SAFTU statement on new Mining Charter, BEE and nationalization

21 June 2017

The hostile and hysterical reaction of the Chamber of Mines to the new Mining Charter’s slight increases in the required levels of Black Economic Empowerment in the industry highlights everything that is wrong with the capitalist mining sector. 

Mining bosses’ history of exploitation

For 150 years this industry has dominated the South African economy. Its colonial, capitalist owners have ruthlessly plundered our natural resources and shipped them overseas to make quick profits rather than beneficiating them to build local manufacturing industries. This has led to deindustrialisation, high unemployment, deepening poverty and widening inequality which has devastated the South African economy. 

They have ruthlessly exploited vulnerable migrant workers in dangerous and unhealthy mines. Thousands have died in accidents and hundreds of thousands from diseases contracted in their work. They have paid poverty wages and herded workers into barbaric single-sex hostels, away from their families for years on end.

Yet today nothing fundamental has changed in an industry which has brought such vast wealth to its owners and such misery to its workers and mining communities. Since 1994 the ANC government has done next to nothing to implement its promises to transform the industry or reduce the domination of white, multinational monopolies whose wealth and power has remained largely unchanged.

That is why historic call for the nationalisation of the mines, enshrined in the Freedom Charter’s  promise that “The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole” is more more necessary and urgent than ever. This is why the South African Federation Trade Unions (SAFTU) is more determined than ever to take up the campaign for the nationalisation of the industry.

Black Economic Empowerment (BEE)

The mining monopolies, which have done virtually nothing to implement BEE, are now threatening to go to court to challenge the new Mining Charter, which seeks to enforce the most minimal advances in BEE. Even worse, they are threatening to withdraw even more millions of rands of investment into the industry if the Charter is not withdrawn.

“The charter could kill the goose that lays the golden egg”, said Chamber of Mines president Mxolisi Mgojo. They are in effect trying to hold the country to ransom so that they can continue to defy the call for BEE and amass their super profits!

Yet the new charter’s requirements demand no more than that mining companies raise black ownership levels to 30% within a year, up from 26%. It also introduces ownership ‘apportions’. Companies must divide the 30% between black entrepreneurs, who will take 14%, employees who will get a derisory 8%, and communities an insulting 8%. Companies which already have 30% black ownership will be exempt from this ‘apportioning’.

Just how far this is from full BEE is seen from the demographic statistics in the 2011 census figures showed that the population of South Africa consists of Africans 76.4%, Whites 9.1%, Coloureds 8.9%, Asian 2.5%, and Other/Unspecified 0.5%. 

Yet the Chamber of Mines is threatening to sabotage the entire industry to prevent minor changes which would still leave the industry’s racial demographics nowhere close to those of the country as a whole.

While many pro-business commentators and academics keep preaching the need for “inclusive growth” the message has obviously not reached the mine moguls who are desperately trying to exclude the country’s majority population. They are confirming in practice that there really are white monopoly capitalists who want to stop even the most minimal steps to transform their industry. 

The 30% rule in the new Charter, like the government’s narrow BEE policy will still leave us with an “Irish coffee” industry, with the black workers at the bottom, below a white layer of executives and shareholders and just a sprinkling of BEE chocolate on top.

Mining industry in crisis

The Chamber of Mines’ arguments might seem less blatantly self-interested if the industry was booming, creating jobs and improving the lives of people near the mines. But the reality is the very opposite - there is no “golden egg”; the sector is in deep crisis. 

The industry has shed 75 000 jobs in the last five years. Just last week Sibanye Gold dismissed over 1,500 miners at its Cooke operations for participating in an unprotected strike. The NUM claim 2,000 workers were dismissed. Many more jobs are likely to go as the worldwide slump in demand for minerals and the shift away from carbon-based fuel continues.

Around 6000 abandoned mines litter abandoned ghost towns, causing massive health and safety risks for the communities and environmental hazards for the whole country.

Anglo America, one the biggest player in the sector has even been been down-graded to junk status by the Moody’s credit ratings agency!

Mine-workers are still paid so little that thousands fall into debt and are ruthlessly exploited by ‘mashonisas’. Houses they were promised by the mine companies have not materialized. 

John Capel, managing director at the Bench Marks Foundation, says that platinum mining companies with operations in Rustenburg had missed a window of opportunity to improve the lives of mineworkers and surrounding communities. “There are a lot of promises on paper, but nothing has been done,” he said. Lonmin had built less than 500 houses out of 5 500 which it had promised to build by 2011 in its social and labour plan.

Marius Oosthuizen, lecturer at The Gordon Institute of Business Science, summed up the plight of South Africa’s mining communities - as “the embodiment of everything that is wrong with South Africa… their daily social struggle is a microcosm of the social injustice that marks our unequal society”.

And it is not just the workers directly employed by the mining companies who face a grim future. Christopher Rutledge of ActionAid, writing in GroundUp, quoted Meshack Mbangula, National Coordinator for Mining Affected Communities United in Action (MACUA): “Communities are angry, are ready to explode and government ignores communities at the cost of greater social conflict."

The Bench Marks Foundation has noted that “The Department of Mineral Resources is guilty of misleading the public in claiming it has consulted communities...The arrogance and high-handedness of the way the department treats its own constituency is mind-blowing… More decision-making in the mining industry by all mining-impacted communities is needed, and a genuinely equitable distribution of wealth with them.”

“Apportionments”

The Charter will apportion communities and mine employees with their insulting 8% shareholdings, but they will have pay for these shares and there is no clarity as to who will represent these important constituencies. The danger is that shares will be awarded behind the scenes to sweetheart unions or corrupt local chiefs.

Rutledge quotes Matthews Hlabane, a MACUA leader from Mpumalanga, who refutes the “rhetorical claims” that mining-affected communities are stakeholders: “They are a stakeholder without a stake, they are not stakeholders, they are victims.”

There is a similar concern with the “workers” 8%. One of the very few organizations that has welcomed this Mining Charter is the National Union of Mineworkers, who “would like to also put on record the fact that we have held six or more formal consultations with the Department of Mineral Resources since the April 2016 gazetting of the draft mining charter, we're both parties that reflected and exchanged various ideas and proposals on a transformed mining industry.”

Thus they are not only in support of this incredibly weak attempt to advance black economic empowerment but were fully involved in drawing it up. Was the NUM involved in the expectation that they alone will become the workers’ “shareholders”?

The worst development of all in the mining industry is the explosion of  so-called “illegal” mining by desperate people from far and wide - the zama-zamas - who are prepared to risk their lives by going down dangerous, disused shafts to dig out a few grains of gold. 

When they resurface, if they are lucky they will make a few rands from dealers who get rich by exploiting them or if unlucky will get arrested for trespassing on mining companies’ property and sent to jail. The death of at least 40 of these mineworkers in Welkom was one of the biggest humanitarian disasters of recent times, yet was given little attention in the media or by the government or mine owners.

As more and more “legal” miners are retrenched, the number of illegals will rise unless their status is legitimized and they can work in safe and healthy conditions. 

The zama-zamas must be decriminalized and involved with local communities in publicly owned co-operative mines as part of a nationalised industry

Nationalisation

This all makes an unanswerable case for SAFTU’s demand for nationalisation of the mining industry, to take ownership out of the hands of the white monopoly capitalists who have wreaked such damage on workers, communities and the economy.

Unfortunately however the concept of white monopoly capitalism (WMC) has recently been hijacked by elements in government and the ANC who demagogically to try to use attacks on WMC and for economic transformation as a distraction from their involvement in corruption and tender manipulation.

They pretend to be fighting a powerful ruling class when in reality they have done absolutely nothing in 23 years to even trim the power and wealth of white monopolies but on the contrary have consolidated it through their neoliberal economic policies like GEAR and the NDP. 

Their demagogy has led to a suspicion that ANC leaders’ empty rhetoric about WMC is just a cover for their intention to increase opportunities for more looting by mining companies claiming to be BEE. This is especially worrying since the Mineral Resources Minister Mosebenzi Zwane, who is introducing the Charter, is himself one of those named in the Gupta emails. 

This misappropriating of historic demands of the liberation movement by Gupta-linked elements in government can create the perception that these people are not interested in real transformation and democratization of industries but seeking to turn the mining industry into another Eskom, Prasa or Denel - a source of wealth for the comprador crony capitalists who have been plundering existing public enterprises.

There is nothing more dangerous than the perception - which the Chamber of Mines will try to use - that nationalisation of the mines is only being advocated by those who want to create new areas for looting, just as we have seen in other state-owned enterprises - so that they can discredit the legitimate case for  nationalisation that SAFTU is making. 

That makes it essential and urgent for SAFTU to popularize, and mobilize for, the demand for a new form of nationalisation in which industries are democratically controlled from the bottom-up by representatives of workers and communities, to whom top officials are fully accountable for implementing mandates.

This is the only answer to the crisis which has arisen from this new Mining Charter’s minimal advances towards BEE, the hysterical threats of the mining houses and the threat of an investment strike by multinational monopolies, which have powerfully strengthened SAFTU’s argument for nationalization of the mines, as part of a democratically planned economy which beneficiates rather than exports our mineral wealth so that it can be used in the interests of all South Africans.

Issued by Patrick Craven, SAFTU Acting Spokesperson, 21 June 2017