July 27, 2017 / 11:59 AM / 2 years ago

UPDATE 2-Gold miners make provisions for possible settlement in lung disease lawsuit

* Lawsuit covers miners who contracted silicosis at work

* Anglo American sets aside $101 mln

* Gold Fields makes provision of $30.2 mln

* Settlement not a certainty

* Mining companies to attend appeal hearing in March (Adds Harmony Gold comment)

By Ed Stoddard and Zandi Shabalala

JOHANNESBURG, July 27 (Reuters) - Mining companies Gold Fields and Anglo American have set aside over $130 million between them for a possible settlement with miners who contracted lung diseases at work.

A class action suit, mostly relating to the fatal lung disease silicosis, was filed on behalf of miners in 2012 and has further unnerved an industry that has been battling for years with rising costs and generally depressed prices.

Anglo American said on Thursday it has set aside $101 million and Gold Fields said it had made a provision of $30.2 million.

The class action suit covers thousands of miners who contracted silicosis. The companies were granted the right to appeal a High Court ruling last year and Gold Fields said their case will be heard in South Africa’s Supreme Court of Appeal next March.

“The ultimate outcome of these matters remains uncertain, with a possible failure to reach a settlement or to obtain the requisite court approval for a potential settlement,” Gold Fields said in a statement. “The provision is consequently subject to adjustment in the future.”

Anglo American also said its provision was “subject to adjustment or reversal in the future.”

It no longer has gold assets but claims against it stem from the period before it divested completely from the sector in 2009.

Silicosis causes shortness of breath, a persistent cough and chest pains. Miners contract it from inhaling silica dust from gold-bearing rocks. It also makes people highly susceptible to tuberculosis.

Several mining companies have formed a working group on the issue, The Occupational Lung Disease Working Group. Gold Fields said it was “of the view that achieving a comprehensive settlement which is both fair to past, present and future employees and sustainable for the sector, is preferable to protracted litigation.”

Harmony Gold also said it would make a provision but could not provide details before its annual results, due out on Aug. 17.

“Harmony is in the process of finalising their year end finiancial results together with going through the necessary audit reviews and internal governance processes and that we will be recording a provision,” said Harmony spokeswoman Lauren Fourie.

AngloGold Ashanti declined to comment on whether it had set aside money for the lawsuit.

Sibanye Gold could not be reached for comment. (Additional reporting Tanisha Heiberg; Editing by Susan Fenton)

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