Over 100,000 Zambians are trying to sue the mining giant over alleged environmental contamination, and they want investors to act too.
Investors in mining giant Anglo-American who brandish their ESG credentials are under pressure to engage with the firm on a class action lawsuit being brought by 140,000 Zambian women and children who say they are suffering from lead poisoning allegedly caused by Anglo-American South Africa’s (AASA) negligence with regards to the Kabwe mine in Zambia.
In a letter to coincide with Anglo-American’s annual general meeting held on Wednesday this week , shareholders who publicise their commitment to ESG, were asked to take up the matter with company’s board and management team.
The reputational and litigation risk associated with the mining industry has been under the spotlight since the tragic Brumadinho mine collapse in 2019. The associated environmental risks are also of concern, with a top environmental prize being awarded this month to Alessandra Korap Munduruku for community efforts to stop mining development by Anglo American in Brazil’s Amazon rainforest.
The Kabwe mine operated between 1906 and 1994 and is alleged to have been within AASA group’s control from 1925 until 1974. Those behind the case, South African Attorneys, Mbuyisa Moleele Attorneys, in collaboration with London-based human rights lawyers, Leigh Day, say during this time it was one of the most productive mines in the region and AASA allegedly is liable because it played a key role in managing the operations of the mine, which resulted in heavy contamination of the local environment with lead.
This contamination has poisoned the local community over several generations, and it is alleged that this risk should have been foreseen by AASA at the time and it is negligent in failing to minimise harm to the community.
Anglo American has denied the claims, saying it provided certain technical services to the mine, but at no stage owned or operated the mine.
“An attempt is being made to hold AASA liable for a mine we have never owned nor operated and for pollution and harm that others have caused and freely acknowledged as their responsibility.” Anglo American said in a statement.
“We do not believe it is correct for the claimants to attempt to attribute legal responsibility to AASA for the current situation in Kabwe.”
ESG Investor understands that Anglo American shareholders who received the letter include JP Morgan, Bank of America, UBS, Credit Suisse, BNP Paribas, Neuberger Berman, Morgan Stanley, Invesco and Northern Trust.
The South Gauteng High Court in Johannesburg is currently hearing the case and is to decide whether it will proceed to trial.
Scrutiny of the industry is on the rise with Brazilian mining company Vale paying US$55.9 million under US Securities and Exchanges Commission (SEC) rules to settle charges stemming from the 2019 Brumadinho dam collapse that killed 270 people. A case is being brought by those affected by the disaster in UK courts next April.
Asset manager Abrdn has also been engaging with major mining companies, including Vale and Rio Tinto on cases of sexual harassment and assault in the industry.