Illegal mining too big for companies to beat
Pan African Resources, a gold miner in Mpumalanga, has doubled spending on security to R106m to prevent illegal mining primarily at its Barberton property.
Barberton, which has been mined since 1886, is a Swiss cheese of shafts and underground workings in the hills bordering Swaziland. A decade ago there was a huge rise in illegal mining around the town where Pan African is essentially the only mining game in town.
The company clamped down as much as it could with internal security helped by the police.
After being out of the limelight for a decade, Pan African CEO Cobus Loots said at the company’s annual results briefing last week that had it not more than doubled spending on security to R106m its operations would have been overrun by illegal miners.
A response in parliament to a DA question shows that only 10 of Mpumalanga’s 90 police stations have staffing levels in line with the UN’s recommended ratio of one police officer to every 220 citizens.
Given the dire straits of SA’s economy and abysmal state of municipalities, let alone policing, it is little wonder that communities around easily accessed gold deposits, along with criminal syndicates, have stepped up their efforts as the gold price remains above R700,000/kg.
“We can, in the normal course, protect our operations at a cost, but illegal mining and its effect of unsettling communities and adversely affecting mining economies is beyond the scope of mining houses to resolve on their own,” Loots said.
This is not a new problem. But it is one the government has been singularly unsuccessful in stopping.
Greater collaboration between gold mining companies, police and the judiciary, combined with the political will to tackle the problem that is now a multimillion-rand criminal business with no benefit to the fiscus and SA at large, needs urgent attention.
MOBILE OPERATORS
In years to come, data-only network Rain may become a worthwhile telecoms investment with its business model.
For years, SA’s mobile operators have been entering new business fields. Like squirrels gathering nuts in preparation for a cold winter, they anticipate the day when voice and fixed-line revenues will no longer be the industry’s bread and butter.
With about 95-million subscribers, operators have moved into financial services, video streaming, instant messaging and other sectors to leverage their large user bases to create new businesses, as Apple is doing with its new Apple TV+ video-streaming service where all new devices sold will give the customer free one-year access to the platform. With an average of 50-million devices sold a year, that’s a potentially large subscriber base in a short time.
Local operators have been burdened by infrastructure bills for towers and keeping the lights on for 2G and 3G users. Rain doesn’t have this problem. Offering only data, it does not carry the cost of cellphone towers for voice. Its roaming agreement with Vodacom assures customers of cellphone service in most areas. Telkom says it is trying to have no users on 2G in coming years. The group plans to build 7,000 towers for 4G and 5G. This may yield better results as the two technologies allow for more users and services driving data consumption, which helps with the bottom line.