A senseless undermining. July 2009.
IF ROADS measure a nation’s respect for the industries that make it wealthy, then it is no wonder mining’s contribution to the economy has slumped below that of agriculture – even though gold prices are close to record highs at just under $1 000 (R7 800) an ounce. The roads to the mealie lands and goldfields are narrow patchworks. The one major income earner for an economy that will record no growth this year, that shed 178 000 jobs in the first quarter, will lose at least 300 000 more before the year ends, and which, according to Finance Minister Pravin Gordhan, will see a R50-billion to R60bn shortfall in tax revenue, is being systematically whipped by mine inspectors who are putting work standards before jobs and income. Critics say section 54 of the Mine Health and Safety Act is being overused, with entire mines being closed not just because of fatalities, but for substandard work in a single shaft. Mine closures lead to the loss of tens of millions of rands in production for the mine and steep losses in worker earnings for safety and production bonuses. By contrast, section 55 of the act, which allows for mine inspectors to warn mine bosses to rectify problems (and if they don’t, section 54 can be implemented as punishment) is rarely used. Repeated attempts were made, without success, to get comment from Bheki Khumalo or Jeremy Michaels from the Department of Minerals and Energy. AngloGold Ashanti spokesman Alan Fine, however, was firm in his insistence that safety was paramount. Goldfields echoed this. Sentiments toward safety and work excellence are noble, but in an economy that is on the skids, where jobs are being lost, mines closing and poverty deepening, and at a time where gold could be a major job creator and tax contributor is the department killing the golden goose? Outside Potchefstroom, a vast shantytown has emerged of those who have lost jobs on mines and farms. In Klerksdorp, debt counsellors say they can’t keep up with the demand from people who have seen salaries drop from R35 000 a month to R4 200 from unemployment insurance as mines like those owned by Pamodzi remain firmly shut. Gideon Nieuwoudt, who heads the offices of the debt counselling organisation, Consumer Assist in Klerksdorp, says: “People are confused and depressed, the mines that are in trouble keep making promises, but few are realised. “Some people have received UIF, so we can help them with debt counselling, but if they have no income we cannot assist. Repetitive closures at mines by inspectors also have an impact on earnings.” A drive by radio station OFM that brought in well over R1m in donations is keeping some people in mining towns fed through food parcels, but soon that money will run out. The mining closures in terms of section 54 are extensive. Few mining companies have been spared them, always following fatal accidents and often for breaches picked up during inspections. Mining closures see income being whittled away and poverty has been increasing among the employed. In Fochville near Carletonville, a miner and his wife have been recuperating. Mine closures reduced the miner’s income, so he and his wife waited before seeking medical help for abdominal pains. This year the wife had a hysterectomy for ovarian cancer and he spent a month in intensive care after surgery for colon cancer. Gold contributed 23 percent to the health of the economy in 2005, with exports of R101 906m, according to Mosa Mabuza at the Department of Minerals and Energy. In 2007, gold mining contributed 7.7 percent to GDP. But in the first quarter of this year, mining revenue dropped R9bn or 12.8 percent to R21bn in March. Gold contributed about R5bn of this, StatsSA noted. In 1985, gold’s heyday, when earnings and the metal’s contribution to the economy were high, employment was at more than 850 000 workers. By 2005 it was down to 443 000 employees, now it is battling to stay above 300 000. By contrast, last year employment in tourism grew by 10 percent to 946 000 employees, according to SA Tourism. The positive spin-offs of the R750bn infrastructural spend to impress tourists coming to the 2010 World Cup do not benefit the communities that made South Africa wealthy. Tourism is the new gold: it’s contribution to GDP was R162.9bn in 2007 or 8.1 percent. Last year it was R194.5bn or 8.5 percent. Tourism is notoriously fickle, it is price- and distance-sensitive, responds to fashion, and retreats when there is civil instability or visitors fall prey to crime. This week it has been announced that 3 300 more jobs will be lost when Harmony Gold takes over Pamodzi Gold’s President Steyn mine in Welkom. At the Pamodzi Gold sites in Klerksdorp this week, people sat in the sun or lazily cycled down streets. Nieuwoudt said most clients were from the Pamodzi operations, but some were from the uranium mine at Hartebeesfontein that closed at the end of last year. “These are mining people, the husbands work, the wives have usually never worked. If the husband loses his income they have nothing.” The average ages of those seeking debt counselling is 45 to 60. Niewoudt says the situation has “an influence on buying power, especially small retailers and contractors”. Despite the gloom at some mines, there is a revolution in attitude that could help inform President Jacob Zuma’s goals of creating jobs for 500 000 people before year’s end. Kopanang mine near Klerksdorp has 5 500 workers. Led by Shaun Newberry, the general manager, the mine is developing training methods and worker participation that would leave corporate South Africa breathless. The 2km-deep goldmine is seeing consistent gains in safety and production. Not all is perfect, the mine having had one fatality this year. Nonetheless Kopanang, like all AngloGold Ashanti mines, has implemented policy in recent years ensuring crews each have a safety rep and, underground, any worker or team can withdraw from a workplace if unhappy about safety conditions. Mine training manager Andre Oberholzer says a stoppage can last “five minutes, an hour or a day, but it prevents injuries, and the costs accidents cause”. A senior independent mining geologist who consults internationally says: “Closing mines for several days raises costs – infrastructure has to be maintained and wages are paid while no revenue is forthcoming. It is fair if operations in the area of a serious accident are stopped while the causes are investigated, but not the entire operation. “Other parts of the world don’t mine as deeply and are safer because the ore bodies allow them to use mechanised mining and foreign workforces are better educated. The Brazilians have an excellent safety record and don’t earn much more than National Union of Mineworkers members, but they are literate and have a risk-averse culture.” Oberholzer responds: “Ninety-six percent of accidents are human error, only 4 percent are geological. We can control accidents with the right mindset. Achieving that is management’s responsibility. Last year the GM challenged us to achieve 15 white flag (accident free) days a month – we achieved five or six months with 15 or more white flag days. Last year we improved safety 25 percent, this year we will improve that record by 20 percent.” The top 15 percent earners among miners through production bonuses, Oberholzer says, are those with the best safety records – “there is a direct correlation between safety and earnings”. Newberry says, “One fatality is one too many.” Kopanang is using technology to improve skills and safety. Five years ago it began using touchscreen training. Oberholzer, who introduced the Edutouch system, says, “initially I wanted something in place to assess all our workers fast”. “Edutouch sends each worker’s grades immediately he or she has completed a module, allowing management to assess shortfalls with individuals and in teams.” This is critical because everyone who works on a mine has to receive retraining after even brief vacations. “In the past, AngloGold Ashanti Training and Development Services would do one-on-one questions, but with medical exams and retraining, it could take six days before a worker was back on the job. “Using Edutouch, it takes three days, with 80 percent pass rates and far better knowledge retention than in the past. Before, if a facilitator stood in front of a class and did training, we did not know how much individuals remembered.” Cornelius Tsotsotso, 46, a miner since 1987, says, “I can understand better if I do it myself.” In a group training session led by Alex Phakasi, 32, a former rock engineering assistant, three men are discussing whether the answer to their question is: a bobbejaan spanner or a T-spanner? One mimes the actions of each on a bolt. They slowly consider and hit the handheld electronic buttons similar to those used on television game shows. They can’t move on to the next question until a row of green lights shows that each has answered. Phakasi said the discussions help improve knowledge and engender leadership skills and peer competition among the miners. It has cut costs dramatically – Kopanang now has six facilitators instead of the 17 employed a few years ago, and the facilitators have learned new skills. Gerrie Swanepoel, who has been a miner since 1974 and a trainer since 1995, is particularly respectful of old miners. Before writing training programmes he assesses data in manuals and policy documents, then consults the old miners, many of whom are not literate, “but they have valuable experience”. “Technology is developing so fast we can’t just rely on books or policies, we have to consider experience too.”