The big exception to the commodities downturn we have seen over the past year is gold, which always has been somewhat a counter cyclical commodity. It did not thrive as much as hoped for during the run up to the last commodities peak, but overall over the past couple of years gold miners have been in a good space, in terms of price and demand economics.
Or at least they should be in a good space. South Africa, once the world’s largest gold producer, but whose output has continued to shrink rapidly, was the site of a great tragedy recently.
The tragedy was the deaths of at least 86 illegal miners in some type of fire or gas related accident in an abandoned portion of the Free State’s vast interconnected underground gold labyrinth. This in one swoop exceeded the total death toll in the whole of the mining industry this year. Those people died because they were desperate, willing to risk their lives to try to earn a living, and were part of a chain that saw them exploited by thugs. But indirectly they died for larger reasons.
Unions and government in the name of safety ensure that operating shafts are shut down for several days when there is a fatality. Mine operators officially cannot say anything because they, rightfully, cannot argue against safety as being the most important goal. And rightfully, a lot of attention has been paid to the issue of safety and reducing the annual death toll in South Africa’s deep level mines, with some success it seems.
But my impression is that the mining companies are being bullied, forced, by the unions and government into shutting shafts when an unfortunate fatality incident occurs, and this achieves nothing. It reeks of the politics of retribution and is simply punitive. What ultimately is happening is that it diminishes the ability of deep level shafts to operate profitably, raises the profitability threshold and the industry continues to shrink.
Close to a hundred people have died because they had no jobs, but were still daring, enterprising and desperate enough to try to earn something even if they had to spend months without seeing the sky, no matter the risk.
And inevitably, and with increasingly brazen hypocrisy, the dominant mining union, the National Union of Mineworkers, has tried to blame Harmony for the tragedy, no doubt because Harmony mines nearby and happens to be the biggest mining company in the Free State. The union should not be allowed to get away with this. If there are fingers to be pointed, perhaps they should be pointed in a different direction.
Maybe look to a government weak on law enforcement, which has created too much legislation that is deleterious to the mining sector, which has created too much uncertainty in the discretion allowed in the interpretation of mining policy, allowed too much space for unscrupulous opportunists. It is a government which has overseen the shrinkage of the country’s gold mining sector even during the biggest upsurge in the gold price in decades.
Let us point fingers at unions which once may have deserved respect and could be considered as one of the cornerstones upon which fully representative democracy in South Africa was achieved. In fact, such was my support for the views of the National Union of Mineworkers over a decade and a half ago, and the exposure I gave them, that a representative of a prominent mining company referred to me as sounding like a reporter from Pravda.
But that was then, and now the leadership of the dominant unions seem increasingly to be nobody’s friends, not even of those they purportedly represent. In such cases the workers are being taken for fools, and on their part are letting it happen. And all mining management can do is try as best they can to manage things on their own – when in reality they should be able to appeal to justice authorities and a government.
Yes, if fingers are to be pointed regarding the Free State tragedy, let us point them at those who make it harder to mine profitably while achieving nothing. Let us point fingers at those that through actions – they try to claim are intended to celebrate and enhance the value of human life – create situations that lead to job losses and ultimately the type of tragedy we have witnessed.