Announcements, tablings and committee reports

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6. De Beers - Kleinzee

6.1. General Overview

It was reported that the first diamond was found by Jack Carstens at Oubeep in 1925 and the mining in Kleinzee began in 1927. In 1928 Cape Coast Exploration Company purchased “The Kleinzee diggings”. In 1942 DBCM acquired Cape Coast Exploration Company and a licence for area north of Buffels River was granted in 1956. The mining started in Langhoogte in 1967 followed by Koignaas in 1968. The first mariculture dam was built in 1999. The Diamond Coast – Forever Namaqualand Tourism initiative was launched in 2001. The business model to ensure sustainability was aligned in 2003. In 2008 talks of merger with Alexkor were unsuccessful and De Beers entered into discussions with Transhex Group on the sale of Kleinzee Mine, which were interrupted by global economic crisis. In 2009, talks with Transhex Group resumed but were unsuccessful. The strategy was adopted to maintain minimal production while focusing on rehabilitation and economic development.

6.2. Safety, Health, Hygiene and Environmental

The Safety Manager reported that there were 2.84 million fatality free shifts since the last fatality that occurred in June 2004 and zero lost time injuries for the past 30 months. De Beers Group received 87 per cent compliance in the Presidential Audit that was done in 2009 which compares favourable to other diamond mines. There was a marked decline in injuries between 1998 and 1999. It was reported that 2007 was not a good year for the company in terms of safety since lost time injuries rose in 2007 to nine from zero in 2006. Two employees were involved in a motor vehicle accident and two employees fell and sustained fractured ankles. In 2008, there was one lost time injury which occurred after the Christmas break.

6.3. Impact on Employment Levels

It was reported that De Beers had downscaled to 92 employees in 2010 from 2310 in 2006 due to loss making in the Namaqua Mine. From 2006 to 2008 a voluntary process was conducted and from 2009 to 2010, retrenchments were effected. This exacerbated……

6.4. Steps to Mitigate Unemployment

The Human Resources Manager indicated that an agreement was reached between National Union and Mineworkers (NUM) and Management of De Beers Group where R7 000 will be provided per employee for reskilling. Retrenched employees that are older than 50 years may nominate a family proxy for reskilling. Formal communication to all retrenched employees in this regard would be made by end of August 2010.

Retrenched employees may remain in free accommodation for 3 months to enable access to Human Resources services for assistance with Curriculum Vitae writing and job seeking. The Manager drew attention of the Committee members that retrenched employees have already embarked on driver training (Code 8,10 and 14), HAZMAT training, Learnership completion and requests for toolboxes have been granted. Management has reached an agreement with NUM to rehire retrenched employees when the production picks up. Other companies that are embarking on projects namely town services refurbishment and plant dismantling are encouraged to recruit from the pool of retrenched employees where possible.

6.5. Employee Housing

It was reported that all employees retrenched in 2009 and 2010, as well as current employees have been afforded the opportunity to purchase houses in Kleinzee and Koignaas. The prices of houses have been discounted by 30 – 50 per cent and by 2o per cent to other categories of other employees. De Beers is in consultation with the NUM to discontinue practice of transporting employees from Lomaggas as well as providing single status accommodation and subsidised messing. These benefits are to be replaced by a monetary amount added to the employees’ salaries.

6.6. Rehabilitation

De Beers is actively conducting earthmoving and ecological restoration and rehabilitation to reduce the mining footprint. Furthermore, De Beers is exploring different land-uses as an alternative to mining to create longer-term socio-economic alternative activity.

De Beers seeks other win-win opportunities to offset rehabilitation costs against economic development projects. Kleinzee is defining a process for progressive reduction in the overall liability through systematic sign-off of areas defined as rehabilitated (earthmoving and restoration component).

The current focus is to make safe and investigate alternatives, engage the stakeholders, implement agreed alternatives, achieve sign–off of 866 hectares by the DMR. Small scale mining requires a rehabilitation plan which is being compiled at present

The mine has approximately 9.8 million carats inventory and 1.7 million carats in planning inventory. The challenging economic factor is that Namaqua Mine has been making a loss for several years and, historical mining method and infrastructure is not suitable to the remaining resource.

    1. Social Labour Plan (SLP): Community Development and Poverty Eradication Programmes

It was reported that the following projects were in progress. The company continued engagement with stakeholders to ensure that SLP commitments benefit the region that they are operating in.


Total SLP (R)

Livestock Farmers/Gardens

600 000

Early childhood Development

630 000

Multipurpose Centre

1 250 000

Community upliftment programmes

1 000 000


145 000

Rural Educational Assistance programme

1 200 000

Mathematics and Science Schools programme

340 000

6.8 Reasons to Proclaim the Towns

Having the current mining settlements of Kleinzee and Koingnaas proclaimed into public towns is the key to:

  • Unlocking sustainable local economic development;

  • Diversification and development;

  • Reduction in reliance on mining; and

  • Improved regional socio-economic integration.

6.9 Kleinzee Abalone Farm

Information on the Abalone farm was given as follows:

  • The first phase is a 100 tons per annum for production unit and it is under construction;

  • It is designed to be expanded in 100 tons per units;

  • The platforms are ready for 200 tons per annum production;

  • 1,500 tons of water per hour (sea and recirculation pumping);

  • The 360 fibreglass tanks of 5x2 metres; Seven seaweed production dams for feeding, water purification and heating;

  • Approximately 81 jobs were created with immediate effect and 182 jobs for full production will be created.

6.10 Future potential for marine aquaculture

De Beers has identified future potential for marine aquaculture which will assist in :

  • Multifold expansion of current facilities;

  • Hatchery (short to medium term);

  • Ranching (medium term);

  • Expansion to processing, other Mari-culture and by-products;

  • Many other opportunities exist due to the availability of sea water and infrastructure;

  • Introduction of additional investors/marine aquaculture companies in the area.

6.11 Kleinzee Correctional Centre proposal

De Beers proposed to have 1000 bed correctional facility at Old Dreyerspan single quarter complex. It is aimed at youth between the ages of 18 – 25 years. This should consist of the rehabilitation, training and re-integration of offenders. De Beers had already funded the pre-feasibility study. The proposal is supported by the local communities and now needs the Government support. The anticipated timelines for the project to kick off should be January 2011 to December 2012 provided the approval is been granted by December 2010.

6.12 Benefits

About four to five communities namely Richtersveld, Nama Khoi, Kamiesberg, and Namakwa are the beneficiaries of the targeted trusts. The community ownership is 30 percent. The Economic benefits will flow directly to local communities. The abovementioned communities will take full control over the trust.

6.13 The Living Edge of Africa Project (LEAP)

The vision of the project is to recast the legacy of mining into a thriving economic hub and model of sustainable development, creating low-carbon enterprises and jobs based on conservation and innovative technologies.

Enterprise nodes create synergies around the use of seawater, freshwater, energy, nutrients, humidity, temperature differentials and tourism or interpretive activities.

6.13.1 Project progress to date

The pre-feasibility study was completed and reviewed in September 2009. The feasibility study is underway regarding certain identified components and initiatives that form part of the project. The Conversation International was contracted to conduct the study.

The Conservation International is contracted to conduct the fast-tracking of initiatives such as:

  • Land Art – pilot: has potential of alternative land use

  • Engagement with marine aquaculture investors: abalone farm at Michells Bay;

  • Feasibility of Seawater Greenhouses;

  • Institutional arrangements to be finalized

  • Investigation with respect to renewable energy (wind) ongoing;

The target date for the completion of the feasibility study is August 2010.

    1. Wind Electricity Generation Project

South Africa needs additional electrical energy. Eskom is encouraging industry to construct renewable energy power generators (wind, solar and water). Namaqualand coastline was identified as a suitable region for wind power.

There is the great interest from many companies to construct wind farms. Fourteen companies have asked to be included on the enquiry list and 4 were shortlisted. De Beers has made mined-out areas available for wind power generation. The Companies have been invited to make a proposal taking into account the interests of the local community and region. An area in the South of Kleinzee has been identified as preferred site for ESKOM WIND 2 PROJECT . The National Energy Regulator of South Africa (NERSA) committed to fast track the process.

    1. Tour of Kleinzee Mine Rehabilitation Project

The members of the committee were shown the Kleinzee Marine Aquiculture project. The initial stage of rehabilitation, which involves earth-moving has been finalised. The project is in its final stage, which involves putting of nets to prevent soil and seeds being eroded by the wind. A dam has been built to farm oysters.

6.16 Meeting with Hondeklipbaai Community

The following concerns were raised by Hondeklip Community:

  • De Beers was criticised for the lack of social responsibility.

  • A complaint about bureaucratic red tape when applying for concessions was raised by the community. To address this complaint, it was suggested that the DMR should educate the community members about applications for concessions.

  • Transhex was criticised for not paying money that was due to the surviving spouse of the deceased worker. However, it was not clear whether the worker died on duty or of an occupational-related disease. It was suggested that the death be investigated and the findings be communicated to the Chairperson of the Portfolio Committee on Mineral Resources.

  • The DMR reported that De Beers’ concessions were granted but not yet executed while Transhex and Alexkor concessions were granted and executed in September 2009 and April 2010, respectively.

  • The community has filed a claim for land that De Beers is currently mining in and is in the process of being proclaimed a town. The meeting decided that the land claim case should proceed as it is already in court.

  • The community reported that they have applied for a local school to be declared a poor school for the purpose of additional support from the Department of Education. It was also reported that Transhex is providing some support to the school in the form of subsidising teachers’ salaries.

  • It was explained to the community that applications for mineral rights should be filed with the DMR while those for contracts should be filed with the mining companies.

  • One of the community members raised a concern about his injury at Transhex and alleged that he has not been compensated as yet.

7. Meeting at Transhex

7.1 Baken Mine Visit

Members of the Committee were shown around the Baken Mine, which is an open- cast diamond mine. They were informed that the Baken Mine is using excavated soil to fill the open pits in mined areas, thus rehabilitating as it continues with mining. Members were also informed about the mining technique used in Baken Mine.

7.2 Transhex Presentation

      1. General Overview

Members of the Committee were taken through the history of Transhex and its diamond operations in the Baken Mine up to 2009 when it acquired New Order Mining Rights. The acquired mining rights are valid for a period of 10 years.

      1. Health, Safety and Environment

With regards to health and safety, Transhex reported, amongst other things, that it achieved 2000 fatality free production shifts on the 11 June 2010. The statistic is for the period starting from July 2007. With respect to environmental management, the company reported that approximately 80 percent of water that it uses is recycled.

      1. Employment Equity

Members were informed about the employment equity profile of the company. Transhex reported that it has a workforce of 600 full time employees and the total number of employees when contractors are accounted for is 900. Transhex also reported that it has a retirement funding scheme for employees who have reached the retirement age, which is 63 for the industry.

7.2.4 Housing

Transhex reported that it provides accommodation for its employees in the form of houses, flats, married quarter’s accommodation, hostels and converted hostels (Stofbakkies).

7.2.5 Training and Development

Transhex reported that it has training and development initiatives, which focus on critical and scarce skills, portable skills and women in mining. It was reported that 15.7 percent of the group’s South African employees are women and 6.4 percent of all management positions are occupied by women.

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