Mining In South Africa

An immense amount of gold deposits were discovered in South Africa during the 1800s, and has been the main source of growth ever since. Gold mining has attracted foreign investments and led to the development of transportation and manufacturing facilities in South Africa. Many of the workers come from the neighboring countries. “South Africa supplies about a sixth of the gold mined in the world every year” (world Encyclopedia). South Africa’s mining industries has propelled the development of the country. In 2009 South Africa was the fourth largest diamond industry in the world. Gold mining has become one the main factors to the growth of South Africa. Mining grew with discovery of diamonds and increased with the discovery of Gold. Mining has impacted the country of South Africa making it number 2 in foreign exchange earner in the world.

Mining has been the main force behind the development of Africa’s most advanced and richest economy. Large scale profitable mining began with the discovery of a diamond. Diamond and gold discoveries played an important part in the growth of the South African Republic. In 1868 the republic attempted the annex the areas near newly discovered diamond fields. The Gold Rush caused thousands of foreigners to flock to the region. The political tensions contributed to the Second Boer War in 1899. Ownership became concentrated to few entrepreneurs, most of European origin, known as the Randlords. Gold mining contributed to the tripling of the economic value which was known as the Union of South Africa.

A turning point in South Africa history was the discovery of gold. Gold was found on the Witwatersrand in 1886. Africa went from an agricultural society to the largest gold-producer in the world. Trade began to increase with this discovery. “For Europe and the United States, gold was of value because the currencies were supported by gold. This is known as the Gold Standard” (“Glitter of Gold”.) Prices of gold were fixed under the gold standard. Prices were kept low in order to benefit nations in Europe and the United States. In 1886 gold was found on Langlaagte, a Transvaal farm. The gold ran for miles underground. Gold changed Transvaal. Before 1886 it was a poor and struggling Boer republic. Ten years later it was the richest gold mining area in the world.

The discovery of diamonds began in 1867. The First diamond to be discovered in South Africa is known as the Eureka Diamond. It weighed 21.25 carats and was found near Hopetown on the Orange River. It was discovered by Erasmus Jacobs, a 15 year old boy. The Eureka was put on display at the 1867 Paris Exhibition. In 1967, De Beers purchased it and donated it to the South African’s. The Diamond is currently on display in the Kimberly Mine Museum.

South Africa’s reserves remain some of the worlds’ most valuable. It’s estimated worth is $2.5 trillion. Country is estimated to have the fifth largest mining sector in terms of GDP value. “It has the world’s largest reserves of manganese and platinum group metals, according to the US Geological Survey, and among the largest reserves of gold, diamonds, chromite ore and vanadium” (Kearney). The sector is an important for foreign exchange earner. Gold accounts for more than one-third of exports.

The City of Johannesburg had developed through the mining industry. During early years it was tied to the fortunes of the mining industry. During this time gold mining propelled the growth of South Africa’s nation economy into self-sustained development. It created an integrated labor market across southern Africa. It played an important role in changing the racial oligarchy that dominated South Africa till the fall of apartheid in the 1990s. Gold eventually declined, but the growth of Johannesburg continued and the urban economy became diversified and flexible. Mining played important role in the development of the manufacturing sector and also in the emergence of financial services.

The South African platinum industry has increased enormously since the mid-1990s to become the largest factor of the national mining sector. Most of South Africa’s platinum reserves were geopolitically located under apartheid. The reproductions of these mineral property relations were secured in order to benefit the white platinum corporations.

There were some problems with mining in the beginning. Silica dust is an ever-present hazard so all drilling dust and loose rock had to be wetted down all the time to prevent silicosis, a deadly disease that attacks the lungs. Another problem is heat. In deeper mines refrigeration of the intake air is often necessary to keep conditions manageable. South African mining industry is frequently censured for its poor safety record and high fatalities but the conditions are improving.

August 12, 1946 African miners of the Witwatersrand went on strike for higher wages for 10 shillings a day. The strike continued for a week facing savage police terror, in which 1,248 workers were wounded and nine were killed. The miners’ strike had profound repercussions which are felt today. The intense persecution of workers’ organizations has not ceased. The most profound result was the shift from a policy of concession to more dynamic and militant forms of struggle.

The relative contribution of mining to South Africa’s gross domestic product has declined over the past 10 to 20 years. The industry is continuously adapting to changes to local and international world conditions. It remains a cornerstone to economic activity, job creation and foreign exchange earnings. Mining is critical to South Africa’s socio-economic development. The sector accounts for one-third of the market capitalism, and acts as a magnet for foreign investment in the country. According to the Chamber of Mines mining creates one million jobs, accounts for 18% of GDP, Accounts for 20% of investment, and Accounts for 13.2% of corporate tax receipts.

In 2011, South Africa’s mining industry was the largest contributor of the economic transformation. Mining industry had broad-based black economic empowerment (BBBEE) deals worth R150-billion. BBBEE targets apply to all companies in South Africa. This means a certain amount of local assets have to be sold to black South Africans. “Black ownership of the mining sector was at 8.9% in 2009, which is below the target of 15% by 2007. The government is putting immense pressure on the mines to reach the next target of 26% by 2014” (Kearney).

“August 2012, President Jacob Zuma told a meeting of diplomats that South Africa rejected the proposal of a blanket nationalization of mines, and would focus on proposals that sought to ensure the country benefited more form mining without interrupting the sector” (Kearney). To help propel the development programs state involvement could take part ownership or full ownership of the mines for selected minerals. There is an proposal for tax on windfall profits on mining. “Zuma said this would help regulate economic growth and employment creation” (Kearney).

Diamonds were discovered in Canteen Koppie in 1869. Canteen Koppie became the first alluvial diamond diggings in South Africa. In 1948 Canteen Koppie became a national monument. The mining industry in South Africa is a larger factor of the economic growth of South Africa. Gold mining in South Africa has made the country the largest gold producer in the world. The mining of mineral in South Africa increased trade for the country to other nations.