WHAT HAP­PENS TO

Finweek English Edition - - Online -

min­ing towns af­ter min­ing has ended? In the case of Kleinzee – a di­a­mond min­ing town about 600km north of Cape Town on South Africa’s west coast – it’s near obliv­ion. Hav­ing sprouted ex­pressly to sup­port marine di­a­mond min­ing, the com­mu­nity is now clutch­ing at straws fol­low­ing De Beers’ de­ci­sion to ratchet down op­er­a­tions.

“All my friends lost their jobs,” Ann En­gel­brecht told an AFP news agency re­porter in a re­port posted on Min­ingmx in Au­gust this year. “This is a min­ing town – what must they do here?” she asked.

En­gel­brecht runs the lo­cal Spar su­per­mar­ket and has seen sales fall 60% since tak­ing it over in 2007. She’d worked for De Beers since 1984 but won­ders whether her ca­reer switch was a wise move af­ter hav­ing al­ready suf­fered two heart at­tacks – from stress. “It’s just not worth it any more,” she says.

Vir­ginia, the gold min­ing town in SA’s Free State prov­ince, is an­other typ­i­cal ex­am­ple of what hap­pens when min­ing leaves. Gold was dis­cov­ered there in 1955 and an ex­ten­sive gold mine in­dus­try de­vel­oped around it. But the once vi­brant in­dus­try is in de­cline. Har­mony Gold keeps the flag fly­ing for gold but at cur­rent rand gold prices even its key Free State mines are un­der pres­sure and could be re­viewed.

One par­tic­u­lar prob­lem is how res­i­dents re­lo­cate when, hav­ing ploughed sav­ings into mort­gage re­pay­ments, they find prop­erty de­mand so poor it’s im­pos­si­ble to get a re­turn. Who wants to pay R1.5m for a house in a town without a beat­ing heart? They ei­ther stay or move to Jo­han­nes­burg and live with their chil­dren.

SA’s Gov­ern­ment has at­tempted to head off the prob­lem of min­ing ghost towns by leg­is­lat­ing for it, quite puni­tively in some cases. For ex­am­ple, the Min­er­als and Petroleum De­vel­op­ment Re­sources Act of 2005 re­quires min­ing firms to sub­mit so­cial and labour plans or risk los­ing their right to mine. One of its aims is to stim­u­late in­dus­try out­side min­ing and min­ing ser­vices.

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