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MOKOPANE, SOUTH AFRICA — The two men took the cash from an envelope, counted it carefully and spread it on the table in front of Raesetsa Makgabo in her village home. It was exactly 5,250 South African rand (about $450 U.S.).
She says she remembers vividly what the men said next: They told her to take the money and allow the Canadian mining company to begin drilling on her maize fields – or lose her monthly pension.
Illiterate and unable to read the document in front of her, but fearful of losing the $120 monthly pension that was her main income, the 82-year-old villager took the pen and marked the agreement with a humble X beside her name. The two men, including an official from Ivanhoe Mines Ltd., signed the document dated May 10, 2011. Then the drilling began.
Ivanhoe’s $1.7-billion project, forecast to become the world’s biggest new platinum mine, is crucial to the fate of the Vancouver-based company – and to thousands of impoverished villagers near the site.
Ivanhoe says its Platreef mine will provide 10,000 direct and indirect jobs, along with a minority ownership stake for 150,000 residents and employees under South Africa’s black-empowerment rules.
Yet as Platreef moves into construction after gaining government approval in November, the project has remained highly controversial, triggering violent protests and clashes with police. While opponents accuse Ivanhoe of pressure tactics, the company has its own worries. It revealed to The Globe and Mail that its staff and property in South Africa have been subjected to “disturbingly explicit threats of extreme violence” and incidents of “arson, assault, illegal blockades and disruptive violence” over the past year.
Many villagers, for their part, have been threatened with the loss of pensions, welfare payments, farm fields or even cemetery plots if they refuse to co-operate with the mine, community activists say. The company denies any knowledge of such threats, saying that this would be “improper duress” and wouldn’t be tolerated.
Police fired rubber bullets to disperse hundreds of angry protesters at the mine site in late November. One of those injured by the rubber bullets was Ms. Makgabo’s daughter, Margaret, who says the $450 payment was meagre compensation for the loss of their crops. “Those fields fed our children, and now we can’t even afford a tomato or a cabbage,” she says.
Ivanhoe’s billionaire founder and executive chairman, Robert Friedland, is looking to South Africa for the third mining fortune of his colourful career, after selling the Voisey’s Bay nickel mine in Labrador for $3.8-billion and later developing the $6-billion Oyu Tolgoi copper mine in Mongolia, which was acquired by Rio Tinto.
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