. The mines today employ about 160,000 people, according to the Chamber of Mines, which represents mining companies.

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