Dubai-based owner of South Africa mine waste dam probing breach

The Jagersfontein-Charlesville area in the Free State where flooding from a disused mine has caused the evacuation of hundreds of people from their homes and the death of at least three people. Image from the South African Government.

Stargems Group, a Dubai-based diamond merchant, said it’s probing the collapse of a dam containing mining waste in South Africa that triggered heavy flooding and resulted in three people dying and property being damaged.

About nine houses were swept away and 20 damaged when the reservoir wall at the abandoned Jagersfontein diamond mine gave away on Sunday, Nathi Shabangu, a spokesman for the Department of Mineral Resources and Energy, said in a text message.

In addition to the three people killed, four were reported missing, while 23 others have been treated for hypothermia and four for broken legs, Vincent Magwenya, spokesman for President Cyril Ramaphosa, said in a statement. Ramaphosa will visit the affected area Monday.

The mine in South Africa’s Free State province, formerly owned by De Beers Plc, was shut in the 1970s. The disaster adds to the sector woes in Africa’s most-industrialized nation that’s trying to stem illegal mining, theft of equipment and robbers stripping metal from power cables.

The tailings dump is owned by Stargems’s unit Jagersfontein Developments Ltd. It acquired the shareholding of the tailing dump from billionaire Johann Rupert’s Reinet Investments S.C.A in April. Jagersfontein Developments will offer 20 million rand ($1.2 million) to assist the community, an external spokesman for the company said in an email.

“A full due diligence was conducted prior to this acquisition showing that the assets, including the dam were safe and secure,” according to the email.

The latest incident resulted in a loss of power in the small town of Jagersfontein, about 100 kilometers (62 miles) southwest of Bloemfontein, the provincial capital, and other nearby townships. Floodwaters and mud cut off Eskom Holdings SOC Ltd.’s access to a key electrical substation. The utility said Monday it’s restored power to the mine and its making progress to restore supplies to the town.

De Beers ceased operations at Jagersfontein in 1971 and sold the operation, along with its associated liabilities, in 2010, the company said in an emailed statement.

“We share the concerns of the nation for the residents of the area,” it said. “We stand ready to provide technical assistance and support to the government should it be requested by the Minerals Council South Africa.”

Minerals Council South Africa, a mining industry lobbying group, said the cause of the dam collapse was unknown.

(By Felix Njini, with assistance from Rene Vollgraaff)

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