NPA seizes R52.5m in illegal mining proceeds in Namibia — in time to tick ‘greylisting’ box

20 Jan 2025

The NPA’s success on this front hopefully offers a template for going after the masterminds behind the illegal extraction and movement of gold in and from South Africa.

The Asset Forfeiture Unit in Mpumalanga, an arm of the National Prosecuting Authority (NPA), has seized R52.5-million – the proceeds of illegal coal mining – from 10 Namibian bank accounts.

In doing so, the NPA has ticked a vital box in South Africa’s scramble to exit its Financial Action Task Force (FATF) “greylisting” – and it did so just in time.

To wit, the NPA said in a statement on Monday that it had worked with South Africa’s Financial Intelligence Centre (SA – FIC), the Namibian Financial Intelligence Centre (Nam – FIC) and the Namibian Prosecutor-General’s office to root out the loot.

“... The value of about R52.5-million ... represents the proceeds of, and/or was used as instrumentalities, to commit massive alleged illegal coal mining in the Carolina area,” the statement said.

“On 2 December 2024, the SA – FIC, in collaboration with their Nam – FIC counterparts, obtained a Namibian FIC temporary freeze upon the funds of Jacobus Hosea Jordaan and his wife Elza.

The pair are among the main accused in the Carolina illegal coal mining case that on 6 December 2024 was transferred to the Mbombela High Court to November 2025 for trial. The NPA said other offences include money laundering and environmental crimes in the Carolina area of Mpumalanga, which has become a hotbed of illegal coal mining.

This is just the tip of a massive coal-coated iceberg.

“The illegal financial benefit obtained by the accused from the illegal coal mining and other offences in Mpumalanga allegedly amounts to at least R2-billion,” the NPA said.

The investigations stretch back to 2023 when the NPA obtained a provisional preservation of property order in the Mbombela High Court for a “…farm in the Carolina district, stockpiles/heaps of coal in two separate areas (coal ore material and “washed” coal), heavy duty mining machinery (yellow machines), equipment and motor vehicles (heavy-duty trucks, etc)” and lots of other stuff.

Hiding in plain sight

This was clearly a serious operation, and it is one of the blatant things about illegal coal mining in Mpumalanga – it is hiding in plain sight. Unlike illegal gold miners who mostly work deep underground with rudimentary equipment, the big “yellow machines” and infrastructure used for illicit coal cannot be easily concealed.

“Both Namibia and South Africa were greylisted a few years ago by the FATF for, amongst others, failing to sufficiently combat money laundering. The above-mentioned Namibian seizure orders will assist enormously in getting both countries off the FATF grey list,” the NPA statement pointedly noted.

Indeed, this is one of the remaining boxes that South Africa needed to tick to have the greylisting lifted, and the deadline to do so was January 2025.

“South Africa should demonstrate a sustained increase in investigations and prosecutions of serious and complex money laundering, in particular involving professional money laundering networks/enablers,” is prominent on South Africa’s FATF action plan, according to a statement issued last year by the Treasury, and the deadline to demonstrate this was this month.

It’s also of more than passing interest to note that as of 30 September last year, low-value electronic fund transfers (EFTs), debit and credit payments made between Common Monetary Area (CMA) countries, – Eswatini, Lesotho, Namibia and South Africa, were treated as cross-border transactions and subjected to greater due diligence requirements.

Such transactions had previously been treated as domestic payments, and one wonders if the ringleaders of this illegal coal operation were taking advantage of that to funnel cash to Namibia – though that would be a lot of “low-value” EFTs.

The SA Reserve Bank announcement on the issue last year said it was aimed at preventing “... criminals from having easy access to EFT payments to launder funds and ensure this misuse can be identified more effectively when it occurs.”

“This step also forms part of South Africa’s efforts to address several recommendations made by the FATF,” the Reserve Bank said.

Being removed from the greylist is crucial to South Africa’s economic recovery as such a listing is a deterrent to foreign investment and raises red flags for international banks when it comes to doing business here.

The NPA’s success on this front hopefully offers a template for going after the masterminds behind the illegal extraction and movement of gold in and from South Africa. The diabolical “surrender or starve” strategy used to force illegal miners to the surface in Stilfontein was not just regarded by many as inhumane.

It was also a case of going after the poor grunts – many of whom are coerced and exploited – without netting the big fish at the top.

When it comes to illicit coal, there are suspicions that we have reported on before that much of this activity is enabled by corruption at the Mpumalanga offices of the Department of Mineral and Petroleum Resources, which receives an unusual number of applications for “mining permits”.

Read more: Mining permits point to shady Mpumalanga scramble for coal

Such applications would be for open-pit operations of no more than five hectares and require little in the way of environmental and other regulatory compliance. And if you can get several of these permits on adjacent plots, presto! You can have a coal mine.

If these suspicions are correct, one arm of the South African state is undermining another. But the NPA at least has made headway in dealing with the scourge of illegal coal mining and transnational organised crime … and it has a trophy to show the FATF. DM

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Hiding in plain sight