By Philip Mattera
Anglo American, one of the world’s largest mining companies, had its origins in the gold and diamond mines of South Africa, and after the Second World War it expanded and diversified to the point that it controlled large portions of that country’s economy. It later sold off its non-mining businesses, moved its headquarters to London, and spun off its gold mining operations into the company now called AngloGold Ashanti. Anglo American remains a major player in platinum, copper and diamonds (through its affiliate De Beers). It has been embroiled in environmental and human rights controversies in a variety of countries.
For decades, Anglo American was known as the company that got rich from exploiting oppressed black miners within the apartheid economy of South Africa. It has worked hard to change that image, though it still has tense relations with mineworkers (especially over safety issues) in its South African operations. The company has also been at the center of controversy over environmental or human rights issues in countries such as Ghana, the Democratic Republic of the Congo and Peru.
Environment and Product Safety
The operations of Anglo American and those of its spinoff AngloGold have been associated with environment problems in numerous countries. Here are some examples:
Platinum mining in South Africa
Anglo Platinum, a subsidiary of Anglo American known informally as Angloplat, is the world’s leading producer of platinum, most of which is used in automobile catalytic converters and as jewelry. The company has long had a problem with the volume of sulfur dioxide its smelters emit into the air. At a 2003 public meeting in Rustenburg, company officials admitted that emissions levels had been on the rise and the result was “not a pretty picture of what is being done to the environment.”
Angloplat was putting about 150 tons of SO2 into the atmosphere each day, while its competitor Impala Platinum had cut its emissions to a much lower level. Angloplat brought its emissions down in 2004 and 2005, but they jumped 8 percent in 2006 and 13 percent in 2007. A 2004 thesis written by Sunette Steyn at the University of Pretoria concluded that, despite some improvements made by the platinum industry in Rustenburg to control particulate pollution, problems remained. Among the reasons cited were slow commissioning of new technology and the fact that smelter management “does not take environmental management seriously enough and often the policies set by top management (head office) and not enforced at ground level.”
Zinc mining in Ireland
Anglo American’s Lisheen mine, located amid an agricultural region in northern County Tipperary, was associated with water quality problems in the Drish River and the Rossestown River, both tributaries of the River Suir, according to reports of the Environmental Protection Agency Ireland. In April 2006 EPA Ireland issued a press release saying that an analysis of sediment in the Drish and Rossestown Rivers found “unsatisfactorily high levels of metals, including lead and zinc.” The agency advised farmers to prevent farm animals from having direct access to the affected stretches of the river. The advisory was later lifted. Anglo sold the operation in 2010.
Zinc mining in South Africa
A scientific study published in the journal Environmental Research found that children living near Anglo American’s Black Mountain zinc mine in South Africa had elevated levels of lead in their blood compared to children in a comparison town about 40 km away and compared to what would be expected in a rural setting. The study found that blood lead levels averaged around 16 μg/dL, with 98 percent of the sample having lead levels equal to or greater than 10 μg/dL, the threshold level for adverse health effects established by the U.S. Centers for Disease Control. The study also reported: “Overall, children with raised blood lead levels performed less well at school relative to other children.” Anglo sold this operation in 2010.
Copper and gold mining in Alaska
In August 2007 Anglo American announced that it had agreed to partner with Northern Dynasty Partnership in the development of the controversial Pebble cooper and gold mine project in southwest Alaska by Bristol Bay, the headwaters of the world’s largest wild sockeye salmon fishery. Concerned about the possible impact of the project on salmon production and the overall environment, local groups such as the Renewable Resources Coalition and Nunamta Aulukestai (Caretakers of the Land) have been campaigning against it. In 2013 Anglo withdrew from the project.
Planned copper mine in Peru
Quellaveco, a large copper mining project in southern Peru that Anglo has been developing for more than 15 years, has been strongly criticized by environmental groups. Friends of the Earth International (FoEI) has warned that local agriculture and cattle raising in the highly arid area could be seriously harmed by the enormous amount of water the mine would require. FoEI’s critique was based on an independent environmental impact assessment conducted by Robert Moran titled The Quellaveco Mine: Free Water for Mining in Peru’s Driest Desert? Moran took issue with the company environmental impact assessment claim there would be no significant impacts. Instead, he concluded that the project “is likely to have numerous long-term, negative impacts on water quality and quantity in the operational and waste disposal areas, but most importantly, will assuredly aggravate the already contentious competition for water in one of the driest irrigated regions of the world.”
During the decades that Anglo American dominated gold mining in apartheid South Africa, the company’s relations with its largely black workforce were often contentious. In 1983 Anglo and other gold mining companies agreed for the first time to negotiate a contract with the National Union of Mineworkers (NUM, representing black miners), but four years later Anglo crushed an NUM strike by firing 40,000 workers.
The NUM frequently criticized Anglo’s record on health and safety. In 1988 the union estimated that 46,000 workers had been killed in South Africa’s gold mines since the beginning of the century. That same year, seven workers died from lethal fumes caused by the burning of polyurethane foam during a fire at an Anglo American mine. An industry committee had recommended the removal of the foam from all mines after a similar fire in 1986 caused the deaths of 177 workers at a mine owned by another company.
In 1995, 104 workers at an Anglo American gold mine were killed when the cable controlling an underground train snapped and the train plunged down a shaft onto an elevator transporting miners. At a memorial service for the victims, an NUM official blamed racism for the disaster: “If a black man’s life was not considered cheap this could not have happened.”
In July 1999, 19 miners perished in a methane gas explosion at the Mponeng mine. In November 1999 a worker doing maintenance at AngloGold’s Ergo processing facility died after inhaling cyanide gas. In the following years the deaths kept happening—often several at a time. Sometimes they were due to mechanical problems, other times they were linked to earth tremors, especially at the Savuka and TauTona mines near Carletonville.
Anglo’s platinum operations have also had contentious labor relations—both before and after the end of white rule. Legal and illegal strikes have taken place virtually every year, and management has often responded aggressively. Anglo’s Leplats subsidiary, for instance, fired 1,200 workers after a wildcat strike in 1990. The remaining miners engaged in a six-day underground sit-in. Anglo sacked its entire workforce of 28,000 after a wildcat work stoppage in 1996 and then began evicting the workers from their hostels. At least five workers were later killed in violent clashes with police.
While wages were most often at the center of the labor disputes, a 2002 walkout at Rustenburg’s base metal refinery was prompted by workers’ dissatisfaction with changes in their medical coverage. A 2007 strike was a response to the increasing use of casual and contract labor.
Labor-management tensions have also been intensified by what unions argue is an unacceptably high rate of accidents and fatalities at Angloplat’s mines, including 18 deaths in 2006 and 24 deaths in each of the previous two years. The issue boiled over in 2007 after five workers were killed in accidents at the company’s platinum mines over a period of two weeks. Responding to public pressure, the company suspended those operations for seven days, though it was unclear whether the shutdown did anything to improve safety conditions.
By late 2007, the NUM was fed up with the number of workplace accidents and deaths at Angloplat, AngloGold and other mining companies. In December the union staged a one-day national strike to protest unsafe working conditions. “The bosses are concerned only about huge bonuses while poor workers are getting killed in the process,” said NUM general secretary Frans Baleni. “These accidents are reaching alarming proportions.” Annual deaths at Anglo American facilities have ranged between 40 and 50 in each of the past few years.
In September 2011 a group of former South African gold miners brought suit against Anglo American in Britain, demanding compensation for the lung diseases they said they contracted because of poor ventilation in the company’s mines.
In the autumn of 2012 Angloplat's and AngloGold Ashanti's operations were hit by an eruption of militancy among South African miners.
Anglo American and its spinoff AngloGold have been in bitter conflict with subsistence communities and farmers in countries such as Ghana and South Africa, where villagers have been displaced from their traditional lands to make way for mining operations.
In Ghana, Anglo has complained that the environmental problems experienced at mines such as Obuasi are the fault of reckless behavior by illegal galamsey miners. Yet many of these galamseys are former farmers who were forced off their land by expanding mining activity. An October 2006 ActionAid International report on conditions at Obuasi estimated that 60-70 percent of galamseys were in that category. Critics such as ActionAid have accused AngloGold of human rights violations against the galamseys, but the company has vigorously denied the charges. Yet there is no doubt that tensions between AngloGold and the galamseys have continued to escalate.
A controversy over displacement also exists at another major Ghanaian gold mine, Iduapriem, which was developed in the 1990s by Australia’s Golden Shamrock Mines with financing help from the World Bank’s International Finance Corporation. In 1996 Ashanti took over Golden Shamrock and thus its interest in Iduapriem. Anglo obtained a controlling interest in 2004 when it purchased Ashanti.
An April 2007 article in the Ghanaian publication Public Agenda reported on interviews with farmers cultivating land near the Iduapriem mine who said they had been prevented by AngloGold security guards from accessing their land, with “almost all the footpaths and other routes…farmers…had been using since time immemorial to get to their farms…rendered impassable by mounting heaps of waste rock dumped all over their community over the years by the AngloGold Ashanti mine.” Other farmers have lost their land entirely. Despite receiving modest cash compensation, they remained angry that they were not been given new land to cultivate, as was promised in the 2003 Resettlement Action Plan agreed to by Ashanti.
In South Africa, Anglo Platinum has been embroiled in a controversy over its relocation of 10,000 people from the Ga-Puka and Ga-Sekhaolelo villages in Limpopo province to allow for an expansion of the company’s Potgietersrust Platinum operation. Although the company promised to pay for new homes for the villagers, it faced lawsuits and protests over the plan, including one in which a group of women faced down company bulldozers. At a June 2006 protest over the arrival of Angloplat drilling teams, police opened fire with rubber bullets as well as some conventional ammunition, causing more than two dozen injuries. The Limpopo controversy flared up again in March 2008 when a BBC Radio feature and a new ActionAid report both provided more details on the dislocations. For example, ActionAid quoted residents of the village of Ga-Pila who refused to relocate but soon found themselves without water, electricity and other basic services. The report quotes one villager as saying that a mine official “told us they were cutting the electricity to force us out. He very clearly told us that” (p.17). The company put the blame on local officials. Anglo American put out a press release and a 44-page document denying that residents had been forced off the land, defending the level of compensation provided and insisting that it in no way directed police to use force against demonstrators.
Democratic Republic of the Congo (DRC)
In October 2002 the United Nations Security Council published a report (Document S/2002/1146; no longer on the UN website) criticizing the role that private interests, including mining companies such as AngloGold, had played in exploiting the DRC’s resources amid the confusion of civil war in the 1990s. Anglo was among the firms accused of violating OECD ethical guidelines for multinationals. Like many other companies, Anglo strongly objected to being included in the report, issuing a statement insisting that it was “confident that, at all times, our minimal involvement in the DRC has been fully compliant with international legal norms.” In October 2003 the UN Security Council, chastened by the uproar, published a revised version of the report that in effect apologized for including the list of alleged violators of OECD guidelines.
AngloGold may have thought that its DRC public relations problems were over, but in June 2005 Human Rights Watch published a report titled The Curse of Gold charging that AngloGold was very much in violation of OECD guidelines because of actions taken in relation to gold mining rights it acquired as part of the merger with Ashanti. The report accused the company of violating a UN arms embargo by making payments to a brutal militia group. Noting that AngloGold purported to be committed to corporate social responsibility, Human Rights Watch insisted that the company “should have ensured their operations complied with those commitments and did not adversely affect human rights. They do not appear to have done so. Business considerations came above respect for human rights” (p.2).
AngloGold admitted making the payments to the militia group but vowed it would not do so again. It then carried out a review of its operation in DRC to “determine whether this activity could be conducted with integrity.” Not surprisingly, the company concluded it could do so, adding: “It is our belief and hope that our presence contributes to an improvement in the economic prospects for the Democratic Republic of Congo and, thereby, reinforces the peace process.”
De Beers, which took control of the diamond mining industry in South Africa in the late 19th Century, was itself taken over by Anglo American and the Oppenheimer interests in 1929. De Beers came to dominate the global diamond trade through an entity called the Central Selling Organization that rigidly controlled supplies of the gems—sometimes by force. In 1990 De Beers was divided into two parts—a South African-based operation focused on procuring mined diamonds and De Beers Centenary AG, based in Switzerland, which oversaw worldwide sales. De Beers and Anglo American were both publicly traded, but each in effect controlled each other through cross-holdings, with the Oppenheimers ultimately in charge.
It was not until the late 1990s that De Beers’ control of the diamond market began to appear vulnerable. Companies such as Rio Tinto and BHP staked positions in big new diamond finds in Canada, and producing countries such as Australia and Russia became more significant players. Longstanding antitrust cases—including an action by the U.S. Department of Justice alleging price-fixing of industrial diamonds—were pending against De Beers in the United States, making it impossible for directors of the company to visit America.
De Beers was also contending with criticism over its alleged involvement in the trading of diamonds mined amid bloody conflicts in Africa. During the early 1990s there were reports in publications such as Newsweek (March 15, 1993) and the London Guardian (March 4, 1993) suggesting that De Beers was buying diamonds from the violent rebel group UNITA, which had been waging a bloody war against the government of Angola for most of the previous two decades.
The issue came to a head in late 1998, when the human rights group Global Witness published a report about the role of illegal diamond sales in financing the Angolan civil war. The report documented the extensive involvement of De Beers in Angolan diamond production and argued that the opaque trading system created by De Beers made it possible for gems from renegade groups such as UNITA to enter the market.
Initially, De Beers simply denied doing business with UNITA. This did not quell the controversy. Global Witness challenged De Beers to develop “a more accountable way of operating which tightens controls on ‘outside’ goods from conflict zones.” Questions were also raised about the role of diamonds in financing rebel groups in other countries such as Sierra Leone and Liberia. The whole industry was under a cloud.
One way the Oppenheimer interests responded to the situation was with structural changes to De Beers. In July 2000, it was announced that the company would no longer act as a monopoly for the world diamond supply and would instead focus on boosting global demand for the gems, including those from its own mines which were to be sold for the first time under the De Beers brand. Then, in 2001, De Beers was taken private, with the Oppenheimers and Anglo American each holding 45 percent. The remaining 10 percent was put in the hands of Debswana, a mining venture co-owned by De Beers and the government a Botswana, a major source of diamonds. (The Botswana government share was later increased to 15 percent; then Anglo bought out the Oppenheimers and increased its share to 85 percent.)
De Beers also decided to go from being on the defensive about its diamond sourcing to taking the lead in the campaign to address the conflict diamond issue. In October 1999 De Beers announced it would stop buying new diamonds from Angola. The following year, the company surprised even its critics by pledging that it would not trade in conflict diamond from any source and that it would back that promise with written guarantees. Global Witness welcomed the move as a “major first step,” but it asked for clarification on how the pledge would be audited and whether De Beers could “give an absolute guarantee that it will never again buy such conflict goods from rebel areas.”
Skeptics, meanwhile, pointed out that the suppression of conflict diamonds served the interests of De Beers by restricting global supply and thereby raising the value of its purportedly untainted gems. In a front page story, the New York Times marveled: “Turning necessity into a virtue with the same skill it has used for decades to promote diamonds as glittery icons of love and beauty, it recast and began promoting itself as the squeaky-clean crusader.”
There was also speculation that De Beers’ newfound ethical position might earn it a settlement of its U.S. antitrust problems. (That occurred in 2004, when De Beers paid the maximum fine of $10 million to resolve the criminal charges.)
While De Beers was looking for ways to benefit from the effort to abolish conflict diamonds, human rights groups kept pushing for deeper reforms. That began to happen in May 2000, when representatives of the diamond industry and diamond-producing countries met in Kimberley, South Africa with key non-profit organizations. With support from the United Nations, this initiative resulted in the creation in 2002 of the Kimberley Process, a joint government, industry and civil society effort to curb the flow of conflict diamonds through a certification system.
Human rights groups have supported the Kimberley Process, but they point out it cannot work effectively until the diamond industry lives up to promises about self-regulation it adopted in 2002. A November 2006 report by Global Witness points out that the industry has still not created an auditable tracking system, has not done enough to monitor suppliers to be sure they are not evading Kimberley certification, and has not improved the transparency of its internal regulatory procedures.
Watchdog Groups and Campaigns
Key Reports and Books
Anglo American's Track Record: Rhetoric or Reality? by Philip Mattera (Renewable Resources Coalition 2008)
Anglo American: The Alternative Report (War on Want, 2007)
Anglo American and the Rise of Modern South Africa by Duncan Innes (1984)
A Clash of Cultures (and Lawyers): A Case Study of Anglo Platinum and its Mogalakwena mine in Limpopo, South Africa by Leanne Farrell et al. (2009)
Uranium from Africa (SOMO and World Information Service on Energy, July 2011).
Note: This page draws from a corporate profile originally prepared by the author for the Crocodyl website in September 2008.
Last updated November 15, 2013.