East Rand Proprietary Mines is in danger of becoming the first South African mine to be buried by this year’s collapse in the gold price, writes Mungo Soggot
For more than a century, Johannesburg’s deepest mine has been home to two communities locked in distrust – a distrust they seem destined to share until the death.
Above ground, mine executives are glumly bracing themselves for a shut-down order any day. More than two kilometres underground, miners toil at the rock face, dismissing it all as just another ploy to underpay them.
East Rand Proprietary Mines (ERPM), which has been operating in various guises since 1893, has been wiped out by the latest gold price crisis; its creditors are piling up, and all that can save ERPM and its 5 000 staff is a cash lifeline from the government.
In a mine where not so long ago white managers were serviced by what they called “piccaninnies” – black children who intercepted their excrement with shovels as they crouched to relieve themselves underground – such mistrust on the part of miners is unsurprising. But it also makes the underground tunnels something of a fool’s paradise.
As they rattle around the mine’s graceful but dilapidated headquarters – built by Sir Herbert Baker at the turn of the century – some executives say the mine can pay for only a week’s more wages.
They have explained the situation in circulars and regular meetings. But the more perceptive among them know that many miners neither believe nor understand them.
“They [the miners] think we are talking shit. They think it is just an excuse because it is time for wage negotiations,” one senior staffer said last weekend.
Lucky Madume, a National Union of Mineworkers (NUM) shaft steward, confirmed many miners did not understand the reasons for the warnings.
The miners’ world at ERPM also holds more immediate dangers, such as the small rock burst last Saturday morning which resulted in the relatively minor injuries of one concussion and one damaged hand. ERPM staffers say that for some time Anglo American has employed sophisticated warning mechanisms for rock bursts at its deep level mines – a luxury ERPM cannot afford.
As for the managers, the tunnels strangely seem to now serve as an escape from their troubles above. “Hello cruel world, we’re back again,” said Peter Allen, the human resources manager, as large drops of icy water fell into the shaft lift, signalling its arrival at the surface and the end of a trip underground last weekend.
The water was from one of the world’s largest ice plants, the heart of an air cooling system that makes it possible to work at depths of almost three kilometres. Also in the lift were the injured miners who had had to walk about a kilometre to the shaft from where they had encountered the rock burst.
Allen, who has been with ERPM for 28 years, is not optimistic the government will come to the mine’s rescue. “I stand to lose my house, my car and my medical aid,” he had said earlier in the week. “It is traumatic. The last two months have been very stressful. We have no cash flow. We are down to the bone. There is no money for retrenchments. The workforce has been told that.”
Underground, however, it had been business as usual – despite the rock burst, the darkness and the heat, a soothing alternative to what awaited him back at the office.
The chief safety officer, Peter Smart, had been as vigilant as ever. He had gently ticked off a senior miner for leaving a carriage bearing explosives attached to a small, battery-powered locomotive. The train carries gold-bearing reef and waste rock along the tunnel linking the mine’s Far East shaft and the “stopes” where the actual digging takes place.
It is not the first time ERPM has faced closure. Since the mid-1980s the mine has suffered several financial crises which have cut its workforce to its current 5 000 – a fraction of the 28 000 miners who worked the mine in the 1960s.
In 1997, ERPM was saved by a government subsidy, ostensibly granted to cover the costs incurred pumping out water from neighbouring mines. As one of the deepest mines on the Witwatersrand, it collects water from a string of other mines. The monthly subsidy is supposed to be calculated according to costs and the gold price, but has nevertheless steadily decreased.
ERPM managed to persuade the government to come on board because of the impact its closure would have on the economy of Boksburg, where several companies depend on it. The mine is now asking for arrears in the subsidy – the balance between the monthly payments it has sought and those it has received.
ERPM’s managing director, Ivan Vidulich, says the mine’s survival hinges on the extra payment from government.
While Vidulich and his colleagues await the government’s decision on the subsidy, a team from the Gold Crisis Committee, which visited the mine this week, will also assess its case for other life-saving restructuring plans. One possibility is to close down the relatively comfortable hostel at the mine’s newest shaft, and to move all its residents to the nastier Cinderella Hostel.
The Gold Crisis Committee was set up last year by business, labour and government. Last week, two of its top emissaries were in Washington, trying to lobby against the International Monetary Fund’s (IMF)proposed sale of gold to fund debt relief.
They said the industry stood to lose 100 000 jobs in Southern Africa alone, following the $30 collapse of the gold price caused by the Bank of England’s announcement it would sell off some of its gold reserves. The fear is that the IMF sale could trigger another drop in the bullion price.
Ironically, one of the first countries that would benefit from the IMF’s debt write-off proposal is Mozambique, the source of more than half the labour at ERPM. “We are crying because the mine is going to close,” senior Mozambican miner, Luis Mdaka, said last week.
Vidulich has meanwhile been working round the clock to keep the mine alive. His colleagues marvel at his resolve and his jocular insistence that the price squeeze remains just “a challenge”. They say Vidulich still goes underground two or three times a week, recently putting in a six-hour drilling shift himself. He has slashed the mine’s costs – “I don’t wear a belt anymore” – but they nevertheless remain too high for the mine to survive at the current gold price.
According to Eric Dingani, an industrial relations assistant, about 20% of ERPM’s workers have been employed on the mine for more than 30 years. Like most other South African miners, each supports an average of eight people. “If the mine closes their lives are doomed,” Dingani said. “There is nothing else”.