Kumba Iron Ore : Dingleton relocation update - First households move into new homes

The first phase in the relocation of the Dingleton community in the Northern Cape got underway today (Thursday, 20 November 2014) with the first households moving into their new homes in Kathu. The R4.2 billion project of Kumba Iron Ore, Anglo American's South African iron ore business, is an important element of Sishen Mine's western expansion, to ramp up production to 37 million tonnes by 2016.

In the current phase, 17 private home owners and the occupants of 54 municipal houses in the northern section of Dingleton are being relocated by end December 2014, with the rest to follow by the end of 2016. Two churches and one business - a guest house - are also included in the move, which is timed not to disrupt schooling for the children involved.

Dingleton and the mine are currently separated by a 500 meter buffer zone. The town was established by the then ISCOR in the 1960s to accommodate Sishen Mine employees. With mining activities encroaching upon the town from all sides, the quality of life of residents has deteriorated over time and many have moved to Kathu, 30 km away.

Currently, approximately 3 400 people remain in the town. To accommodate them, more than 500 new homes are being built in Kathu to replace the 309 privately-owned houses, as well 204 houses belonging to Kumba, Transnet, the SANDF and the municipality. Also included in the relocation are 24 businesses, educational and medical facilities, including a new clinic, a satellite police station and related infrastructure, seven churches (serving 16 church denominations), a town hall, offices and a community centre, roads, parks, an environmentally-friendly water, energy and sanitation supply, as well as all the needed bulk services.

The relocation follows an extensive consultation process with the community and other stakeholders, which started in March 2012, and is done in accordance with the Anglo American Social Way and the International Finance Corporation's sustainable performance standards. This makes provision for compensation for loss of assets at full replacement cost, livelihood restoration and informed consultation and participation.

Due to the difference in property values between Dingleton and Kathu the 309 private homeowners will see the value of their properties increase on average more than tenfold once they have relocated. Kumba will pay all capital gains tax that private property owners incur as a result of the relocation. All replacement houses are designed to be low maintenance and environmentally friendly.

The difference in rates and taxes and water tariffs home owners will be liable for as a result of the move will be paid in full by Kumba for the next 20 years (as well as partially during a five-year phase-out period). Each home owner will also receive a once-off inconvenience and curtain allowance.

The relocation plan makes provision for support for various training and educational programmes, as well as small enterprise development. Once relocated to Kathu, residents will have easier access to potential sources of employment, such as the town's commercial and industrial centres, and Sishen and other surrounding mines; as well as to skills training or educational facilities.

"We are dealing with people and their homes and will approach any challenges with sensitivity and empathy," said Yvonne Mfolo, Kumba's Executive Head of Public Affairs, at the handover of the new homes to their owners.