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The Tipping Point for South Africa

When things go wrong, usually a raft of big issues initially pile up. But after a critical mass of problems materialize, it's often a seemingly small issue that finally tips things into total chaos.

This may be it for South Africa: a lawsuit from a small group of miners, who fought the company and won.

Last week, major miner Anglo American agreed to settle with the miners, who filed suit 10 year ago claiming they contracted respiratory disease working down Anglo's shafts. The company agreed to pay compensation to the victims, without admitting liability.

The amount of the settlements haven't been disclosed, but they're certain to be sizeable. And these 23 claimants could be just the tip of the legal iceberg.

The lawyer who brought the case against Anglo said afterward that this should serve as a precedent for further claims against South Africa's miners. The law firm reportedly has another 4,000 mine workers already lined up to file similar suits. Lawyers noted this could involve up to 30 different gold companies.

With the lid now off for such claims, the costs for mining companies could get big fast.

This comes at a horribly inopportune time for South Africa's mining industry. Firms here are already struggling with ballooning labor and operating costs, as well as deteriorating, difficult mines.

A wave of compensation payouts could be the straw that breaks the golden camel. It sounds like a small thing, but after so many big problems the South African industry may simply not have the strength left to weather even a mild storm.

Here's to the tipping point,

By. Dave Forest




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