The case of illegal Mining in South Africa Essay
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TheBenoniCase.docx
The Case of Illegal Mining in South Africa
The Benoni Mine Incident
A rescue operation was undertaken on February 15, 2014 at an abandoned mine shaft in Benoni (near Johannesburg), South Africa in an attempt to rescue a reported group of up to 200 illegal mine workers. At first it was believed that the hundreds of illegal miners had been trapped as a result of a rockslide. Later after emergency workers pulled several miners out, it was revealed that a rival group of (illegal) mineworkers allegedly had used large rocks and a concrete slab to seal off the shaft, leaving the miners for dead, and taking their gold.
This rescue effort captured news headlines for a few days but the story soon faded, particularly after it was suspected that there were far fewer than 200 mineworkers trapped, but the reality was that no one really knew how many workers had even entered the mine. After several days of rescue efforts, emergency workers estimated that only 30 miners were involved in the incident at Benoni, yet the rescue had been hampered by the very people they were trying to save. [It should be noted that the emergency workers used in the Benoni illegal mining incident were not public employees; these were emergency personnel employed by private firms. Their services were required because the insurance policies of the South African police purportedly do not cover them below ground. Others argue that these are unfounded claims, and that the South African police refused to enter the mine due to safety concerns.] After the first dozen miners were rescued, word got back to those remaining below that after surfacing, the miners had undergone a medical examination, had been cleared, then promptly arrested and taken into custody by the local police. The remaining miners resisted coming to the surface, requesting reassurances instead, from the authorities that they would not be arrested. Eventually, a total of 30 miners were coaxed into coming out, some surfaced seeking relief from their ordeal, and others yet, exited because they feared that the authorities would soon deliver on their promise to “seal” the mine in a matter of days. Rumors that 200 miners might still be trapped in a deeper part of the mine were discounted, with authorities stating that they were uncertain if there was any truth to the claim that more remained in a different compartment beneath the ground.
In the end, the 30 miners were arrested because they had been involved in criminal activity: illegal mining. At a minimum, this crime involves trespassing, theft and in many instances illegal entry into the country. Increasingly it involves organized crime syndicates that are often linked to the murder of members of rival [illegal mining] groups. Oversight for illegal mining cases is the responsibility of the South African Police’s (SAP) Organized Crime Unit and if the miners are expatriates – as is largely suspected in the Benoni case - then the South African Department of Home Affairs also gets involved as deportation for the miners is sought. While this is but one example of illegal mining activity in South Africa, the practice has reached staggering proportions. The South African government now estimates that there are more than 14,000 individuals involved in illegal mining, with much of it being the work of the organized crime syndicates mentioned above. The illegal mining industry is now estimated to be valued at $570 million per year (or 6 billion SA rand), according to South Africa’s former Mineral Resources Minister, Susan Shabangu 1).
Mining and South Africa’s Economic History
Mining is an industry that is closely linked to South Africa’s history and economic development. In fact, South Africa’s very first commercial mining company was established as early as 1846 to exploit the newly discovered copper reserves in an area near Cape Town. Not long thereafter, the discovery of diamonds and gold in the late 1800s (near Johannesburg) created a “gold rush” that resulted in an influx of foreigners who arrived in South Africa in search of new found riches. South Africa would forever be transformed. New immigrants arrived from all over Africa, Europe, Australia and New Zealand in search of gold. Temporary housing (tents) for the new arrivals became permanent housing and towns sprouted up where none had existed just a short time before. The discovery of diamonds and gold and the annexation of lands that contained these rich deposits by the British led to the Boer Wars of the late 1800s.
The mining industry continued to thrive throughout the 1900s, fueling the country’s economic growth. Revenue from gold exports was a source of capital used to purchase machinery and oil, needed to support the country’s expanding manufacturing base. During much of the 20th Century, mining techniques improved. Advances were made in poisonous gas detection methods, more efficient mining methods – including even some chemical extraction methods of minerals from low-grade ore, and better ventilation systems. Gold mining peaked in 1970 when South Africa accounted for 68% of global production 2). Since then, South Africa’s share of global gold production has declined precipitously. In 2012 South Africa accounted for only 6% of global gold production. It was the country’s worst year in gold production since 1905, according to Gold Investing News. South Africa currently ranks as the 5th largest gold producer in the world, and has been overtaken by China, Australia, the United States, and Russia (ranked 1-4, respectively in global gold production) 3). As a result of the increased global competition, South Africa has had to close older, marginal and less profitable mines. When several gold mines closed in the 1990s, thousands of mine workers lost their jobs. Some of the mines still in operation are deeper and more challenging to access, and likely less profitable. The economic factors pose a serious threat to the workers, but there is another threat that has resulted from South Africa’s declining world position in gold production: a significant increase in the number of abandoned mine shafts. South Africa’s Council for Geoscience estimates that there are some 4,400 abandoned mines in the country, almost four times the number of operational mines!
Despite the decline in gold, mining continues to be a vital sector of South Africa’s economy. Today, South Africa is the world’s largest producer of chrome, manganese, platinum, vanadium and other minerals, and the world’s second largest producer of ilmenite, palladium, rutile and zirconium 4). In addition, it contains significant reserves of iron ore, chromium, copper, uranium, silver, beryllium, and titanium 5). In 2013, the nation’s GDP totaled $350.6 billion, and mining accounted for $17.5 billion, or 5% of GDP 6). Other estimates that consider the direct and indirect impacts of the mining sector on the nation’s GDP state that mining gives rise to a “real” contribution to South Africa’s GDP of between 15-20% 7). An estimated 500,000 workers are directly employed in the South African mining sector, while other estimates that take into account the positive economic ripple effects created from direct and indirect employment in the sector attribute 1,365,000+ employments to mining. Given the scale and scope of South Africa’s mineral resources, mining will likely continue to be an integral part of the nation’s economic, social and political landscape.
The Government’s Position on Illegal Mining
Laws in South Africa prohibit any one without a license to mine or process gold. However, local authorities lack the manpower needed to properly monitor the thousands of abandoned mine shafts. The South African government is concerned that the large number of “freelance” miners, coupled with a decline in some sectors (e.g. gold) is having a significant negative impact on tax revenues. South Africa’s Chamber of Mines, an industry association, estimates that South Africa loses about 5% of its potential annual mineral production to illegal mining. This lost production is valued at around $2 billion. The government estimated that in 2010, it had lost approximately $500 million in tax revenues and [lost] export revenue due to illegal mining 8). These lost funds could have been used to support much-needed social service programs for the country’s poor and unemployed.
The Realities of Legal Mining
It is human labor that must be used to mine natural resources, as there are few machines that can do the work required to extract the minerals. There are inherent risks in mining: potential rock slides, poisonous gases, etc. But not only is the breadth of South Africa’s deposits unique, so too is its geology. The geothermal gradient (i.e. the rate at which temperature goes up with depth) is lower in South Africa than elsewhere (50°F/km versus 77°F/km), thus permitting mine depths not seen anywhere else in the world. This results in potentially more difficult and challenging work conditions, as the deeper the mine, the narrower they become. Other potential mining hazards include the presence of silica dust. The dust is a by-product of the drilling in the mines, but if not wet down properly and frequently with water, it enters the miners’ lungs and can lead to silicosis, a lethal disease. Proper mine ventilation is also needed for controlling silica dust. In addition, temperature controls are needed to maintain comfortable work conditions. When geothermal gradients are high, the intake air must be cooled to maintain tolerable working conditions. Underground air refrigeration is energy-intensive, and this can pose a significant challenge in a country that until recently consumed more energy than it had the capacity to produce. The South African government is requiring mining companies to adopt better working conditions; and mining unions continue to demand improvements in unsafe working conditions, particularly after a highly publicized incident in 2007 in which 3200 workers were trapped in a mine – fortunately, no deaths resulted in that event. In sum, it can be said that if legal mining poses significant risks to miners and if working conditions are simply “tolerable”, then these pale in comparison to the risks and working conditions that illegal miners face.
Illegal Mining
Who are the illegal miners in South Africa? They are often illegal immigrants, largely from Zimbabwe, Mozambique, Lesotho or other central and southern African nations that come to South Africa in search of striking it rich, or at the very least, making a decent living. In South Africa, the illegal miners are often referred to as the Zama Zamas, a term that means “trying your luck”. These immigrants come to South Africa to earn a living with the hopes of remitting earnings back to their families in their respective homelands.
Some illegal miners are South Africans who view illegal mining as a dangerous, albeit potentially remunerative activity. Some of the South African illegal miners can be described as “legal miners by day, yet illegal by night.” In other words, they might be gainfully employed by a mining firm and work legitimately for the company during the day shift, but re-enter the mine when evening falls to bolster their income. These individuals are particularly useful to a group of illegal miners given their familiarity with the mine and its risks. It is also quite possible that the South African illegal miners are unemployed mineworkers that were previously laid off by the mining companies when they were forced to retrench as a result of increasing global competitive pressures. Alternatively, illegal mineworkers may simply be young, black South Africans (without any previous mining experience) seeking a living in a nation that has struggled to reach its potential in the post-apartheid era and where one out of four South Africans is unemployed.
Regardless of the nationality or the motivations that landed the illegal miners in this role, one thing is certain: it is not an easy life. Illegal miners may break into the very mines they work in by day, or often work in abandoned or disused mine shafts. (Disused mine shafts are mines that legitimate mining companies are in the process of closing down because they are no longer economically viable, but where the firms are awaiting final permits issued by the government to “officially” close the mine. Mining companies complain that all too frequently, the government-issued permit is delayed for months, thus exacerbating the illegal mining problem.)
The miners often align themselves with a group of miners united in their illegal search of striking it rich. There is power in numbers. Being part of a group offers protection from rival factions of illegal mine workers, and fosters some level of camaraderie as the freelance miners ‘watch over’ one another. Since illegal miners are typically not employees of any business, nor members of any union and often times, not even citizens of South Africa, it can be said, that if it wasn’t for these informal groups, the miners would have no one else with even an ounce of their interests in mind. The groups generally work for a leader (a “kingpin”) who organizes runners to bring food and drinks to them, while the “miners” stay underground, some times for days – and even months - at a time. Illegal miners often run the risk of falling prey to other serious crimes. Illegal miners’ lives have been threatened - and lost - when they have refused to relinquish the deftly collected gold particles in their possession to thieves. Deaths, however, often go unreported, and as a result, there is no way of knowing how many illegal miners lose their lives each year. Only when there is a more visible event – such as a fire that went out of control in an abandoned mineshaft in 2009, killing 76 people, is a light shed on the plight and the working conditions of these workers.
Mining Companies
Mining companies in South Africa today face a myriad of global and local pressures. On a global level, there is slow global economic recovery, stagnant or falling commodity prices, and growing nationalism over a nation’s extractive resources. Locally, the companies face an uncertain regulatory environment, rising demands by government, potential labor unrest and shrinking margins 9). When issues related to illegal mining are superimposed on these constraints, the challenges to the South African mining companies become even more complex.
South African mining companies are permitted to mine legally only after they apply for and pay the government for a mining license. The cost of the application is not a set fee, but rather is determined by the government’s Department of Mineral Resources on a case by case basis. Mining is not permitted unless licenses are obtained. The government relies on these license applications as a source of revenue, but increasingly, it is viewing these as opportunities to link huge infrastructural developments to mining license issuance, posing an additional economic risk to mining companies.
According to South African law, the closing of old mines is the sole responsibility of the mining company. The companies are supposed to keep monitoring the closed mine until a closure certificate is issued by the government, yet because this is often subject to delays, illegal mining can take place while the closure is being evaluated. Companies are often frustrated as maintenance costs sky rocket, while the government takes its time in issuing official closure certificates. Mines become increasingly more dangerous to enter because of rock falls and possible poisonous gasses.
Not only are the companies responsible for closing mines, but they also find it difficult to monitor all unused shafts. In some cases, illegal miners dig new – even less stable - shafts that run parallel to existing ones. (This was the case in the Benoni mine shaft.) There is increasing friction between the mining companies and the workers, leading to lengthy, crippling and costly strikes. An additional risk to the companies is posed by the inflammatory rhetoric between politicians and mining companies that has been on the rise. The companies are perceived by mining unions and the government to have “deep pockets” which makes them prime candidates for additional “corrective actions” (such as the linking of licenses to infrastructural projects).
The Mining Unions
The major mining companies are responsible for employing the workers, generating profits and maintaining the mines. When the mines are operational, and in “working condition” or legally open for mining, the National Union of Mineworkers (also known as NUM) organizes all the legally hired mineworkers. NUM has been known to state that low level illegal miners are paying the price for the negative effects of illegal mining while the syndicates are making millions. (The kingpins are becoming richer at the expense of the individual, defenseless illegal miners, prompting parallels between this illegal activity and the economics of the illegal drug trade in the U.S.). In a rarely issued statement on the subject of illegal mining on February 21, 2014, NUM stated that “any business and government that is serious about its people must take urgent steps to tackle this (illegal mining).” The union urges all companies to put more effort and seriousness to close and tighten deserted mines. Illegal mining is not only a manifestation of negligence by mining companies, it is also a challenge to the security of the state and must be responded to accordingly. With the exception of this statement, the NUM has largely ignored the plight of the illegal mine workers. They are, after all, not dues-paying members of the union, and as a result, are not the union’s primary concern.
Local Authorities
The authorities are responsible for the deployment of police to control the violence and theft that often go hand in hand with many illegal mining activities. The security police whose charge it is to patrol and monitor these mine shafts, often find they are out-matched by heavily armed groups of illegal mineworkers.
Recent Government Responses to Illegal Mining
In 2012, the then Mineral Resources Minister, Susan Shabangu established a Gauteng (formerly the Transvaal Province of South Africa) Illegal Mining Stakeholders Forum to strengthen efforts to deal with illegal mining in the province where illegal mining is concentrated. The stakeholders include the Department of Mineral Resources, the South African police, the National Prosecuting Attorney, the mining companies, the local governments and organized labor. This forum ultimately reports to the Directorate for Priority Crimes and Investigations (known as the “Hawks”).
The minister called for more “sustainable methods” to insure the closure of open holes, shafts and underground tunnels to prevent illegal miners from reopening previously sealed access points. During a recent period, she indicated her department had closed 130 holes and shafts, and the mining companies had closed an additional 50. She then went on to stress the need for tougher charges and sentences against illegal miners.
Illegal mining is a risky activity which the government, the police and mining companies in South Africa have all historically attempted to prevent. It poses a threat to those directly involved, but can also indirectly affect a broader community, and ultimately an entire nation.
Works Cited
1) http://www.bloomberg.com/news/print/2014_04_23/deadly- illegal-minig-booms-below-south-africa-s-city-of-gold.html
2) http://www.projectsiq.co.za/mining-in-south-africa.htm
3) http://goldinvestingnews.com/36495/2012-top-gold-producing-countries.html
4) http://www.projectsiq.co.za/mining-in-south-africa.htm
5) http://www.britannica.com/EBchecked/topic/555568/South-Africa/44033/Resources-and-power
6) http://www.mediaclub southafrica.com/economy/37-economy/economy-bg/111-sa-economy-key-sectors
7) http://www.sammri.com /?page_ id=33
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