print logo

Time for mining giants to share the spoils

 The Big Issue South Africa 05 October 2019

An abundance of gold, platinum, copper and diamond fields have brought more misery to Africa than wealth. (1688 Words) - By Munyaradzi Makoni

Big Issue South Africa

Mineworkers work deep underground at Harmony Gold Mine's Cooke shaft near Johannesburg (Photo courtesy of REUTERS/Mike Hutchings)

Many South Africans usually don't give too much credence to African National Congress (ANC) Youth League President Julius Malema's provocative calls to action, not least his call for the country's mines to be nationalised. But, considering the mining sector's failure to share the profits of their plunders in Africa, Juju might just be onto something this time, writes Munyaradzi Makoni.

An abundance of gold, platinum, copper and diamond fields have brought more misery to Africa than wealth. After decades of ploughing the earth for its riches, the mining companies' promises to transform poverty into prosperity have come to nothing. Instead, the reality consists of a privileged few lining their pockets, endemic corruption, abuse of human rights and a neglect of local communities and their environment.

So it's no surprise that ANC Youth League President Julius Malema's call to nationalise the mines and share the wealth among the people has been met with elation by many of South Africa's poor and working classes, and fear on the part of the custodians of a few in big business.

Malema is lobbying for the Minerals and Petroleum Resources Development Act to be amended to make it compulsory for mining companies to partner with the State to get a mining licence. The State would then get no less than a 60 percent stake in that mine and right of determination.

"All South Africans should equitably benefit from state-owned and controlled mines and we are not mistaken when we make the call for the nationalisation of mines ... What we are calling for is state ownership and control of both the mineral wealth beneath the soil, and the extraction and production of these mineral resources in mines thereof," he said when launching his nationalisation campaign last July.

The self-styled foot soldier for nationalisation upped the tempo this year by saying all investors who are "scared" of this process should not bother to consider investing in South Africa, adding that not only mines will be nationalised, but other industries as well.

"Our position is that banks are going to be nationalised [but] we want to start first with the mines," Malema told a media briefing in February.

More chance of pigs flying, says government

Mineral Resources Minister, Susan Shabangu, has been swift to reassure big business and potential investors that there are no plans afoot to nationalise the mines. "The policy of nationalisation doesn't exist in South Africa," she stressed.

African Rainbow Minerals chairman, Patrice Motsepe, called Malema's bluff by saying that, if the nationalisation of South Africa's mines was good for South Africa, then he was in favour of it.

And herein lies the rub. As William Gumede, political commentator, journalist and author of the award-winning biography Thabo Mbeki and the Battle for the Soul of the ANC, has pointed out: the real and immediate danger in nationalising a private company is that the South African government has a dismal track record when it comes to managing complex public organisations.

"Of all the state-owned organisations, arguably only the Industrial Development Corporation, Development Bank of Southern Africa and South African Revenue Service are being managed well," said Gumede.

Democratic Alliance leader, Helen Zille, echoed this and said she doubts there is anybody in the national cabinet that supports nationalisation of the mines.

"We have learnt from our state-owned organisations that nationalisation is not very efficient and the last thing we want is to waste another 10 years pouring resources into inefficient state-owned enterprises," she told SABC, another mismanaged state-owned institution in the red.

The sins of the mining companies

As early as last June Patrick Craven, spokes-person for the Congress of South African Trade Unions (COSATU), embraced the ANCYL's call to nationalise the mines, saying it was valid particularly in light of the global financial crisis and the massive job losses in the mining sector.

He is among a handful of the country's leaders, predominantly from the trade union sector, who have publicly supported Malema's nationalisation campaign. Perhaps with good reason considering the shameful record of private mining companies in South Africa and the rest of the continent.

Mining facts in Africa speak for themselves. Contracts with governments are often shrouded in secrecy and civil society and communities are often denied the opportunity to negotiate how the mining will take place.

That's not all. The taxes and revenue paid to government are not usually made public, and when social and economic assessments are done they tend to be marinated with half-truths.

In 2009 global NGO Action Aid produced a report entitled "Breaking the Curse", which examined how African governments have failed to optimise the mining tax revenue due to them prior to the 2003 to 2008 price boom.

The report claims that mining companies operating in Africa are granted too many tax subsidies and concessions which governments are reluctant to place under public and parliamentary scrutiny. There is also a high incidence of tax avoidance by mining companies, which are accustomed to secret mining contracts, corporate mergers and acquisitions.

The research conducted in Ghana, Zambia, Tanzania, Sierra Leone, Malawi, the Democratic Republic of Congo (DRC) and South Africa shows that in Ghana, South Africa and Tanzania lower royalty rates have cost or will cost treasuries up to R4,9-billion, R2,6-billion and R2,2-billion a year respectively.

In Malawi and Sierra Leone, tax breaks granted in mining contracts would cost treasuries up to R1,2-billion and R58,7-million a year, while in the DRC the tax exemptions in a single mining contract have cost the treasury R2,6-million a year.

Grassroots fury reaches boiling point

Despite the mines making enormous profits, local communities across Africa still struggle to make mine owners stick to their promises to plough back some of the profits into surrounding communities.

In post-Apartheid South Africa especially, the disappointment in the mining industry is tangible among poor communities.

Jerry Tshehlakgolo spearheads the Megoabading Crisis Committee and Dilokong Community Association's efforts to force the the mining company in their community in Dilokong, Polokwane to be more socially responsible.

He and his fellow activists share the scars of fighting mining conglomerates for a fair share of the profit. They claim to have been beaten, arrested and threatened, but giving up is not on the cards.

"When apartheid was defeated we thought our lives would change for the better. We thought we could enjoy a slice of the fortune mined from our community," says Tshehlakgolo. "The mines are still digging, not giving us enough attention as if we don't exist."

He pauses, searches for the appropriate words and goes on. "There were many of us in the committee who took up issues with the mine in our area, we were promised jobs, but only the chairperson was employed."

Tshehlakgolo recalls the day he was arrested with 14 other men after a demonstration in Dilokong, which entailed sitting at the gates of the mine, preventing the trucks from carrying the ore. He says they were later followed and picked up one-by-one by the police. "What was our crime - to tell them that our cemetery needs a facelift? To tell them that our houses without foundations are uninhabitable?"

Lesiba Maphoto, a community activist from Mokopane in the Limpopo Province, also blames the mining companies for much of his community's woes, and accuses them of making false promises to gain community buy-in.

"When they came they promised bursaries and better housing, all of which was abandoned as soon as the mining was in full swing," says Maphoto.

In Rustenburg, home to four big mines owned by mining giants Anglo, Impala and Xstrata, which have operated for over 40 years, activists say a scarcity of resources has led to a barrage of social ills plaguing the community.

"Unemployment and overcrowding with doubling figures of immigrants coming in search of jobs have spawned the spread of AIDS," claims Eric Mokuoa, a community leader, who adds that prostitution is the most common means of survival for women in the community.

"The pollution from the mines always finds its way into the soil, the water and environment, plaguing the health of the people in danger," charges Mokuoa.

He also claims that unprotected disused mines have become death traps, with at least three young children drowning in the abandoned mines in as many years.

Religious leaders join the fight

The struggles of these communities came to the fore at the Mining Indaba held at the Cape Town Convention Centre in February, where the community, church institutions and civil organisations were given a platform to air their grievances with the mining bosses.

Although this didn't stop the mining execs from cutting deals at the Indaba, it did give a voice to the disempowered and those fighting for their rights to be restored.

"What we have a problem with is when companies infringe on people's rights and their governments don't protect them," said Mandla Hadebe, the spokesperson for the Economic Justice Network (EJN), a network representing 11 national church councils from South Africa, Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Tanzania and Zimbabwe.

"It is unacceptable that our governments continue to turn a blind eye to the fate of our vulnerable communities, while protecting the interests of mining companies that contribute very little to the countries' economies because of corrupt deals and tax concessions," Reverend Malcolm Damon, executive director of the EJN told The Big Issue.

The former Anglican Archbishop of Cape Town, Njongonkulu Ndungane, who now heads the pan-African non-profit organisation, also weighed in on the debate. "Africa is poor because it is rich," he said.

Ndungane argued that human rights are being grossly undermined because of the greed of mining companies pushing to turn a profit in the 15-nation Southern African Development Community block, whose citizens are among the poorest in the world.

The bottom line remains that while lobby groups persevere in their fight to force mining bosses to share some of the spoils, many African governments are happily lining their pockets with revenue from the mining companies.

Considering all this, is Malema's call to share the abundant wealth of the country's mines that far off the mark? Only time will tell.


Please credit article as follows:

Originally published by The Big Issue South Africa. ©

SNS logo
  • Website Design