New social contract due: Mining’s harms are mainly to the environment – water, air, and soil, for example – but these have consequences for mining affected communities’ health and their land. Photo: Delwyn Verasamy
Mining is still central to the South African economy. It employs roughly 480 000 people directly. With an estimated dependency ratio of 10 to one, the industry essentially supports close to five million people. That’s a twelfth of the country’s population.
Demand for minerals and metals is not slowing down. But our gold mining sector will close down at some stage — even current high gold prices cannot sustain going deeper because of safety risks and the associated expense. There will come a point where marginal cost exceeds marginal benefit.
Outside of gold, South Africa should be a global mining powerhouse. For the past 20 years, however, there has been very little exploration or production expansion investment.
In partnership with Mining Dialogues 360°, Good Governance Africa set out to explore what it would take to revive the mining industry and ensure that it becomes the catalyst for broad-based development. It became clear that the country needs a new vision for mining that will reconcile conflicting interests that seem to perennially be at loggerheads with each other.
Any new vision needs to begin with the end in mind; what do we want mining to do for the country? We can all wax lyrical about that, but there’s an obstacle that must be dealt with first. Mining has an awful history in South Africa of imposing severe negative externalities onto both society and the environment. These are the divergences between private returns and social costs. In other words, companies mine and sell gold, reporting profits in the process, but they pollute rivers, create sinkholes, precipitate acid mine drainage, exploit labour and damage the social fabric of society in the process.
None of these ecological and social costs are recorded in company financial statements. This speaks to a broader global problem, but it’s particularly acute in mining, especially here at home.
It’s often mine-adjacent communities that bear the brunt of this malaise. In South Africa, migrant labour exacerbates the social costs on two fronts. First, many workers who migrate to the mines end up supporting two families; HIV proliferation has been extensive as a result. Second, many workers end up retiring to the former homelands and dying soon thereafter of silicosis or some other mining-related illness. The social costs of mining are clearly immeasurable and significant.
At our most recent dialogue, civil society representatives expressed the view that the industry seems to be geared towards short-term production targets and immediate profitability at the expense of long-term (ecologically sound) thinking and optimal wealth generation for all stakeholders. Strategies to attain consensus — and then execute on — a new vision need to be informed by meaningful discussions, not mere consultation as some kind of box-ticking exercise.
Moreover, free, prior and informed consent should be continually sought, underwritten by an acknowledgement that “no” to mining is also a legitimate response from mine-affected or potentially affected communities. They are often left without solutions to the problems created by mining, and this needs to be addressed through purposeful discussions, not cursory consultations that amount to people being told what is going to happen to them.
Many of the harms mining causes are environmental. Regulations exist to prevent such harm, but enforcement is inconsistent. Even when the legal framework is strong, communities often lack the knowledge and tools to hold companies accountable. This asymmetry fosters moral hazard: companies externalise harm while reporting profit. Bridging these gaps requires education, in local languages, to empower rights-based action.
Beyond legal compliance, mining companies frequently bypass meaningful engagement. Social and labour plans (SLPs), meant to channel mining benefits into development, are often drawn up with minimal community involvement. The process is top-down, consultative in name only, and poorly documented. The SLPs are frequently geographically misaligned, excluding communities downstream of operations who still suffer the effects of pollution. They also rarely prepare labour for life after mining. The result is development that is poorly targeted, unaccountable and unsustainable.
Some companies worsen these dynamics by co-opting local activists or working through pliant intermediaries, fuelling internal divisions. This divide-and-rule approach minimises risk for companies but leaves communities fragmented and disempowered. The SLPs then become tools of corporate image management rather than genuine vehicles for transformation. Often, they fund short-lived projects that decline and often collapse once the mine closes, unlinked to local integrated development plans (IDPs). Even where integration is attempted, weak municipal IDPs render it ineffective.
Greenwashing is common. Companies promote their environmental, social and governance credentials, but scrutiny reveals minimal ecological remediation, long-term plans for restoration and socio-economic upliftment. Executives typically stay removed from community realities, unwilling to talk to residents and local authorities. This maintains a status quo in which firms pursue reputational insulation over authentic partnership. For communities, this entrenches an adversarial stance. Trust is absent where engagement is asymmetric.
In the absence of viable livelihood alternatives, some residents resort to informal mining. Labelling them “illegal” dehumanises people who are often driven by survival or coerced into impossible positions by organised crime bosses. The official response, including recent commentary after the Stilfontein disaster, has lacked empathy and insight. It’s no surprise that resentment festers where people are treated as expendable. A political culture defined by patronage and corruption fails to meet the complexity of this problem.
Land dispossession remains largely unresolved. Many mine-affected communities still have no title deeds, decades after democracy. That dispossession underpins the call for resource nationalism, especially among the young and disillusioned. There are strong veins of resentment here into which unscrupulous politicians can tap. While social grants may suppress open rebellion — some dialogue members mused whether welfare hadn’t placated revolution — frustration simmers. Without structural change based on policy reform, the call for redress will grow louder.
Efforts to build unified community responses face further obstacles. Activists expressed disillusionment with NGOs that impose external agendas. Some community gatekeepers, meanwhile, have been accused of colluding with mining firms or of blocking access to resources. Mining companies often work with whoever shouts the loudest, further muddying accountability. These dynamics prevent the emergence of a coherent response voice. Communities are not homogeneous, nor should we expect them to be, but this should not hinder the expression of a heterogeneous set of voices.
The solution requires recognising that power is layered. Without coordination and organisation, communities remain vulnerable to fragmentation, as they struggle to build countervailing power. Yet unity is hard to achieve when trust is scarce and gatekeepers act in their own interest. Still, any serious vision for the sector must support such coordination as the basis for accountability and equitable negotiation.
Two distinct imperatives shape mining’s future. On one highway, government and industry seek investment-friendly conditions. On the other, communities seek restitution and opportunity. These paths need not be in conflict, but reconciliation demands a vision centred on shared prosperity. Capital must not be prioritised over labour and land. Community benefit must become a measure of mining’s success.
That shift requires credible, trackable metrics. One proposal is a national indicator for “community well-being”, with mining firms accountable for positive movement in that measure. This would reframe profitability to include social return, not just shareholder value. Others suggest revenue-sharing mechanisms such as Australia’s “royalties for regions” scheme. But concerns about corruption, especially in community trusts, remain valid. Without institutional reform, even well-designed systems can be subverted.
A new social contract is overdue. Mining cannot continue to operate in enclaves of profit surrounded by poverty. It must embrace a model of co-determination with affected communities and acknowledge its historical legacy. That demands not just consultation but free, prior, informed and continued consent. It demands not just compliance, but transformation. Without these shifts, mining will remain a source of conflict instead of development.
Ross Harvey is the chief research officer at Good Governance Africa (GGA)-SARO. Mining Dialogues 360° and GGA are hosting a plenary dialogue for all mining industry stakeholders on 29 July. To attend, please email [email protected]