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Created before Nov 2016
Last update: 2016-07-04 21:26:55 BankTrack
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The company is listed in the Johannesburg and London stock exchange. The majority of the shares (51.03%) are privately owned: Haohua Energy (23.61%), M&G Investment (15.37%), ArcelorMittal (12.03%), Africa Management (9.76%) and Investec (5.92%).
About Coal of Africa
Coal of Africa Limited (CoAL) is an Australian based mining company which operates mines in South Africa. In 2012 it produced around 3.4 million metric tons of coal.
Human rights and social issues
Resistance against the Makhado project has been building up since 2011. Civil society organizations and local groups have brought at least 32 criminal charges against the company.
of Human Rights
The impacts of CoAL's mining would violate the human rights of local peoples, which are recognized and protected by the South African Constitution and by regional as well as international laws such as the African Charter for Human and Peoples Rights and ILO 169 Convention. In particular a citizen's rights and duties to a healthy environment, cultural practice which is connected with the land, public participation in decision-making, and right to life. The right to a basic water supply, which is also recognized in the South African Water Services Act 108 (1997), is likely to be violated as the mining will deprive local communities of their drinking water.
Loss of livelihoods of local and
In Vhembe, mining will only create a few jobs, for a few people, for a few years; and it will lead to a loss of thousands of livelihoods as the land will be destroyed and toxified. In 2009 CoAL promised that the Vele colliery would create 826 jobs in the operational phase, but the total number of jobs was 342 - less than half promised. On closure in 2013, only 49 people remained employed at Vele. Further, a World Bank study has found that African countries whose economies were based on mining failed to significantly reduce poverty and that the ‘benefits' do not reach the poor.
Severe environmental damage, leading to the loss of water systems
A water license for the new Makhado project has not been granted to CoAL. This is not surprising given the Limpopo region is already one of the driest regions in South Africa and its most important fresh water supply, the Nzhelele River basin, is a severely water stressed area. CoAL has acknowledged that mining would exhaust local groundwater by 2014 and therefore an alternative source of water will have to be found. By the company's own admission, CoAL’s mining will deplete the Vhembe region of water and it will take approximately 100 years before the water table is renewed. This is without taking into account the needs of the ecosystem and the communities who depend on water for their lives and livelihoods. The prospected decline of rainfall of 15% due to climate change, is also not factored into their impact assessment.
Erosion of South Africa's
natural and cultural heritage
The Limpopo region, particularly Vhembe, is internationally recognized as a centre for endemic biodiversity and cultural heritage, including a UNESCO Vhembe Biosphere Reserve and Mapungubwe Cultural Landscape and World Heritage Site. The region is also home to a network of Sacred Natural Sites of critical ecological, spiritual and cultural importance. There is international recognition that World Heritage Sites, Sacred Natural Sites and Territories and all categories of protected areas are No-Go Areas for mining and extractive industries. Even mining organizations such as the International Council on Mining and Metals (ICMM) and Shell company have committed not to mine in such areas.
Contributing to climate change
Mining of fossil fuels is one of the largest contributors of climate change, and current coal reserves planned for the South African market exceed the South African Government's ‘required by science' commitments to reduce carbon dioxide emissions. In fact South Africa is one of the countries already suffering severely from the impacts of climate change.
Flawed public participation process
The inability of CoAL to meet their obligations of engaging with local communities is shown time and time again through the process of their application for an environmental permit for the Great Soutpansberg Project. The required studies have not been completed and there are omissions of vital information and many speculative statements. Furthermore the company, contrary to the legal requirement, did not show the environmental management plan to the affected parties. Also the public hearings have been very badly organized, with very short notice for communities. Even not all affected groups were being invited, or if they participated, they were only allowed to speak once, resulting in an incomplete application process for the environmental permit. Finally very few of the concerns raised by affected parties have been addressed.
of experience with mining operations
When looking at the history of CoAL`s operations, their lack of experience in mining is clearly visible. The most striking example was the flooding of the Vele mine in February 2013 due to poor maintenance, which, together with other failures, led to a huge financial loss for the company. The mine was temporarily shut down. Considering additionally the experiences the local communities made with badly carried out public participation process, there is no trust in the company that they will maintain their collieries properly; from the opening to the proper closure of the mine.
Breach of environmental and human rights obligations could see the company face court proceedings as has been the case for two other mining companies. First there is the well known case of Rio Tinto which - during the period 1 January - 31 December 2010 - had to pay over half a million dollars for "exceeding permitted concentrations in discharge or unplanned discharge of materials to water bodies". In February this year, Matome Maponya, the director of the clay mining company Blue Platinum, was found guilty of causing environmental degradation near Batlhabine village, in Limpopo. The company had also not undertaken any of the rehabilitation measures required by both the department of environmental affairs and the department of mineral affairs. As a result Maponya was sentenced to five years in prison for causing damage to the environment, suspended for 5 years on the condition that the damaged land is rehabilitated by the mine within the next three months. This lawsuit is a landmark in the history of South Africa and opens the door for similar cases against mining companies.