The David Gleason Column
Between 1903 and 1997, 55 877 South African miners died in mine accidents. Over the same 94-year period, 47 229 tons of gold were produced from South African mines, an accident rate which implies that for every 1,2 tons of gold produced, at least one man gave his life.
And over this period, the gold produced by this country was sold, almost invariably into Western markets or to Western governments or privately owned banks, easily the greatest majority of which was paid for at low prices.
Economic law and the implacable power of the market pay no attention, however, to such emotionally based statistics. If a man is prepared to risk his life in the pursuit of a wage, responds the market, that’s his lookout and his business. The market is not concerned with individual or family necessity; it operates on the basis of economic need and consequences.
And, let’s face it, it’s hard to argue with this kind of entirely unemotional, cold logic. But it does beg an examination of quite a different kind.
The ruling consensus nowadays is that the capitalist system, imperfect though it may be, is the best available; that wherever free enterprise holds sway its flourishing markets best allocate scarce resources; and that the logic of the price of a commodity is the product of its supply relative to the demand for it. Fine. What this does not take account of, however, is that over this same period, the price of gold was held in thrall by the selfsame governments of industrialised nations.
They took up South African gold at prices which, expensive though these might have appeared at the time, are trivial when put against the lives sacrificed in winning the ounces.
Between 1900 and 1931, the average price of gold was $17,09 an ounce; between 1932 and 1967 it averaged $33,12 and it didn’t break $100 until 1973.
And it is also possible to argue that the current price of gold probably bears little relation to the value which bullion should and would now command had it not been for government-led intervention over such a long period.
So it’s easy for market economists to embrace warmly the concept of free enterprise and unshackled trade now, while ignoring the manner in which the West accumulated its store of gold. Of course, you can be quite cold about this. You can truculently say, just as former United States president Calvin Coolidge did so famously when ignoring British pleas for accommodation in repaying the United Kingdom’s World War I debt: “They hired the money didn’t they?”
Of course, South Africa is also afflicted by another issue. Nowhere else was gold laid down by nature in such huge volume and in such comparative uniformity over such a vast area. That is a cornucopia of sorts.
Nowhere else, however, was it laid down at such depth and in geological circumstances which made it so difficult to extract. It is for this reason that South Africa rapidly became the leading exponent of deep-level, hard rock mining.
Not that that counts for much any longer. Who cares, when these days what matters supremely is the cheapness with which gold can be won. That invariably means shallow deposits (which can be mined by open cast methods), helped by the use of the latest, most innovative, metallurgical recovery systems.
So it is hardly surprising in these circumstances that South Africa should be aggrieved that, since the early Seventies, it has been convenient for the industrialised West to trade freely in gold after many decades of price control. The fact that this country’s mines are now found – technical brilliance aside – to have been managed consistently poorly over long periods is irrelevant.
The thesis is that Western nations bought South African gold at bargain basement prices and now trade in it – to their exclusive advantage (and that of their major investment banks).
Five years ago, the Johannesburg Stock Exchange’s gold board accommodated 46 listed producers. This is now down to 17 listed companies – soon to be reduced by the imminent disappearance of the government-supported East Rand Proprietary Mines (ERPM) which is now in voluntary liquidation.
Five years ago, the gold mines employed 391 000 people, so providing direct and indirect sustenance for a further 3,9- million. After the loss of another 5 000 jobs at ERPM and guessing arbitrarily at the latest employment statistics (the Chamber of Mines’s information is valid only up to 1997), gold mines’ employment has now fallen probably to no more than about 280 000. And that means – in a country which has steadily lost ground to the terrible menace of unemployment – that yet a further 1,1-million people have been cast, directly and indirectly, to the wolves.
I cannot foresee how all this will end other than that precious little relief appears to be in sight. For South African miners and their families, it seems there is no end to the pain they bear.