Songezo Zibi:

SOME months ago, many South Africans had a fit when Nigeria rebased its gross domestic product (GDP), making the West African country the biggest economy on the continent. The idea of being “overtaken” by a country many clearly didn’t think much of, didn’t sit well.

They shouldn’t have bothered. Nigeria’s economy has probably been bigger than ours for some years now. The only reason we had no idea was that successive Nigerian governments had not measured economic activity the way our government so diligently does.

Statistics SA (Stats SA) produces a constant stream of economic and financial data that is available for free on its website. Sadly, many South Africans just don’t bother to read it. I’d go as far as arguing that most don’t even know the data are there.

This lack of awareness of critical statistics hasn’t stopped any of us from dabbling in matters we could do with more information on. Mining is one of them. Public discourse gives the impression mining is to SA what oil is to Nigeria or gas is to Russia. It is not.

In fact, its contribution to GDP has been shrinking for longer than I have been alive, and Stats SA’s latest annual financial statistics report paints a grim picture. It is published a year in arrears so the latest available is the year 2012, critically before the two most recent mining industry strikes.

The first thing it shows is that mining makes up a mere 7% of total business enterprise turnover, at about R515bn. It is dwarfed by manufacturing at R1.67-trillion, yes, the sector in which the National Union of Metalworkers of SA is about to strike and bring to fruition the already expected contraction in SA’s economy.

The mining turnover looks impressive until you consider the expenditure side, all R418bn of it. Employment costs amounted to R86.3bn or 21% of all expenditure. The rest went to a long list, including tax at just more than R28bn. This excludes the tax paid by suppliers who consumed the rest of the expenditure, many of whom are local, as well as the pay-as-you-earn from employees of mining companies and suppliers. The government’s slice is, therefore, considerably higher than what is immediately obvious.

So the platinum companies should easily be able to pay R12,500 per month to mine workers then, right? The answer depends on who you ask and how they understand the core purpose of the firm.

While Stats SA no longer publishes the more concise SA Mining Report, CitiBank has published a similar document, but which looks specifically at a selection of platinum companies including Anglo American Platinum, Lonmin and Impala, the three that had been embroiled in the industrial dispute with the Association of Mineworkers and Construction Union and its members.

It says in the five years from 2009 to 2013, the platinum mining sector distributed about R450bn. The biggest portion, 33% or R150bn, went to employees in the form of wages and benefits. Suppliers cost R125bn, utilities such as Eskom and other municipal services benefited to the tune of R29bn, while R95bn was reinvested into sustaining or expanding operations.

How much did providers of capital, shareholders and borrowers, in other words, get during this time? The answer is R5bn or just 5% of the revenue generated by mining operations. One of these is the government’s Public Investment Corporation (PIC).

The common argument is that greedy shareholders, also the PIC and Industrial Development Corporation, I suppose, want to rake in the profits and leave the poor, hard-working workers destitute. Well, it doesn’t make a lot of sense to blame the guys who only walk away with 5% of the loot, does it? But since it fits right in with the common narrative, that is exactly what most of us have been doing since the Marikana massacre in August 2012.

We have two choices. We can accept that we are dealing with fundamental, historical structural deficiencies that affect other sectors too and work hard at finding ways of eliminating them in the long term. A security guard from the Eastern Cape who works in Johannesburg has exactly the same difficulties as a mine worker in Rustenburg.

The security guard earns far less, but doesn’t have the benefit of historical outrage to make his case a public moral issue, so he’s left to earn a pittance. If you ask me, R12,500 is still too little anyway given how many people have to be supported by mine workers and others in a similar position.

The other choice is to behave like ignorants, in which case I propose the following: let us do away with dividend and debt repayments so that the 5% that went to shareholders and banks is given to workers. When the “greedy” shareholders exit, the PIC can buy their shares until it owns 100% of all the mines. Since the PIC is an agency of government and holds the pension funds of civil servants, many of whom are union members anyway, perhaps they really won’t mind having their pensions and provident fund contributions depleted like that.

No price is too high to pay for the privilege of avoiding harsh realities that need difficult decisions to resolve.