Document K6MOvYa8LN86R529K2B2j1LBN

6 HISTORY OF ASBESTOS IN SOUTH AFRICA 6.1 HISTORICAL DEVELOPMENT In the early years of the 20th century, asbestos deposits were found in South Africa and what is now Zimbabwe62. Asbestos mining in South Africa began in earnest in the 1930s. In the following decades, it attracted a multitude of big and small companies, and even individuals. In the early days, mining and production methods were crude, with the fibre being separated from the ore by hand. In some cases the "mines" were spade-andwheelbarrow operations run by farmers who had found deposits on their land. Two international mining groups, the Swiss Eternit Group, and the British-owned Cape Asbestos SA, and the South African-owned Griqualand Exploration and Finance Company (Gefco) were the major mining companies that were active in South African asbestos mining from the early 1940s to the late 1990s. Asbestos mining peaked in the late 1970s when Gefco had four active mines, Eternit four and Cape two. In 1979, Eternit sold its asbestos mines to Rand Consolidated Properties who in turn sold out to Gefco in 1981. At this stage, after a long series of mergers and acquisitions, the number of major producers had been reduced to two companies: Gefco and Msauli Asbestos. Gefco produced the amphiboles crocidolite and amosite commonly known as blue and brown asbestos - in the North-Western Cape and in the North-Eastern Transvaal, while Msauli produced chrysotile, or white asbestos, in the former KaNgwane homeland near Barberton. Ultimately, Gefco purchased Msauli, leaving only one active asbestos mining company in South Africa. In 1988, Gefco disinvested from asbestos mining and sold its remaining mines, including Msauli, to management, who formed a company called Hanova Mining Holdings. As a result of declining international demand, South African asbestos mines began closing towards the end of the 1970s. The first mines to close were the brown and blue asbestos mines in the early 1990s. The last white asbestos mines, Kaapsehoop (December 2001) and Msauli (September 2001), ceased mining operations in 2001. 6.2 NATURAL OCCURRENCE OF ASBESTOS IN SOUTH AFRICA Asbestos deposits are found mainly in four regions of South Africa: the Northern Cape, the North-West Province, the Northern Province/Limpopo and Mpumalanga63. Table 11 identifies the types of asbestos found in each of these regions. Table 11: south African asbestos deposits REGION Northern Cape Griqualand West Prieska Kuruman North-West Province Northern Province Chuniespoort Group Pietersburg District Letaba District Steelpoort River Penge Mpumalanga Barberton Area TYPE OF ASBESTOS DEPOSITS Crocidolite Crocidolite Amosite Anthophyllite C rocidolite Tremolite Chrysotile 48 6.3 SOUTH AFRICAN ASBESTOS MINING Figure 4 depicts South Africa's asbestos mining production volumes of all types of asbestos for the twelve-year period from 1989 to 2000 period. Figure 4: south African asbestos mining production TOTAL PRODUCTION Amosite Production Linear (TOTAL PRODUCTION) ----Chrysotile Production --^--Ciociddite Production This diagram indicates that there has been a dramatic decline in asbestos mine production in the past decade, down from 165,000 tons in 1989 to 18,800 tons in 2000. During this period, mining production of amosite and crocidolite stopped altogether, leaving only the mining of chrysotile asbestos. Table 12 on the following page reflects South African asbestos mining output from 1989 to 2001. The figures have been obtained from official statistics provided by the Department of Minerals and Energy63. The Local Sales, Imports and Local Usage figures form 2001 and 2002 have been obtained directly from the local and Zimbabwean mining operations. 49 Table 12: South Africa asbestos mining output ('000 tons) year 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 production chrysotile 115.5 103.4 101.6 103.7 92.4 85.9 81.2 56.7 49.8 27.8 am osite crocidolite 26.1 23.7 26.6 31.5 27.4 31.6 5.1 24.5 11.6 6.3 7.4 5.1 0.2 total 165.3 161.5 160.5 133.3 104.0 92.1 88.6 56.9 50.0 27.8 18.8 18.8 local rsa sales chrysotile am osite crocidolite 8.0 0.2 5.2 0.3 3.5 0.3 4.9 0.1 3.7 0.1 3.7 3.5 3.3 3.1 3.1 1.3 0.9 0.8 0.4 0.2 total 9.4 6.3 4.6 5.4 4.0 3.7 3.5 3.3 3.1 3.1 1.4 1.7 1.1 0.8 exports chrysotile 110.6 107.9 99.7 98.4 92.9 80.2 82.3 52.3 34.3 23.9 am osite crocidolite 26.1 35.2 34.1 36.8 21.9 25.9 15.2 17.5 4.5 12.7 15.4 9.8 8.5 5.8 1.0 total 171.9 178.8 147.5 131.1 110.1 95.5 92.1 60.8 38.2 24.9 20.2 16.6 11.1 5.1 total IM ports totallocal usage 9.6 12.7 7 10.1 10.3 11.7 9.3 11.0 5.6 6.7 5.44 6.2 50 6.3.1 Local South African Sales of Asbestos Fibre Figure 5 reflects local South African sales of asbestos for the twelve-year period from 1989 to 200063. Figure 5: local south African asbestos sales 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 LO CAL SALES --H-- C hrysotile C onsumption -- Amosite Consumption --K-- Crocidolite Consumption Tinea- (LOCAL SATES)____________________________________________ 1999 2000 During this period, local sales of raw asbestos fibres declined from 9,400 tons to 1,700 tons in 2000. Amosite and crocidolite disappeared from the local market in 1993. 6.3.2 South African Asbestos Fibre Exports Figure 6 reflects South Africa's asbestos export volumes for the period from 1989 to 200063. Figure 6: south African asbestos fibre exports TOTAL EXPORTS South African asbestos exports have also declined significantly, in line with the decline in mining production. 6.3.3 South African Asbestos Fibre Imports All of South Africa's raw asbestos fibre is imported from Zimbabwe - SA imports approximately 4% of Zimbabwe's asbestos exports. South Africa's imports of raw asbestos fibres have declined from just over 10,000 tons in 1999 tojust over 5,000 tons in 2002. Figure 7 reflects this trend. Figure 7: South African asbestos fibre imports 6.4 THE CURRENT STATUS OF SOUTH AFRICAN ASBESTOS MINING Before the closure of Penge in 1992, South Africa's asbestos industry was unique in that it mined all three principal varieties of asbestos: amosite, chrysotile and crocidolite64. Crocidolite was first mined in South Africa in 1893. Chrysotile mining/production followed about a decade later, and amosite started in the early 1930s. Amosite mining/production stopped in 1992, while crocidolite mining stopped in 1989. Chrysotile mining ended with the closure of the Msauli Mine on the Swaziland border in 2001. Two smaller operations are still recovering asbestos particles from mine dumps in Mpumalanga. Table 13 reflects the current status of asbestos mining in South Africa. Table 13: the current status of asbestos mining in south African TYPE OF ASBESTOS DEPOSITS Crocidolite Crocidolite Amosite Anthophyllite Crocidolite Chrysotile M INING/PRODUCTION STATUS Stopped in 1989 Stopped in 1989 Stopped in 1992 Stopped in 1989 Stopped in 1989 S topped in 2001 52 6.41 Current Operat io ns Currently, there is a stockpile of chrysotile asbestos fibre at the Msauli mine near Barberton. Table 14 reflects sales figures for the January to August 2000 to period from this source. Table 14: Msauli 2002 sales January February March April May June July August exports volume (tons) VALUE (US$) 178 45,435 380 82,405 417.5 84,186 260 54,445 870 155,591 710 118,686 545 97,019 355 77,093 LOCAL RSA SALES volume (tons) VALUE (SAR) 160 213,628 144 244,288 118.3 203,294 90.7 179,204 40 85,000 63.5 132,518 52.3 113,528 26.1 56,836 T able 15 reflects the remaining stockpile tonnage at this location as at the end of August 2002, along with an estimate of the number of months that it will take to sell off these remaining stocks, calculated at the average monthly sales for the first eight months of 2002. Table 15: chrysotile asbestos stockpiles Msauli location stockpiles (tons) 6,768 SELLING PERIOD 12.28 months This calculation implies that Msauli will continue to sell asbestos until September 2003. 6.4.2 E mployment Currently, there are three partners (all of whom are retired) and four staff members employed at Hanova's head office. The Msauli mine in Barberton employs 20 people who are working on closing down and rehabilitating the mine. At this stage, it is anticipated that these people will remain in Hanova's employ until the end of June 2003. 6.4.3 Investment Hanova's assets include R40 million cash, and approximately R15 million in mining equipment at Msauli. These assets are frozen, pending the outcome lawsuits brought against the company. 53