Letter from South Africa

A GLINT OF CHANGE IN THE GOLD MINES

In the dimly lit mine workings nearly two miles below the earth's surface, sweat-drenched black men bend over, wrestling jackhammers and slip-sliding on the jagged shards of ore in 100F heat. Here at Level 88 of the Elandsrand Gold Mining Co.'s Carle- tonville mine, I can understand why critics say South Africa's wealth (for whites only, of course) would not have been mined if not for the surplus of cheap, black labor corralled by apartheid.

The men at Elandsrand, owned by Anglo American Corp. of South Africa, toil in a claustrophobic channel that is just over 3 feet high and tilts at a 24 degree angle. It is suffused with dust and the thundering roar of drill against rock. Supports called Loadmasters keep the untold weight of earth above from sandwiching what little space there is.

There's no avoiding the squeeze on South African gold mining, however. Overall production dropped to 522 tons in 1995, down 61.5 tons from 1994, to the lowest levels since 1957. South Africa supplied 73% of the world's gold in 1979, but the output has declined steadily and today accounts for just 30%. The mines have shed more than 100,000 jobs since 1990 with employment now totaling about 360,000. Elsewhere in the world, companies are opening surface gold mines that use costeffective heavy equipment, but here in South Africa, gold is mined the old-fashioned way, by men digging ever deeper into the earth. Miners may spend 45 minutes just getting to the rock face.

Costs are up, too. With higher-grade deposits depleted, companies must mine and process more ore to produce an ounce of gold. During the sanctions era, there was little investment in new mines, and South Africa's protected economy has driven up the costs of everything the mines use, from dynamite to timber. In all, 1995 costs were 36% above the average of the U.S., Canada, and Australia.

THREATENED CLOSINGS. The cost squeeze came to a head in January at the world's largest gold mine, Anglo American Corp.'s Free State Consolidated Gold Mines Ltd. (Freegold) in Welkom, two hours south of Johannesburg. Bobby Godsell, chairman of Anglo American's gold and uranium division, gave mine management and workers an ultimatum: Turn Freegold around or five of the 26 shafts would close, costing 10,000 jobs. An additional six shafts could well follow. The five endangered shafts piled up $11 million in losses for the quarter ended Dec. 31, causing Freegold as a whole to report a $1.6 million loss for the same period.

Despite the negative statistics, South African economists say there is still as much gold underground as has been dug out since the 1886 discovery created Johannesburg, or Egoli, "the city of gold," as Zulus call it. It's possible the mining houses could have kept on sending blacks underground in search of it. But apartheid effectively ended in April, 1994, with the election of Nelson Mandela as President, and the new era ended traditional gold mining, as well.

The black miners--laborers actually, because the title "miner" was long reserved for whites--are now not only bitter but emboldened. Their National Union of Mineworkers, or NUM, is an important ally of Mandela's African National Congress.

Low productivity runs through South African industry, where apartheid protected white workers whatever their abilities and sapped black workers' motivation. The problem is acute in labor-intensive gold mining.

PIDGIN LANGUAGE. The 1913 law that dispossessed landowning blacks was designed in part to force them off farms and below ground. Migrants, their ranks expanded by recruitment in neighboring Mozambique and Lesotho, headed to the mine compounds, where men lived--and still live--in concrete barracks, a dozen or more to a room. Many visit their wives and children, left behind in rural villages, only once a year.

By law, skilled jobs were reserved for whites who lived with their families in proper houses. The law changed in 1987 but not the practice. Semiskilled miners, the majority of them illiterate, earn an average of $370 monthly, while the jobs traditionally held by whites pay $1,500. "We didn't make use of these guys," says Dave Kent, a white section manager at Elandsrand. Companies failed to train or educate black employees.

In most gold mines, racial tensions simmer in the shafts, often becoming flash points for disruptive actions such as sit-down strikes. Blacks resent being spoken to in Fanakalo, a pidgin language made up so whites could issue orders to workers who spoke different tribal languages, and they are humiliated by the so-called pickaninny system, a slur for the black assigned to carry a white miner's lunch. Today, for example, blacks no longer tolerate whites going first in the line for the shaft elevator. "Archaic arrangements need to be done away with, and then the industry has a chance," says NUM General Secretary Kgalema Motlanthe.

Blacks know they'll have to make concessions, too, since 54% of the mines' cost is labor. The NUM has agreed to consider more flexible contracts and seven-day-a-week operations. As it stands, mines close on Sundays and every other Saturday, mainly an old nod to white Christian miners, and on 12 public holidays, up from five after the Mandela government added dates that are important to blacks. When annual negotiations begin in May, the mining houses will push for a profit-linked pay package. For their part, the unions want retraining "because whether we like it or not, workers are eventually going to be retrenched," Motlanthe says.

Despite working conditions that outsiders might consider barbarous, Elandsrand is a showpiece for mining's new ways. The job hierarchy has been flattened. Workers who once were assigned a single task now train to do all the rock-face jobs, a process called multitasking. Teams of workers jointly plan each day's attack. Blacks are getting adult education and the blasting certificates that make them "miners." Still, for blacks to move up, whites will have to move out, and it's not clear how black promotions can be accommodated with the whites in place. That, says Isaac Mthenjane, the black shift boss of the mine section I visited, "is a topic so sensitive you hardly speak of it."

Since the changes started 18 months ago, productivity at Elandsrand has outpaced the industry average, and costs are stabilizing. Some blacks now make twice their wages in bonuses, and workers who had not been assigned to teams staged successful strikes so they could join them. Blacks now have hope for advancement. Soweto-born, university-educated Mthenjane, whose job requires him to oversee both black and white miners, ticks off his goals: "...section manager, mine manager."

SUNDAY WORK. Still, there is resistance to change underground. To Letuka Khiba, a Freegold mine worker from Lesotho, new talk about teams and training rings false. "Multitasking" sounds a lot like doing somebody else's work for no more pay, he says, and productivity bonuses, he fears, could mean safety will suffer, no small matter after 41 gold miners died nationwide in January alone.

"Both sides were locked in a blame psychosis," says Anglo's gold division spokesman James Duncan. But these days, Freegold's managers and unions are closeted in "forums," a consensus-building concept unheard of a few years ago but now entrenched in the new Labor Relations Act. The union has agreed to temporary Sunday work at Freegold, and the ultimatum to turn around the mine may spur permanent change. "What I want is that whatever stopgap measures we work out at Freegold are a start for overhauling the industry as a whole," says the union's Motlanthe. That could lead South African gold mining out of the depths.

The innovations at Elandsrand and the crisis at Freegold are being watched not only by other mines but also by the country as a whole. Gold mining produces a quarter of South Africa's foreign exchange and provides huge employment in a country with a 40% jobless rate. Elandsrand's workforce is down to 8,107, from 9,695 in 1994, and a further 30% cut is planned through attrition. Those who remain will be better paid and trained, says Robbie Lazare, Elandsrand's human-resources manager. "It is all about giving people the skills to man this new organization." Adds Duncan: "South African gold mining is South African society in microcosm." How it changes will be a mirror for the country.By DRUSILLA MENAKERReturn to top