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SA Gold Mining Cos. Settle Class Action Suit For $390M, May Pay More

A group of South African gold mining companies fighting a class action suit brought by mineworkers who contracted lung diseases including silicosis and tuberculosis as a result of working in the mines, have reached a settlement deal for 5 billion rand ($390 million) — an amount they had already set aside earlier.

The agreement, which comes after three years of negotiations and is the first class action settlement of its kind in South Africa, places no limit on the number of potential claimants entitled to treatment or compensation and the payout could potentially be worth substantially more.

The settlement between the workers and the mining companies — Harmony Gold, Gold Fields, AngloGold Ashanti, Sibanye Gold, African Rainbow Minerals and Anglo American — who had formed the Occupational Lung Disease (OLD) working group to deal with the issue, will now have to be ratified by South Africa’s South Gauteng High Court.

A quick settlement was anticipated earlier after the workers, who won the right to proceed with legal action as a class by a South African judge, brought in US attorney Richard Spoor, who has won cases against big tobacco companies in the US.

All workers suffering from silicosis or tuberculosis, who had worked in the companies’ mines at any time since March 1965 are eligible for compensation. Officials from a trust set up for the purpose, will fan out across the region to help track down former workers who need treatment or deserve compensation.

Under the terms of the settlement, the mining companies will have to pay out 1.4 billion rand ($111 million) over the first two years to settle compensation claims. The mineworkers’ lawyers will receive 355 million rand ($28 million) in legal fees.

According to details made available, Anglo American has set aside $101 million, Sibanye Gold $82 million, Harmony Gold $70 million, AngloGold Ashanti $63 million, Gold Fields $40 million and African Rainbow Minerals $32 million for the settlement.

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