Tuesday, February 05, 2013

Into Africa: 2...  

Mining of platinum, gold and diamonds is a major component of the South African economy. To my mind, the mining companies have made a grave misjudgment in depending on enormous amounts of migrant labor. That dependence is contributing to the current economic meltdown in SA.

"Migrant" in this case means something far different than we are used to here.
Africans went to work in the Kimberley mines for a variety of reasons. Many went to earn cattle for bridewealth or ploughs to improve their farming for the market. Others went to earn guns on the instructions of chiefs and elders. Take, for example, the Pedi, a Sotho people who lived in the north-eastern Transvaal and dominated the Kimberley labour market in the 1870s. Before the discovery of diamonds the Pedi had been travelling to the Cape Colony for some forty years or more to work as migrant labourers. They earned money because their chiefs understood the importance of acquiring guns to protect themselves against white settlers, who had begun to move into the Transvaal region in the 1830s and 1840s. The Pedi sold their labour to buy guns because they did not have easy access to commodity markets for agricultural produce. In this respect the Pedi differed from other African peoples, who were able to sell produce rather than labour for guns. In the 1870s the need for guns grew as the pressure of white settlers on African land increased. Consequently, the discovery of diamonds was opportune for Pedi; Kimberley was a shorter distance than the eastern Cape, wages were higher and less time was spent in working for a gun and/or bridewealth.
The diamond mines provided the largest and most accessible labour and gun markets for Africans from 'the interior of southern Africa. Africans went to do a spell of minework, which became culturally institutionalised as a rite of manhood. They left at the command of their chiefs and were subject to headmen in the mining camps. They commonly worked between three and six months in the mines, bought guns or other commodities and then left for home. Some never returned, others made it an annual affair. Yet, in the early days, they remained cultivators and pastoralists who complemented their primary activities with a stint in wage labour.
Such Africans were not ideal mineworkers. They were unaccustomed to the heavy work of digging and loading, but more importantly, most did not stay long enough to learn industrial discipline. Mine- owners tried to control the supply of labour to the mines through recruitment, government sponsored schemes to protect the labour routes to the mines and the informal system of labour touting. They were not as successful as they would have liked. [More]
At the same time, with unemployment around 25%, had mine operators invested in technology more to replace labor, the problems facing them today would only have been worse. The future for SA mining appears to be less about precious minerals than coal.
Diamond and gold production may now be well down from their peaks, though South Africa is still no. 2 in gold[1] but South Africa remains a cornucopia of mineral riches. It is the world's largest producer[2] of chrome, manganese, platinum, vanadium and vermiculite. It is the second largest producer[3] of ilmenite, palladium, rutile and zirconium. It is also the world's third largest coal exporter.[4] South Africa is also a huge producer of iron ore; in 2012, it overtook India to become the world third biggest iron ore supplier to China, who are the world’s largest consumers of iron ore.[5]
I wonder if, along with demand, the relatively lower labor requirements for coal mining  - especially open pit - are driving the switch.
Demand for coal is set to increase due to the increasing demand from the domestic power and synthetic fuels sectors. It is estimated that, over the next decade, state power supplier Eskom alone will require an average of more than 200 million tons of coal annually.
In order to meet demands from India and China, which have rapidly growing industrial markets, coal production is expected to increase to reach a capacity of more than 350 million tons by 2015.
The Richards Bay Coal Terminal, the largest coal exporting terminal in the world, expanded its coal capacity to 91 million tons per annum at the end of 2010 to meet demand, an increase of almost 20 million tons of coal annually.
Coal is the largest category in the South African mining industry in terms of production, contributing over two-thirds of the total production volume in 2009. The metallic mineral category accounted for almost a fifth share of total mineral production in the same period, while the non-metallic mineral category held the remaining 13% share. The growth of the metallic minerals category in will be driven by iron ore, which accounts for more than three-fourths of metallic mineral production. [More]
It also looks like agriculture will be profoundly affected.
South Africa has increased the basic daily wage of farm workers by 52% following a violent strike in the wine-producing Western Cape region, the labour minister has said.
Mildred Oliphant said the new minimum wage would be $12 (£8) - up from $8 but less than the $17 the workers had demanded.
At least one person was killed during January's two-week strike.
The strike was suspended after the government promised a wage review.
Most of the Western Cape's 3,000 farm workers are not employed on a permanent basis - despite working on the farms for many years. [More]
The bets are off on what 2013 will mean to Africa's largest economy.

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