Contact l Sitemap

home industries issues reasearch weblog press

Home  » Industries » Natural Resources

SOUTH AFRICA: Mining Giants Seek Their Fortune Abroad

by Linus AtarahInter Press Service
November 11th, 2005

A number of South African mining companies, long a pillar of the country's economy, are now primed for take-off to countries with lower mining standards and labour regulations, says Ponti Zimisele, a South African trade unionist and labour researcher.

Presenting research findings here Wednesday on mining companies in Africa, Zimisele noted that mining laws and labour requirements had been tightened up in post-apartheid South Africa -- and that mining companies were finding it difficult to adjust accordingly.

This had prompted an "exodus" to other countries: "They are running away from the heat," he added.

The research focused mainly on three South African-based mining companies -- Gold Fields Limited, AngloGold and Motorex -- and their operations in six countries: South Africa, Ghana, Zambia, Namibia, Tanzania and Zimbabwe.

The African Labour Research Network conducted the study. This organisation forms part of the African Labour Observatory, which receives most of its funding from the Trade Union Solidarity Centre of Finland (SASK), and is tasked with monitoring the activities of multinational companies around the world.

According to Zimisele, South African mining firms are finding the employment equity provision in the country's mining charter troublesome. This clause requires mining companies to ensure women make up 10 per cent of their labour forces by 2009.

The firms are also under pressure to meet another requirement which obliges mining companies to plough back profits into sustainable job-creation schemes in the communities where they are located.

"Building schools isn't enough. Rather, there must be projects in the communities to maintain jobs after the mines close down," said Zimisele.

In addition, the mining charter stipulates that black workers should be given training to enhance their ability to work in more senior positions that are mostly the domain of whites.

Mining companies, noted Zimisele, are trying to skirt the regulation by replacing white men with white women instead of employing black men -- the argument being that women are also a minority group which needs assistance if it is to be represented in higher levels of management.

Companies that fail to meet these stringent requirements may not have their operating licenses renewed come 2009; that is why, as Zimisele put it, "they are feverishly engaged in these oversees adventures."

Along with Gold Fields, AngloGold has extended its operations widely over the past decade: the two firms are now present in the United States, Australia, Ghana and Canada. They are also listed on major stock markets around the world.

Gold Fields operations in Ghana, for example, were insignificant prior to the advent of democracy in South Africa in 1994, said Zimisele. The company is now the second largest in that West African country, after AngloGold.

Gold Fields is also trying to establish a foothold in Finland, which has deposits of platinum and nickel, and small quantities of gold.

There is probably going to be disinvestment by the mining companies in South Africa over the long run, Zimisele noted, with large shares of these firms being sold to black businesses while the mining companies focused on their international activities.

While AngloGold initially had nine mining shafts in South Africa, he said, this number had been reduced to six since 1994, mostly through sales to black businesses.

However, union activists in Finland have pointed out that Gold Fields is unlikely to find the going much easier in this Scandinavian country.

"In Finland, going through the paper work to meet environmental standards alone can take up to five years before a mining company begins operations," said Turja Lehtonen, co-ordinator of mining activities in Finland's Metal Workers Union.

Similar sentiments were voiced by SASK project coordinator Jukka Pääkkönen.

"Mining does not form a significant part of the Finnish economy, so I don't think we are going to sleep over and let them ignore environmental and labour regulations," he said.

Nevertheless, Lehtonen said Gold Fields and other mining companies were welcome, because they would create an estimated 700 jobs: a welcome development in the northern part of Finland, which has higher unemployment than the rest of the country.

The study by the African Labour Research Network indicated that the three targeted mining companies had generally performed satisfactorily on the eight core labour standards set by the International Labour Organisation. These include freedom of association for workers, and the elimination of child labour.

"With some exceptions, the research findings suggest that the South African mining multinationals that were studied largely comply with labour legislation and collective bargaining agreements," said the report in its conclusions.

However demanding these laws and agreements might be, Anthony Baah -- a Ghanaian labour researcher and co-author of the report -- cautioned African governments against lowering the regulatory bar to attract foreign investment, so engaging in "a race to the bottom".

This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.