Anglo American and De Beers, the mining giants, were yesterday hit with a $6.1bn (£3.9bn) lawsuit for alleged gross human rights violations during the apartheid era in South Africa.
The class action case will be heard in the US and prosecuted by Ed Fagan, the lawyer who made his name in a successful claim against Swiss banks that held onto the deposits of Jews killed by the Nazis.
The case singles out Anglo American and De Beers as among the chief economic beneficiaries of the apartheid system, which severely restricted the freedom of South Africa's black population until majority rule was introduced in 1994. Shares in London-listed Anglo American dropped 3.3 per cent to 940p. The company, which said it will vigorously contest the case, owns 45 per cent of De Beers, the diamond business.
A South African law firm, Ngcebetsha Madlanga Attorneys, is behind the lawsuit, which seeks money to compensate miners who suffered under apartheid, many of whom are still alive. About 100,000 workers are party to the action, though any reparation won will go to poor black communities, rather than individuals.
John Ngcebetsha, senior partner at the law firm, said apartheid produced such cheap labour that it was "tantamount to slavery". He added that key laws of the apartheid regime, such as the pass laws, which restricted the movement of black people and created a captive labour force, were "engineered by the mining industry".
Anglo American reacted with fury to the case, especially to the fact that it is to be filed in the US. The company has just been heavily criticised for its record under apartheid in the report of South Africa's Truth and Reconciliation Commission, to which it gave evidence. "The question of whether reparations to individuals is an appropriate or effective way to assist in the rebuilding of South Africa is a matter to be resolved through South Africa's democratic processes, including, if necessary, its courts," the company said.
Anglo American argued that it has contributed, since 1994, to initiatives aiming to redress the effects of apartheid. It also claimed that the group was always against the racially divisive system. "During the apartheid era Anglo American undertook many actions in opposition to apartheid policies and in support of anti-apartheid campaigners. We firmly believe that our opposition helped bring about an end to the apartheid system," the company said.
Mr Ngcebetsha, speaking from Johannesburg, described such arguments as "laughable" and easily contested by the miners. "We are prepared for them [Anglo American]. If they want to embarrass themselves by arguing such things in court, so be it," Mr Ngcebetsha said.