A storm erupted in policy circles in South Africa after Julius
Malema the leader of the African National Congress Youth League (ANCYL)
boldly proclaimed the need for the mining industry in South Africa to
be nationalized. The demand was predicated on fulfilling the vision of
the Freedom Charter, which was adopted at Kliptown in 1955 as the
‘manifesto’ of the liberation struggle. According to the Charter “The
wealth of the country shall be shared among all who live in it!” (Note:
the full ANC YL document on nationalisation of the mines can be read here in a PDF version)
Not surprisingly Malema has faced a barrage of criticism from free
marketers and other apologists of capitalism. What was surprising,
however, were the attacks he had to face from Ben Turok and Jeremy
Cronin, leading figures of the Communist Party. Both Turok and Cronin
quickly claimed that the notorious Minerals and Petroleum Resources
Development Act [28 of 2002] (MPRDA) brought mineral rights under state
control, therefore it is not necessary to nationalize mines, as this
piece of legislation means that all South Africans through state
ownership of the mineral rights already share in the wealth of the
mining industry.
The attack on Malema from the leading SACP cadres was so vicious and
unexpected that Malema responded by promising that he will defend the
ANC against communist takeover with his life, reflecting his and the
ANCYLs ideological confusion. However, it is important to note that
Malema felt it necessary to pose such a radical demand as mine
nationalization, possibly due to pressure from the ANCYL ranks. This
also shows that the YCL, basing itself on radical socialist demands,
can gain a wide layer of support amongst youth in the alliance
organisations. Malema has taken it a step further by demanding the
progressive nationalisation of the entire commanding heights of the
economy, starting with mining and then moving on to banking. Malema
reiterated his demands on the eve of the Mining Indaba in Cape Town.
This is an annual event for mining capitalists planning their scramble
for African minerals. Susan Shabangu the Minister of Mineral Resources
publicly backtracked on Polokwane Resolutions by stating that
nationalisation is not ANC policy, and that the nationalisation “will
not happen in her lifetime!”
Not surprisingly the Chairperson of De Beers, Nicky Oppenheimer
jumped to the defence of Susan Shabangu. Julius Malema’s response to
the head of the capitalist family which has dominated the mining
industry for close to a hundred years, manipulated colonial, apartheid
and post apartheid governments in the interest of private profit, shows
a high level of class consciousness permeating the ANCYL and its
leadership. Malema is reported to have said, “Who is Nicky Oppenheimer?
We don’t respect him. He has never been a leader of our people. Ours is
to take from his family what belongs to the people of this country.”
The leader of the Youth League demonstrated that his level of
revolutionary consciousnesss is light years ahead of that of the
leadership of the SACP through comments directed at Susan Shabangu.
“Her pronouncements show that she has committed her own life to
capital; capital continues to take care of her. What she is saying is
that in her lifetime our economy will never be decolonised. She leads
the most untransformed sector in our economy and should know better.”
He accused the mining minister of “sucking up to monopoly capital”
(Mail and Guardian, Feb 5-11, 2010.p.10).
The ANC Youth league and its young supporters are running miles
ahead of the leadership of the South African Communist Party, and even
COSATU. The SACP slogan of “build socialism now”, is meaningless
without a detailed programme and strategy for doing exactly that.
Malema and the ANCYL are putting forward the content of what the
building of socialism actually requires, and it certainly does not
require a deepening of capitalism. Especially now that global
capitalism stands exposed and naked in its bankruptcy. Jeremy Cronin’s
defence of the MPRDA ignores the fact that the minerals mined are
privately owned and disposed off by multinational mining companies, and
that the value of the minerals are realized in London, New York, Tokyo,
and Toronto where these companies are listed or based. While South
Africa sits with the enormous costs of mining, the profits of mining is
realized in the First World. The costs include costs to communities
surrounding mines, including being pushed off their land; of the
destruction of their traditional economies and culture, the destruction
of their natural environment, the consumption and pollution of their
water sources and the destruction of their health.
The parliamentary offices of Turok and Cronin are situated in the
fairest Cape a thousand miles south of the misery and destruction
wrought by the mining industry on the land of rural peasants, well
removed from the scourge of HIV/Aids associated with mining. HIV/Aids
infection levels in mining towns are double the national rates. Mine
workers reside in “informal settlements” or squatter camps similar to
the one depicted in the Sci-Fi movie District Nine. The tragedy is that
the real life aliens are migrant workers from Mozambique, Malawi,
Zimbabwe, Lesotho, Swaziland and the Eastern Cape.
The Mining Industry in Southern Africa
Surface workers on South African mines earn roughly R1 500 (US$200)
per month, while underground workers earn R3 000 (US$400) per month,
figures which have not changed much since 2005 (Hlekiso & Mahlo,
2006). In 2005 the average wage of a Canadian mine worker was US$ 2607
per month (Worldsalaries.org). Canadian mine workers therefore earned
6.5 times more in 2005 than South African mine workers in 2009. Gold is
currently trading at around US$ 1200 (SAR 9 000) an ounce, which
translates into US$ 38,400,000 per ton, while platinum is trading at
US$ 1450 (SAR10 875) an ounce, which translates into US$ 46,400,000 per
ton for platinum.
South Africa, like most of the other countries in the SADC region is
highly dependent on minerals. Since the late 19th century, South
Africa’s economy has been based on the production and export of
minerals, which, in turn, have contributed significantly to the
country’s skewed industrial development. Most industries that developed
are interlinked with the supply side of the mining industry, with
little diversification away from mining. In 1952 the Trade Union
organiser and champion of the working class Solly Sachs noted that, “It
is abundantly clear to anyone who has the welfare of South Africa at
heart that the future of the people and the whole country depends on
extensive and intensive industrial development, and that the mining of
precious minerals can serve the interests of the country only as a
stimulus for the development of other branches of the national
economy.“ Yet he concludes that “It has always been the policy of the
Chamber of Mines to subordinate the entire economic life of the country
to the selfish interests of the mine owners” (Sachs, 1952, pp. 102-103).
In 2000, mineral commodities accounted for 47% of the $30.8 billion
in total exports. Gold, diamonds, platinum, and other metals and
minerals were the top export commodities in 2002. The total value of
sales of primary minerals was $14.2 billion in 2000 ($12.3 billion in
1999); $11 billion worth was exported ($9.5 billion in 1999). Processed
mineral materials added another $2.98 billion to sales in 1999 and
$2.43 billion to exports. The leading export earners in 2000 were PGMs
[platinum group metals] ($3.9 billion), gold ($3.4 billion), coal,
ferroalloys, aluminum, iron ore, vanadium, and copper. The year 2000
was the first in which the value of PGM exports exceeded that of gold.
The recent sharp increase in PGMs has helped compensate for the
declining role of gold (Encyclopedia of the Nations). Given these
staggering export figures one is left with the uncomfortable question
as to why in such a wealthy country have the issues of unemployment,
poverty, disease, homelessness and crime assumed such equally
staggering proportions?
A number of myths have emerged about the South African economy, much
of these stem from the ideological desire by the ruling class,
particularly during the Mbeki terms in the presidency, to perpetuate
neo-liberalism, to reverse the gains by the working class and to
commodify even the most basic services such as health, education,
electricity supply, water, transport and housing. Thus Wikipedia
repeats some of these myths “South Africa has a two tiered economy; one
rivalling other developed countries and the other with only the most
basic infrastructure. It is therefore a productive and industrialised
economy that exhibits many characteristics associated with developing
countries, including a division of labour between formal and informal
sectors and an uneven distribution of wealth and income. The primary
sector, based on manufacturing, services, mining, and agriculture, is
well developed” (Wikipedia, -) A well developed primary sector is
surely indicative of an extractive economy which is typically Third
World, Extractive economies depend on abundant supplies of cheap
labour, hence the country has a large pool of unemployed lumpen
proletarians, who are absorbed into the informal sector, which sector
acts as a safety valve against revolution. The two Southern African
countries, lauded for being democratic, capital friendly and
responsible, South Africa and Botswana are also two of the most
extractive industry dependent countries in the world, with the between
them the worst gaps between the rich and poor world in the world, the
worst HIV infection levels in the world and both suffering massive
unemployment levels. There is no second tier in the South African
economy. Those classified to be in the “second tier” are the working
class, the poor, the unemployed, the excluded, the majority black
African part of the population i.e. they are a product of the form that
capitalist development has taken in South Africa since the discovery of
minerals in the late 19th century.
In 2000, Anglo Platinum spent $193 million on expansions and two new
mines, and $450 million was spent in 2001 (Encyclopedia of the
Nations). If we consider than one ton of platinum currently sells at
US$ 46,400,000 and multiply this with Anglo Platinum’s proven reserves
of 145.56 million tons the astronomical income of this multinational
corporation from South Africa’s platinum reserves is realised once more
begging the question – why are the majority of South Africans faced
with poverty, unemployment, ill health, poor education, homelessness
and crime?
Impala Platinum Holdings Ltd. (Implats), South Africa’s
second-largest producer, operated 13 shafts within the Merensky and UG2
Reefs, and planned on investing $486 million by 2004 to maintain its
capacity at 31,110 kg per year until 2030—from 112 million tons of ore
reserves. Lonmin PLC, the third-largest PGM producer in the world,
divested its nonmining interests in 2000, restructured itself as a
focused PGM producer, and announced plans to increase production by 43%
within a 7-year period, to 27,060 kg per year of platinum, at a cost of
$550 million. The country’s total reserve base of PGMs (metal content)
was 62.8 million tons (Encyclopedia of the Nations). Freedom Park is
situated in the shadow of Implat’s Rustenburg operations. It is a
sprawling informal settlement and a festering sore of HIV/Aids, STIs,
sex work, alcohol and substance abuse and crime – it is also where
Implat’s workforce resides.
Primary gold output in 2000 was 430,778 kg, down from 491,680 in
1997 and the 1970 peak of 989 tons. Anglogold Ltd. (the gold division
of Anglo American) accounted for 37% of output; Gold Fields Ltd.,
25.7%; and Harmony Gold Mining Co., 15.3%—the three companies had
capacities of 161 tons per year, 125 tons per year, and 87.1 tons per
year, respectively. Gold, discovered in 1886, occurred along a 430-km
arc that stretched across Gauteng, the North-West, Mpumalanga, and the
Free State. Production of gold rose steadily through the 1960s and
1970s, as newer mines opened to keep pace with burgeoning world-market
demands. Gold production declined in the 1990s, because of reduced ore
grades, increased mining costs and industry restructuring. In 1996,
production reached its lowest level (496,846 kg) since 1956, although
South Africa was still the world’s largest producer. The world’s
deepest mine (3,777 m) was the Western Deep Levels gold mine, at
Carletonville (Gauteng).
Natural gem diamond output in 2000 was 4.75 million carats; and
natural industrial diamond, 6.06 million carats. De Beers mines
produced 10.29 million carats, from 23.3 million tons of material
treated. Alluvial diamonds were discovered along the Orange River in
1867, and surface diamonds, at Kimberley, in 1870; both types were
later discovered in other parts of South Africa. The Big Hole Mine, at
Kimberley, was the world’s largest hand-dug mine; by the time it ceased
production, in 1914, 14.5 million carats of diamond had been extracted
from 22.6 million tons of earth (Encyclopedia of the Nations). Diamonds
from Southern Africa made Great Britain the biggest exporter of rough
diamonds for more than a century. Southern Africa diamonds give
employment to 2 million cutters and polishers in India, whereas in
South Africa there are roughly 2000 cutters and polishers, 50% of whom
are unemployed because they cannot access rough diamonds. Southern
African diamonds make a significant contribution to the GDP of both
Belgium and Israel. Southern African diamonds partly fund the
oppression of Palestinians. Southern African diamonds contribute to
non-unionized child labour in India.
The wealth derived from the sale of diamonds provided the initial
capital for the development of the Witwatersrand gold mines. The market
created by the gold mines, in turn, provided the impetus for coal
mining, and, later, for the development of the iron and steel industry,
which, in its turn, required the development of other minerals.
Taxation of mining enterprises has supported South African agriculture,
and financed many of the country’s administrative and social needs.
The South African minerals industry operates on a free-enterprise,
market-driven basis. Government involvement was primarily confined to
ownership of the national electric power supply and the national oil
and gas exploration company; under the MPRDA, mineral rights reverted
to the state. The bulk of mineral land holdings and production has
historically been controlled by five mining investment houses. Since
1994, the industry has undergone a major corporate restructuring, or
"unbundling," aimed at simplifying a complex system of interlocking
ownership, at establishing separate core-commodity-focused profit
centers, and at creating an entry point for the aspirant comprador
bourgeoisie, that native bourgeoisie which is dependent on and serving
in the interest of imperialism, into the mining industry. The move from
Johannesburg to London of two major corporate financial headquarters,
Anglo American PLC and Billiton PLC, caused concern over "capital
flight," and the government in 2000 blocked the $3 billion merger of
Gold Fields Ltd. and Franco-Nevada Mining Corp., of Canada; in 2001,
though, the government approved a $19 billion takeover of De Beers
Consolidated Mines Ltd. by Anglo American. The leadership of the SACP
should be careful that is is not found defending the interests of a
comprador bourgeoisie instead of advancing the class interests of the
working class. It should also be careful that the lack of substance of
its strategies and tactics do not cause it to be marginalised by the
much more dynamic and forceful shift to the left in the ANCYL.
For the nationalization of mining under the control of the working class
The MPRDA was designed to release the monopoly stranglehold of five
mining investment houses and allow entry by the aspirant black middle
class, mainly ANC leadership figures, into the mining industry. Thus
instead of benefitting the population as a whole this limited
‘nationalization’ has benefitted only a small comprador elite. This
elite has entered mining in alliance with financial and mining
interests from the USA, Canada, Australia, Russia and China. This elite
faction of the capitalist ruling class sees Malema’s call for a more
comprehensive nationalization as a threat to their attempts to
accumulate capital. Malema will face significant opposition from the
bourgeois elements within the ANC. The SACP needs to stand only for the
interests of the working class, both the miners and masses of South
Africa as a whole. It must not feel pressured by the mining companies
and the class interests of the bourgeoisie. Instead it should enter a
constructive debate with the ANCYL on the important issue of
nationalization.
Malema’s call for nationalization represents a step forward.
However, in the face of massive bourgeois opposition the ANCYL has
retreated, claiming that South Africa should emulate the Botswana
model. The Botswana model is not really the answer to the key questions
that arise from the need to build a socialist economy and society in
South Africa. However, Malema is a step ahead of Cronin and Turok in
this regard. The events of the last week, particularly the remarks by
Shabangu at the mining indaba and Oppenheimer’s defence of her is
pushing the Youth League into an increasingly more radical position. It
also shows that Oppenheimer is not even prepared for the limited
nationalisation represented by the Botswana model, thus contradicting
his oft quoted lofty praise for the relationship between De Beers and
the government of that country. The SACP leadership needs to back
Malema’s call, but also point out the limitations of mine
nationalization in isolation. It is important therefore to note the
positive development in the thinking of the ANCYL in its realisation
that nationalizing the mining sector would be an important gain for the
working class, but should be accompanied with nationalizing banking and
major industry in the interests of the masses. This would be the only
way to realise the Freedom Charter’s demand that “The mineral wealth
beneath the soil, the Banks and monopoly industry shall be transferred
to the ownership of the people as a whole.”
Botswana is a poor example, and it is important that we reiterate
this. The fact that the Botswana government has a 50% share along with
DeBeers in Debswana does not mean that the people of Botswana are
benefitting from the fabulous wealth produced in that country’s diamond
mines. Botswana has an unemployment level ranging between 25% and 30%,
it has the highest poverty gap in the world, it has after South Africa
and Swaziland the highest HIV/Aids infection rate, almost half of
households in Botswana live below the official poverty datum line, and
most households do not have water borne sewage. At the same time it has
had one of the highest economic growth rates in Africa over the past
two decades. Given that it is a capitalist country the economic wealth
generated in the country is usurped by a comprador bourgeoisie and
international capital. The state’s role in the economy is to police the
Botswana public in general and the working class in particular –
“creating favourable conditions for investment”. State ownership is not
the answer if the state is an instrument of the capitalist ruling
class. Only when the state becomes the instrument of the working class
intent on abolishing class exploitation and oppression, and redirecting
the income generated by the economy in general and mining in particular
to address the challenges of poverty, unemployment, disease,
illiteracy, environmental destruction will the socialization of the
mining industry be useful.
If we are going to demand socialization then we need to fill this
vague term out with concrete demands. Mining in South Africa will only
benefit the majority of South Africans if it is placed under the
control of the working class, along with banking and the commanding
heights of the economy, as nationalized concerns planned in the
interest of the masses. In the final analysis the bourgeois state is
unable to do this. By putting itself at the head of the working class
with a bold socialist programme the SACP can struggle to bring about a
real transformation of society. Instead of condemning the ANCYL for its
progressive vision, the SACP should take up the challenge and provide
revolutionary leadership to the working class. Smashing the bourgeois
state machinery and replacing it with a socialist planned economy is
the only genuine road to socialism in South Africa.
This article was first published on www.marxist.com
Works Cited
Encyclopedia of the Nations. (n.d.). South Africa – Mining. Retrieved December 2, 2009, from Encyclopedia of the Nations
Hlekiso, T., & Mahlo, N. (2006, October). Wage trends and inequality in South Africa. Retrieved December 2, 2009, from South African Reserve Bank
Matuma letsoalo, Malema Strikes Again, Mail and Guardian Feb 5 to 11, 2010. p.10
Sachs, S. (1952). The Choice Before South Africa. LONDON: Turnstille Press.
Wikipedia. (-). The Economy of South Africa. Retrieved December 2, 2009, from Wikipedia.Org
Worldsalaries.org. (n.d.). Canada Average Salaries & Expenditures. Retrieved December 2, 2009, from World Salaries
