Production
South Africa’s role in overall mineral production has significantly dropped from the apartheid era to now. In 1962, South Africa produced 25.4 million ounces of gold, representing 70% of the gold market. In 1970, South Africa produced 68% of the world’s gold and received 1/3 to 1/2 of the gold’s profit globally. However, in 2001, only 10% of the world’s gold was produced in South Africa. South Africa has had a very prominent role in gold production since 40% of the gold ever produced has been from South Africa. However, their prominent role in the gold industry lessened around the end of the apartheid as gold production in 1994 and 1995 fell below 600 tons for the first time since the 1950’s. This drop is after production fell 10% from 1985 and 1986 to the late 1980’s. Mining contributes currently 20% of South Africa’s GDP with a total income of 600 billion rands per year. Nonetheless, mining is the second largest sector after trade and the growth of other industries has brought down the percentage of the GDP of the sector over the past decades. In 1957, minerals were responsible for 50% of total exports, with gold alone responsible for 40%. The exports of gold declined from 40% in 1952 to 1956 to 28% in 1959 to 1960 to 24% by 1960 to 1961. Gold currently has 11% of exports however mining in general still has 40% of the exports of South Africa.
“I reckon we are doomed if we don't embrace new mining techniques"
-Nico Muller, executive vice-president for SA at Gold Fields.
Labor
Labor conditions in the mines have been difficult, both during the apartheid era and during the post-apartheid era since the system has not changed. The migrant labor system is central to the mining industry, even 20 years after the end of apartheid. During the apartheid, miners came from all over the country and were forced to live in single-sex hostels 6-12 months a year. This separation led to second families and the spread of HIV as well as difficulties supporting more dependents. Now, miners are given the option of a living allowance if they choose to live off the mine, however this led to even worse living conditions because this “living out allowance”, of around 1800 rands, approximately 1/3 of their total salary, approximately $128, encourages people to take advantage of it but this led to horrid living conditions where tens of thousands of miners lived with shared toilets and taps. Since the miners can only visit their families twice a year, some start second families around the mines which causes a heavier burden on their salaries, and this causes the average miner to support 10 people. The forced staying of miners around the mine but without their families disrupted the natural flow of a small town springing up around a mine with the miner’s families. This town then grows until the mine has been depleted, then the town either moves or becomes dependent on another industry. These difficult conditions were often caused by the lack of competition the South African mining industry. For example, by 2001, South Africa had produced 51% of the world’s platinum ever mined. They have an estimated 85% of the world’s platinum supply. However, even with this large supply, the profits are not as high as in other countries. For example, since the price of gold is around $1195 per ounce and it costs on average $958 to produce an ounce of gold in South Africa, the resulting profit per ounce is only $237. On the other hand, in North America, the average cost to produce an ounce of gold is $665, yielding a profit of $530 per ounce. Therefore, South Africa only receives 44% of the profits per ounce that North America receives. As a result, in order to have equal profits, South African mines need to produce over two times more gold than North America.
“It’s very sad when every time the mine workers are demanding a living wage, we have to be reminded of commodity prices not doing well in global markets"
-Livhuwani Mammburu, spokesman for the Nation Union of Mineworkers
Mining Then and Now
Race
Mining is now considered the largest contributor to black economic empowerment. Black ownership of the mining sector is at 8.9%. The goal was set at 15% by 2004 as part of the B-BBEE, the Broad-Based Black Economic Empowerment, branch of the government policies. The next goal was to reach 26% by 2014. However, these goals are not being achieved. During the apartheid, there were white migrant workers as well as black migrant workers, however the white migrant workers were able to settle around the mines to spring up mining towns however the black miners were not allowed to settle for several reasons. These reasons included that their wages were too low, the miners were forced to live in compounds, and the pass laws forbid them from settling in the white areas. By regulating the flow of people to prevent a black class growing around the mines, the companies’ goal was to employ black workers without families because then the wages only needed to support one person. In 1971, average annual salary for a white worker in the mines was $5,678 while the average annual wage for a black worker was $270. White miners were earning 21 times as much as the black miners. By 1978, whites were earning less than 8 times as much and by 1980, the figure was down to 6.6 times. The real cash difference between the annual wage of whites and blacks widened from $11,000 in 1978 to $14,000 in 1980. In 2005, the average annual wage for black miners was 33,600 rands, or $2381. The average annual wage for white miners was 114,000 rands, or $8078. This creates a $5697 real difference in the annual mages and a multiplicative difference of 3.4 times. Although this is reduced, the rate is still incredibly high. The rand has recently dropped in value rapidly so the difference in the dollar and rand of 2005 would be $18,717.77.
-Mitchell Jubeir
-Mitchell Jubeir