A call in S. Africa to na­tion­al­ize mines

Strug­gling com­pa­nies have trou­ble pay­ing work­ers, but an­a­lysts doubt that the state could do any bet­ter.

Los Angeles Times - - The World - Robyn Dixon re­port­ing from springs, south africa

When Nel­son Man­dela’s grand­son and Ja­cob Zuma’s nephew took over the in­sol­vent Grootvlei gold mine, east of Jo­han­nes­burg, the work­ers thought they, and the mine, were saved.

But things have only got­ten worse for the work­ers, most of whom have been on strike since March over a por­tion of their wages that they said had not been paid since De­cem­ber 2008.

Zondwa Man­dela, grand­son of the coun­try’s first black pres­i­dent, Nel­son Man­dela, and Khu­lubuse Zuma, nephew of the cur­rent pres­i­dent, are ex­ec­u­tives of Aurora Em­pow­er­ment Sys­tems, a pri­vate black em­pow­er­ment com­pany, which took over the mine about a year ago.

Most work­ers think the only thing that can now sal­vage their liveli­hood, even if it has no ef­fect on their back pay, is na­tion­al­iza­tion.

Govern­ment in­volve­ment in busi­ness was a key com­po­nent of the African Na­tional Congress party’s 1955 blue­print for up­lift­ing the black masses. But it’s not been up for se­ri­ous de­bate since Nel­son Man­dela aban­doned the pol­icy in 1992 at the World Eco­nomic Fo­rum in Davos, Switzer­land, two years be­fore his elec­tion as pres­i­dent.

Na­tion­al­iza­tion has re­gained trac­tion in re­cent months be­cause of the fail­ure of the govern­ment of Pres­i­dent Zuma to de­liver jobs and ba­sic ser­vices, such as health­care and ed­u­ca­tion, to mil­lions of shack­d­welling black South Africans.

Its loud­est pro­po­nent is the pop­ulist leader of the ANC Youth League, Julius Malema, who went to Venezuela to study Pres­i­dent Hugo Chavez’s na­tion­al­iza­tion drive and came back a con­vert, be­liev­ing own­er­ship of South Africa’s re­sources would cre­ate a mas­sive bud­get in­fu­sion that could be di­rected to im­prov­ing the lives of the poor.

The ANC-led govern­ment has ig­nored the calls of the Youth League and the Congress of South African Trade Unions for a rad­i­cal left­ward shift.

But Ja­cob Zuma’s po­lit­i­cal weak­ness, af­ter his re­liance on the unions and the Youth League to win the ANC lead­er­ship in 2007, has led to se­vere fac­tional in­fight­ing, an­a­lysts say, with his erst­while al­lies threat­en­ing to with­draw sup­port un­less they have more say over the econ­omy.

“Zuma has been promis­ing dif­fer­ent groups dif­fer­ent things,” said po­lit­i­cal an­a­lyst Wil­liam Gumede of the Uni­ver­sity of the Wit­wa­ter­srand.

“In that sit­u­a­tion, you can’t do any­thing and there’s paral­y­sis and a vac­uum. Peo­ple are us­ing the vac­uum to get con­trol of the ANC, but if you’re go­ing to get con­trol, you’ve got to ap­pear more pop­ulist than ev­ery­body else,” Gumede said. “That’s why you’re get­ting these pop­ulist calls for na­tion­al­iza­tion from peo­ple like the ANCYL,” the ANC Youth League.

The dry wind­blown flats east of Jo­han­nes­burg, pim-

pled by enor­mous clay slag heaps, were long among the rich­est gold ar­eas in the coun­try. But then the metal be­gan to run out and com­pa­nies were forced to dig deeper and deeper, mak­ing the costs, and dangers, soar, all for di­min­ish­ing prof­its.

The Grootvlei mine has an air of rusted despair, like some ex-Soviet in­dus­trial relic in Siberia. Min­ers live in bar­rack-like hos­tels, with­out wa­ter, power or func­tion­ing toi­lets.

They gather for a union meet­ing on a chilly morn­ing, but there’s no good news about the back pay they are seek­ing in their strike.

There’s not much lever­age these days. Rather, there’s anger among work­ers who feel that the ANC elite has aban­doned them and that the govern­ment has not de­liv­ered on prom­ises to cre­ate jobs. The of­fi­cial un­em­ploy­ment rate is 25%, but it’s more than 40% if those who have given up look­ing are in­cluded.

A miner at Grootvlei mine, Head­man Capu, 40, ar­rived in Jo­han­nes­burg look­ing for work in 1989, do­ing odd jobs un­til he was em­ployed in the mine 10 years ago.

“I like Malema be­cause he’s the one who is talk­ing about tak­ing the mines un­der the govern­ment. I want that to hap­pen in mines like Aurora be­cause I’m on con­tract. I’m not a per­ma­nent worker. We don’t get ben­e­fits. We don’t have med­i­cal aid. I’ve got no pen­sion.

“We want the mine to be­long to the govern­ment be­cause the govern­ment will pay pen­sions.”

Capu is dis­il­lu­sioned

‘The time when you need cap­i­tal is pre­cisely the time when the govern­ment does not have it be­cause there’s a down­turn.’

— Gavin Kee­ton,

eco­nom­ics an­a­lyst at Rhodes Uni­ver­sity

about Black Eco­nomic Em­pow­er­ment, the pol­icy the ANC adopted when it came to power in 1994. It’s sup­posed to shift the econ­omy out of white hands, giv­ing blacks eq­uity and po­si­tions in man­age­ment. He’s also an­gry that he can’t feed his fam­ily or find an­other job.

“They promised us jobs, but we lost jobs. In so many mines, they re­trenched peo­ple.”

But the very prob­lem that caused the mine’s fail­ure and the re­trench­ments in the in­dus­try — the global eco­nomic cri­sis — would also make it dif­fi­cult for the state to op­er­ate mines, an­a­lysts say.

Gavin Kee­ton, an eco­nom­ics an­a­lyst at Rhodes Uni­ver­sity, said the govern­ment would have to bor­row at least $120 mil­lion to buy South Africa’s mines.

“There’s a fi­nan­cial prob­lem and that’s that the min­ing in­dus­try is a cycli­cal in­dus­try and when there’s a down­turn, min­ing com­pa­nies turn to their share­hold­ers for cap­i­tal,” Kee­ton said.

“The prob­lem is that the time when you need cap­i­tal is pre­cisely the time when the govern­ment does not have it be­cause there’s a down­turn. That’s one rea­son state min­ing com­pa­nies have not been suc­cess­ful in other coun­tries.”

The congress of trade unions is push­ing for land seizures, price reg­u­la­tion, ex­port and im­port taxes and a tax to cap the earn­ings of the rich­est 10%.

“We do want a state that can play a more di­rect role in all the ar­eas we think are strate­gic on the econ­omy,” Zwelinz­ima Vavi, head of the congress of unions, said at a re­cent news con­fer­ence, brush­ing off con­cerns that na­tion­al­iza­tion would scare off in­vestors.

“If ev­ery­thing we do had to be ap­proved by in­vestors then we would be stuck in the cur­rent sit­u­a­tion for 100 years or more,” Vavi said.

The trade unions congress is part of the gov­ern­ing al­liance with the ANC and Com­mu­nist Party and has grown in­creas­ingly frus­trated with the govern­ment’s re­fusal to take its views into ac­count.

At the ANC’s pol­icy con­fer­ence last week in Dur­ban, Zuma man­aged to post­pone the na­tion­al­iza­tion de­bate un­til 2012, when the main con­fer­ence on pol­icy and lead­er­ship elec­tions are to be held. But an­a­lysts said this will only drag out the un­cer­tainty.

“The ANC have been un­able to man­age all the dif­fer­ent fac­tions. There’s no co­he­sion, no dis­ci­pline,” Gumede said.

“In the run-up to 2012, the Youth League is go­ing to say they won’t sup­port any­one for the lead­er­ship un­less they agree to na­tion­al­iza­tion. The bat­tle of rhetoric around na­tion­al­iza­tion is go­ing to con­tinue un­til 2012, and it will cre­ate more un­cer­tainty.”

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