JOHANNESBURG (miningweekly.com) – The first phase of Kumba Iron Ore’s relocation of the Dingleton community in the Northern Cape officially got under way this week with the first households moved into their new homes in Kathu.

The R4.2-billion relocation project was an important element of Kumba’s Sishen mine’s western expansion, to ramp up production to 37-million tonnes by 2016.

The first phase, which would be completed by the end of December, would see 17 private homeowners and the occupants of 54 municipal houses in the northern section of Dingleton relocated. The rest of the community would be moved by the end of 2016. Two churches and one business – a guesthouse – would also be included in the move, which was timed not to disrupt schooling for the children involved.

Dingleton and the mine were currently separated by a 500 m buffer zone. The town was established by the former operators, resources group 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 had deteriorated over time and many had moved to Kathu, 30 km away.

Currently, about 3 400 people remained in the town. To accommodate them, more than 500 new homes would be built in Kathu to replace the 309 privately-owned houses, as well as 204 houses belonging to Kumba, State-owned logistics company Transnet, the South African National Defence Force and the municipality.

Also included in the relocation were 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 environment-friendly water, energy and sanitation supply; as well as all the needed bulk services.

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

Owing to the difference in property values between Dingleton and Kathu, the 309 private homeowners would see the value of their properties increase, on average, more than tenfold once they have relocated.

Kumba would pay all capital gains taxes that private property owners incur as a result of the relocation. All replacement houses were designed to be low-maintenance and environment-friendly.

The difference in rates and taxes and water tariffs that home owners would be liable for, as a result of the move, would be paid in full by Kumba over the next 20 years, as well as partially during a five-year phase-out period. Each homeowner would also receive a one-off inconvenience and curtain allowance.

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

“We are dealing with people and their homes and will approach any challenges with sensitivity and empathy,” said Kumba public affairs executive head Yvonne Mfolo at the handover of the new homes.