Swaziland's Ngwenya mine extracts its ore and exacts its price
Since October 2011 Salgaocar has been mining the Malolotja Nature Reserve and shipping cheap, low-grade iron ore across the world.
Park guide Wiseman Dlamini will talk for hours about the 42 000-year-old Ngwenya mine, but point to the fresh-tilled earth and pipe spilling iron-red water into the Hawane Dam – the water source for Swaziland's capital, Mbabane – or ask him about the Indian company mining this Swazi-South African international nature reserve and he is quiet. As is almost everyone in Swaziland.
Since October 2011 Salgaocar has been mining the Malolotja Nature Reserve and shipping cheap, low-grade iron ore across the world. By allowing it, Swaziland has lost a potential world heritage site, fired its own conservation board and put Mbabane's supply of drinking water at risk, say environmental experts.
The impact of mining on the environment is an old story, but what is happening in Swaziland is particularly dramatic. A high school teacher is the author of the environmental impact assessment; Salgaocar, according to the Times of Swaziland, handed out iPads to ministers; there is no apparent plan to prevent iron-rich waste water from entering local streams and rivers.
The protocol violations, disregard for local communities, fear of speaking out and blatant corruption is emblematic of modern Swaziland and the increasingly despotic rule of King Mswati III, who owns – on behalf of the country – 60% of the nation's land.
Ngwenya mine sits in the mountainous and picturesque Malolotja Nature Reserve along Swaziland's northwestern border with South Africa. It is the last unspoiled mountain wilderness left in Swaziland. The reserve extends over an area of 18000 hectares, making it the largest proclaimed protected area in the kingdom.
After Anglo American mined an estimated 20-million tonnes of high-grade iron ore from Ngwenya during the 1960s and 1970s, the region became a conservation area. In 2004 Swaziland and South Africa combined Malolotja and the Songimvelo Nature Reserve into a single transfrontier conservation area. Unesco began supporting its application to become a world heritage site. A cluster of high-end shops sprang up next to the Ngwenya Glass factory.
But Anglo American left behind more than 32-million tonnes of ore.
On June 20 2011, Salgaocar called an environmental scoping meeting to talk to local stakeholders about the environmental issues surrounding reprocessing the "overburden" and "waste dumps", as Salgaocar reportedly called them at the meeting. Two weeks later, Swaziland signed a letter of commitment with Salgaocar and, 13 days after that, the environmental impact assessment (EIA) was published.
"That's basically the time it took them to type it," said a leading local environmental consultant close to the report. "I've been reviewing every EIA that comes out here for more than 20 years and this is the worst I've seen. Seasons, the rain and the wind matter – you have to observe a location for at least a year.
"A few people will benefit," said the consultant, shaking his head. "As a nation, we will be left with a legacy of degradation and pollution we will never get cleaned up. I haven't seen something this dramatic in all my years here."
"All the politics, all the money," said Mantoe Phakathi, an environmental journalist. "The environmental stuff was rigged by the authorities. Of course there will be pollution and there are no mitigating measures in place now. But you have to remember where we are. This is Swaziland. No one will speak."
The Times of Swaziland published a series on Salgaocar's mining of Ngwenya. Soon, Sivarama Prasad Petla, the chairperson of Salgaocar Swaziland, sent "an executive order" to all the newspaper's advertisers stating: "Your company should not under any circumstances whatsoever advertise directly or indirectly with the Times of Swaziland."
Times of Swaziland editor-in-chief Mbongeni Mbingo was furious. "Salgaocar is trying to intimidate our advertisers," he said. "It is upset because we are exposing corruption."
Salgaocar did not respond to repeated requests for comment for this article. The government mining engineer for the ministry of natural resources and energy, Sam Ntshalintshali, declined to be interviewed in person, later sending an email stating: "The office was not aware that the EIA was quickly finished" and denying all charges of corruption.
Ntshalintshali oversees the Swaziland side of the mining logistics, including environmental oversight. Asked whether he was worried about the water supply being affected, Ntshalintshali wrote: "Yes. However, likely effects could be as a result of erosion due to the heavy rains as the terrain in that area is steep."
Tucked in the mountains above Mbabane, the mine and its rich ochre has been at the centre of local communities for 42 000 years, according to 1967 Yale University carbon dating.
In the Middle Stone Age, early humans used Ngwenya's red haematite and glittering specularite in traditional ceremonies. Later, the San used the red ochre for their rock paintings. By 400CE, Bantu-speaking people were extracting and trading iron.
Locals believe ochre weakens the barrier between this world and the next. Young brides walk for hours to find it to smear on their faces, a tradition to ensure they are accepted by the groom's family. Old men sit over a plastic bucket of umcombotsi, a frothy red traditional brew of sorghum and ochre. A sangoma cakes her hair with thick minerals.
Pilgrims come from outside Swaziland too. Tourists hike along the mountain ridges, past endangered orchids. A mountain bike group leads morning rides. The Ngwenya Glass factory turns over R1-million each month from tourists and exports.
Corruption and mistakes
Swaziland's government approved the mine, as reported by the Times of Swaziland, before the environmental impact assessment or any other paperwork was finished. One of the impact assessment's writers recalled: "I was working on my section when I read the paper. The mine was already happening." He pauses. "I just started laughing."
The country's National Trust Commission submitted formal concerns to the Swaziland Environment Authority, the legally mandated institution to provide for and promote the protection, conservation and enhancement of the environment and the sustainable management of natural resources in Swaziland.
"The king himself called our chief executive saying 'do not let them talk'," said one trust commission member, speaking on condition of anonymity. "He said we could not fight for world heritage status anymore. He's a bully."
Mswati fired and replaced the trust commission's entire board in May. The staff's concerns were withdrawn. Fresh boards at different authorities mean many environmental agencies are scrambling, led by people with little knowledge of Ngwenya.
"There is no oversight. There is so little capacity now in government that it's barely functional," said Rod de Vletter, owner of Phophonyane Falls Lodge & Nature Reserve. "I just disassociate myself from politics and the king. Politics hasn't interfered with what I do. It's sort of laissez faire and that's fine."
Before finding the environmental consultant appointed to carry out the environmental impact assessment, Salgaocar approached a University of Swaziland biologist. He explained the procedure for a proper assessment. Salgaocar responded that it did not have that kind of time and asked for a list of the people "who would not be a problem".
The lecturer declined to be part of the project.
The assessment – written by high school teacher Dumile Glenrose Nhlengethwa, with sections copied off Ngwenya Glass's and the trust commission's websites – reads roughly.
"Unfortunately, during the time of the scoping meeting, Salgaocar had already acquired the permit," said Nhlengethwa. "My EIA was just a formality. There was nothing that anyone could do about it."
Several issues are immediately obvious in the assessment. It reports that 96% of surveyed homesteads have members in formal employment, but Swaziland's national average is, according to the CIA World Factbook, 40%. The report claims that when the mining is finished, Salgaocar will use boulders to cover the land and that the "finer rejects [of the boulders] will be on top to serve as topsoil for re-vegetation".
"Top soil is by definition organic," said the environmental consultant.
The environmental assessment claims that iron is selling for $70 a tonne. According to the Metal Bulletin Daily iron ore index, low-grade ore of 55% to 58% Fe content is quoted at $150 to $120 a tonne.
Perhaps most alarmingly, the assessment does not list which chemicals will be used to separate the iron from the earth and it does not discuss the impact of effluent discharges on the environment and local hydrology.
Tony Ferrar, chairperson of the Wildlife and Environment Society of South Africa and an environmental lawyer, laughs when he talks about the assessment.
"The poor writer, the high school teacher," said Ferrar, "was clearly hazy on the processes of iron extraction.
"The water will be polluted," said Nhlengethwa months after her environmental report came out. "But there was nothing I could do. They were already mining when I started the report."
Section 20(1) of the Swaziland National Trust Act states that interfering with the natural configuration of the land is prohibited. Section 20(2) states that, "for sufficient reason", section one can be scrapped.
The World Heritage Convention, which Swaziland signed, states that the primary mandate for all party countries is to protect Unesco sites and safeguard their integrity. Ngwenya mine is listed on the tentative list of world heritage sites.
Regarding international land, Swaziland is a signatory to the 1997 South African Development Community mining protocol, according to which member states are to "encourage a regional approach in conducting environmental impact assessments, especially in relation to cross-border environmental effects".
Malalotja crosses into South Africa and the iron ore will move through Mozambique. Yet, during the preparation of the environmental impact assessment, neither the consultant nor the government appear to have had any contact with South African authorities, despite the potential impact on the transfrontier park.
In reaction to the iPads allegation, Prime Minister Barnabas Dlamini told the Times of Swaziland: "The investor offered the gifts out of goodwill, out of generosity."
Ministers reported to have received these gifts for their hard work included Jabulile Mashwama, the minister of commerce, industry and trade, Macford Sibandze, the now suspended minister of tourism and environmental affairs, and Princess Tsandzile, the minister of natural resources and energy.
"Why did Salgaocar win? It gave the king €28-million just to get the licence," said a senior geologist at the geological survey and mines department. "It has confused the whole system because people now know if you want a licence you have to pay."
The geologist continued: "It undermines all the work I do. There is no professionalism. But the Constitution divests mineral rights into the crown, so his majesty takes everything."
He sat for a moment. "iPads …" he said as if to himself. "He's selling us cheap, eh?"
The mine is quiet. There is no infrastructure and no houses for the miners, just two earth-moving machines and a long line of rusty Mozambican trucks waiting for their loads.
When Anglo American mined Ngwenya, it set up an enormous industrial city in Swaziland, built a railroad to Mozambique and dredged Maputo harbour to accommodate large ships. The mine today shows no similar signs of development.
One muscular old Swazi rests at the wheel of his front-end loader.
"It is not good to take away this land because it is ours and it is beautiful," the miner said. "Swazis are very proud of these mountains. But Salgaocar knows what is best here. It is very smart."
It is. Salgaocar promised – and the state-controlled Swazi media publicised it widely – that 2 500 new domestic jobs would be created.
When the mine opened, more than 500 hopefuls waited outside the gates. Nkosinathi Simelane (27) watched his friends and family wait in line. After many hours, a Salgaocar representative greeted the hopefuls. "He said we each have to mail in a form to apply," said Simelane, who lives 2km from the mine. "We said, 'A form? Can't you see we are fit to mine?'"
This mining does not in fact take many people to do it.
"I know everyone they have employed," Simelane said. "Fewer than 20 men. And the truck drivers …" And Sunday Times reporters have exposed the fact that Salgaocar is using Mozambican and South African trucks to avoid paying import taxes.
When the mine was opened, Salgaocar put on an airshow for Mswati. Propeller planes performed tricks. Helicopters circled and, in unison, seemingly bowed to the king.
Meanwhile, at a café nearby, local Ngwenya business owners held a meeting. The tone on the ground was nervous. They warned each other: "Be careful. Salgaocar's men are dangerous, real gangsters, con men."
"Does it make sense for Salgoacar to truck low-grade Swazi ore to Mozambique and ship it back to India?" asked one shop owner. "Will it actually make money?"
"I don't know what its goal is," said Ferrar. "But there is something else that it wants other than this low-grade iron, I can say that."
'To remove the mine dumps is getting the foot in the door," said Mickey Reilly, who runs the kingdom's big game parks and is considered the country's "father of conservation".
"Their licence is just to remove the iron dumps, but I don't believe them. There's a good likelihood there's more iron underground – raw material. We'll be paying for all this in 10 years."
"A lot of it doesn't make sense," said another consultant. "But what I can tell you is Swaziland is going to be taken advantage of and the king will make money."
King Mswati has R1.6-billion in his personal accounts, according to Forbes, and owns in trust 60% of Swaziland, according to the World Bank.
According to the Swaziland Investor Roadmap, the Constitution of Swaziland vests mineral and mining rights in the king, who holds them in trust for the Swazi nation. A national trust, known as Tisuka Taka Ngwane (Pillars of Swaziland), is believed to have a large portfolio of properties, including several shopping malls, but few details are publicly available. It is reported to receive all mining royalties.
"The king's business is Tisuka," said Sibusiso Mazibuko, who works at Swaziland's home affairs office. "It's obvious he is paid, because it's him who grants everything here. This is his land. That is his iron."
According to the Mines and Minerals Act of 2011, the holder of the mineral right must pay royalties on the gross sale value of minerals to the iNgwenyama – King Mswati III.
In terms of state participation, Mswati shall acquire a 25% shareholding without any monetary consideration and the government, with no monetary obligation, a further 25%. The remaining 50% shareholding will go to Salgaocar. This is in line with Mswati traditionally collecting a 25% "commission" on major deals, a stalling point on the pending South African bailout.
Repeated attempts to reach Mswati's spokespersons for comment were unsuccessful.
In addition, according to the impact assessment, Salgaocar will pay the government a transport levy of $0.50 a tonne of ore exported for the maintenance of roads. This levy should derive about $6-million for the 12-million tonnes exported. How or where this money will be spent has not been explained.
In sum, the impact assessment reports that the reprocessing is expected to derive about $64.3-million profit before tax at $70 a tonne for the ore sold. If sold at the proper international price of $150 a tonne, the 12-million tonnes would bring in $180-million.
End of an era
Dlamini will be leaving his job as Ngwenya's park ranger. He says Salgoacar has asked him to join as a supervisor and he cannot stay at the park unless he joins the mine.
"My destiny is not in mining, but in conservation," he says. "It's their mandate, not mine."
He is applying to be an environmental education officer.
He stops and rubs his hands against the red rock wall. A thick glittering red coats his hands. "It's glossy from the specularite. It's always beautiful." He rubs it across his face and looks down at the lake deep inside the mine.
"They say the water came to stop Anglo American from mining," Dlamini says, faintly smiling. "Swazis, we still come from all over to collect this water to use it for strength against …"
He catches himself. "Hopefully we will be able to continue collection in the future. We need it."
Impact beyond the immediately obvious
Cascading off the mountain mine, streams head west into South Africa, south to Swaziland’s tourist centre, Ezulwini, and east to the Hawane Dam. The dam supplies water to the country’s capital and sits 5km from the mine. A borehole already spews dark-red iron waste into a stream. The reprocessing factory will need more than 8288m3 of water each day (equivalent to about 3.5 Olympic-size swimming pools a day). Mbabane extracts about 5.50-million cubic metres annually from the Hawane Dam, which has a net storage capacity of 3.15-million cubic metres. The factory will consume almost six times the storage capacity of Hawane Dam over its life span.
According to the impact assessment, trucks will make 223 trips a day across Swaziland, each rolling 32 tonnes of material across the nation’s transportation artery through its two major cities and to Maputo. Swaziland is a major tourist destination because it provides an excellent north-south road between the Kruger National Park and KwaZulu-Natal. “Damage that road and this whole thing collapses,” said a Ngwenya shopkeeper.
The two major businesses closest to the mine are the Ngwenya Glass factory, which produces hand crafted glass products, and Peterstow Aquapower, an international company that produces high-precision, deep-mine hydraulic drilling systems. High levels of dust, derived from exposed ore stockpiles, would be the end for both industries.
The Malolotja Nature Reserve is the only place in the world where the endemic orchid Disa intermedia is protected. Linda Loffler, a leading local botanist, wrote to Salgaocar, pleading that it remember the orchid and its critical habitat and sole pollinator. It wrote back that an “alternative habitat will be established”. But the mining started three months ago and there is no orchid habitat.