The flight from Heathrow was packed, as were many of the other international flights into Cape Town. There were few rooms free in the better hotels. The attraction was the world’s largest annual mining conference, two weeks ago.
The African Mining Indaba’s website boasted of “7,250 global professionals, 2,100 international companies from six continents, 37 African and 10 non-African government delegations converging for the world’s premier mining investment event”.
It was, as a former SAS officer lately engaged in prospecting for gold and copper in Afghanistan pointed out, a “pretty good place to be, for networking, for meeting up with people, looking at possible contracts coming up”.
Last week many of the hotels and restaurants in the Mother City were also full, this time with MPs and civil servants and their families. They were there for the State of the Nation address by the President, Jacob Zuma. But this time there was also rancour. The country’s Treasury had set a limit of 1,300 rand (around £72) a night for accommodation. Some delegates complained that instead of the usual five-star hospitalities, they were having to put up with establishments which were “little more than B&Bs”. Instead of saloons, they were asked to drive around in “tourist cars”.
The pre-speech party was a glittering affair sponsored by the mining conglomerate BHP Bilton. But the official gala dinner that followed had also been subjected to cutbacks – the alcohol bill capped at 100,000 rand for the 2,000 guests. This resulted, the Cape’s Sunday Times reported, in “some MPs ditching the dinner for popular night spots”.
Then, at the weekend, came the news that up to 200 men had been stuck down an abandoned mine near Johannesburg while illegally digging for gold, possibly trapped by boulders placed by a rival gang. This is not particularly unusual in this country and 11 of the miners were rescued fairly quickly. The others, however, reportedly refused to come out because they feared arrest once they got to the surface. This was confirmed by Werner Vermaak of the emergency services. Those down the shaft will not be denied help, but “will surely be detained if they come to the surface”, he said.
South Africa’s mineral wealth is estimated at $2.5 trillion, making it potentially the fifth biggest mining sector internationally in terms of GDP. It has the world’s largest reserves of manganese and platinum metals as well as sizeable supplies of chromite ore and vanadium. The economy, however, is based on gold and diamond sales, with the former providing a third of the exports.
Around $500m a year is lost in gold sales due to illegal mining, according to research by South Africa’s Department of Mineral Resources in 2008, and that figure has risen considerably since. This haemorrhage of revenue is being used by the authorities in taking a tough stance on the trapped miners. Nine have been killed this month.
But it is not just the illicit sector which is causing deep controversy. The multinational Anglo American Platinum is taking unprecedented legal action against the Construction and Mineworkers Union (Amcu) for 600 million rand lost due to a sustained series of strikes.
The Finance Minister, Pravin Gordhan, has stressed that the ailing economy cannot cope with the continuing industrial strife. The African National Congress (ANC), which swept to power in the first post-apartheid elections, is facing severe disenchantment over its failure to alleviate poverty and the problems in the mining sector do not augur well for Mr Zuma’s government with elections coming up in three months. Moody’s, the credit raters, point out: “The economy has never fully recovered its momentum following the global recession, partly due to domestic political and economic turbulence ignited by violent labour unrest and the associated uncertainty that it has created.”
The memory of Mr Zuma being resoundingly booed at the memorial to Nelson Mandela at Soweto Stadium, in front of the world’s media and 91 heads of state, is only too fresh here. The President remains mired in recriminations over 200m rand of public money on his home.
The mining unions, which see themselves as the vanguard of organised labour, are also disinclined to compromise. Bitterness continues over the killings 18 months ago of 34 workers at the Marikana platinum mines near Johannesburg amid claims that the ANC was too cosy with the mine owners.
The reaction on social networks seems to reflect a significant swathe of public opinion. One blog about the trapped miners asked for food to be sent down: “After all, you can’t eat gold.” Another retorted: “Yes you can, that’s what our ministers and officials have been doing for so long, they have had a rich diet. They cannot stomach a simple diet even for a little time, look at the fuss they made about cutting back on their luxuries for Zuma’s speech.”