South Africa gold industry says government has $275 mln for silicosis compensation

CAPE TOWN, Feb 8 (Reuters) - South Africa's gold industry, which faces a class action suit from miners who contracted the fatal lung disease silicosis, said on Wednesday the government had 3.7 billion rand ($275 million) in a fund available for compensation to sufferers.

"There is a compensation fund that has about 3.7 billion rand in it," said Graham Briggs, a former mining executive who chairs an industry working group on occupational lung diseases.

He said that amount should be enough to compensate all the silicosis sufferers who used to work in mines. But Briggs told journalists at a mining conference that no compensation had been paid out yet from the fund for reasons which remain unclear.

Briggs said the fund was with the department of health and was the product of contributions paid over the years by mining companies, which put in around 8 rand for each shift a miner worked. Officials at the department of health were not immediately available for comment.

Silicosis is an incurable disease caused by inhaling silica dust from gold-bearing rocks. It causes shortness of breath, a persistent cough and chest pains, and also makes people highly susceptible to tuberculosis.

Many of those affected are migrant labourers from neighbouring countries such as Lesotho.

A court last May ruled that class action suits for up to half a million miners who contracted the disease could go ahead. Companies have since said they would appeal that decision, setting the stage for protracted legal wrangling.

Briggs, a former chief executive of Harmony Gold, said the industry was "getting closer to a solution" and hoped an out-of-court settlement could be reached with the claimants this year.

The working group on occupational lung diseases was formed by Africa's top gold producer AngloGold Ashanti (Xetra: AOD.DE - news) , Gold Fields, Harmony, Sibanye Gold and African Rainbow Minerals, as well as Anglo American (LSE: AAL.L - news) which used to mine gold.

($1 = 13.3925 rand) (Reporting by Ed Stoddard; Editing by Adrian Croft)