Mining giant Sibanye gold has set aside R1.1 billion as a settlement with miners who contracted lung diseases at work.

The settlement announcement comes after months of consultations regarding compensation by an industry working group comprising Sibanye Gold, Harmony Gold, African Rainbow Minerals, Anglo American, AngloGold Ashanti and Gold Fields.

The working group was formed in 2014 to address issues relating to the compensation and medical care for occupational lung diseases in the South African gold mining industry.

Sibanye and some of the working group companies were served with a consolidated class action application on 21 August 2013, but made an appeal as they rejected liability in respect of the claims brought.

On 13 May 2016, the South African Gauteng High Court ordered, among other things: (1) the certification of two classes, and (2) that the common law be developed and amended.

Class one is set to reflect (a) a silicosis class comprising current and former mine workers who have contracted silicosis and the dependents of mine workers who have died from silicosis; and (b) a tuberculosis class comprising current and former mine workers who have worked on the mines for a period of not less than two years and who have contracted pulmonary tuberculosis and the dependents of deceased mine workers who died from pulmonary tuberculosis.

The second class will make provision that where a claimant commences suing for general damages and, subsequently, dies before close of pleadings, the claim for general damages will be transmitted to the estate of the deceased claimant.

Anglo American and Gold Fields have formally notified shareholders in their latest half-year financial statements that they have set aside R1.34 billion and R400 million, respectively, towards a trust to pay compensation to former gold miners suffering from occupation-related silicosis and TB.

However, the Supreme Court of Appeal granted the miners leave to appeal against all aspects of the class certification judgement of the High Court delivered in May 2016. The appeal hearing before the Supreme Court of Appeal is scheduled to be heard from 19 – 23 March 2018.

The court sanction of the agreement remains uncertain and, accordingly, the provision is subject to adjustment in the future.