Communities kept in the dark about their money from mining royalties

Corruption Watch on Tuesday released its report into management and transparency of mining royalties conducted over the past two-and-a-half years.
Corruption Watch on Tuesday released its report into management and transparency of mining royalties conducted over the past two-and-a-half years.
Image: 123RF/ fesenko

Research conducted by Corruption Watch has revealed that there is a lack of  transparency as to what happens to the funds from mining royalties. 

On Tuesday Corruption Watch released its report into management and transparency of mining royalties conducted over the past two-and-a-half years.

The research was conducted on two particular systems of community royalties administrations – Lebowa Trust in Limpopo and the development accounts in North West by the Bakwena Ba Mogopa community.

Although both systems of administration had been discontinued, researchers studied them and their evolution into an equity-sharing mechanism which is now being implemented.

Corruption Watch legal researcher Mashudu Masutha, said communities did not know who receives the mining royalties and how the money is spent.

She said researchers found that money would leave the development accounts to which the royalties were paid but there was no indication as to what the funds did in the development of the community.

“It was difficult to make sense as to what was happening to the mining royalties,” she said.

Researchers also found that divisions within the traditional council caused a lot of problems as mining companies would refuse to pay royalties until it was clear who was the rightful leader of the council.

Mining royalties were established during the time of the apartheid homelands regime. When the system ended, the Mineral and Petroleum Resources Development Act created a provision of contractual royalties.

This acknowledged that there were communities that held rights and money in the mining operations taking place on their land.

Mining royalties were paid into the development accounts which were within provincial government.

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