SOUTH AFRICA: Mining Giants Seek Their Fortune Abroad

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

"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

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".

AMP Section Name:Natural Resources
  • 183 Environment
  • 184 Labor

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