Victim of its own success? The platinum mining industry and the apartheid mineral property system in South Africa's political transition

Abstract

The South African platinum industry has grown phenomenally since the mid 1990s to become the single largest component of the national mining sector in employment and sales-value terms. In line with Fine's (1992) contribution to a general theory of mining, this article presents an initial political economy of that industry by considering the critical role that the apartheid mineral property system played in its dominant strategy of competitive accumulation in the years leading to the current platinum boom. Emphasis is placed on the different forms of minerals ownership that mediated the access of platinum capital to mineral resources in the Bophuthatswana and Lebowa Bantustans, where the bulk of South Africa's vast platinum reserves were geopolitically located under apartheid and how the reproduction of these strategic mineral property relations was secured during the political transition to the benefit of the white platinum corporations. It concludes that the industry's very success in maintaining its proprietary control over the world's largest platinum endowment would combine with an unprecedented surge in global platinum demand to simultaneously position it as the most dynamic element of the post-apartheid mining economy and as the primary target of the new ANC government's minerals reform policy.

[Victime de son propre succès? L'industrie minière de platine et le système apartheid de propriété minérale dans la transition politique en Afrique du Sud]. L'industrie du platine sud-africain a connu une croissance phénoménale depuis le milieu des années 1990 pour devenir la composante principale du secteur minier national en termes d'emploi et des ventes des valeurs actualisées. En ligne avec la contribution de Fine (1992) à une théorie générale de l'exploitation minière, cet article présente une économie politique initiale de cette industrie en considérant le rôle crucial que le système apartheid de propriété minérale a joué dans sa stratégie dominante d'accumulation compétitive dans les années qui avaient conduit à l'actuel boom économique de platine. L'accent est mis sur les différentes formes de propriétés minières qui ont servi de médiateur à l'accès du capital de platine pour les ressources minérales dans les bantoustans Bophuthatswana et Lebowa, les endroits géopolitiques de la majeure partie des vastes réserves de l'Afrique du Sud en platine sous l'apartheid, et comment la reproduction de ces rapports des propriétés minières stratégiques a été obtenues lors de la transition politique au profit des sociétés de platine caucasiennes. Il conclut que le succès même du secteur dans le maintien de son contrôle exclusif sur les rèserves mondiales de platine se combineraient avec une augmentation sans précédent de la demande mondiale de platine en le positionnant simultanément comme l'élément le plus dynamique de l'économie minière post apartheid et comme la cible principale du nouveau gouvernement de l'ANC en matière de politique de réforme minière.

Mots-clés: exploitations minières de platine droits miniers Afrique du Sud propriété foncière Boputhatswana Lebowa

Keywords:

• platinum mining
• mining rights
• South Africa
• landed property
• Bophuthatswana
• Lebowa

Acknowledgements

A longer version of this article was presented to the Historical Materialism and World Development Research Seminar in London in April 2007, where it significantly benefited from the collective input of Sam Ashman, Liam Campling, Kristian Laslett and Ben Selwyn. I am likewise grateful to Ben Fine for his comments on those parts that appeared in my PhD thesis, and to Liam Campling and two anonymous reviewers for their comments on earlier drafts of the current piece. Special thanks are due to Ray Bush and Janet Bujra for their tremendous encouragement in bringing it to publication, and to the Research Chair in Land Reform and Democracy for the provision of an institutional base at the University Cape Town. Naturally, all errors remain my own.

Notes

On average, 10 tons of ore must be mined to produce one ounce of platinum. Moreover, while platinum mining itself is relatively low cost, as shallow deposits are still generally available for exploitation, the platinum beneficiation process is far more challenging, not least because base metals first have to be recovered before the PGMs can be refined. Even then, the refining process itself involves a succession of complex and energy intensive procedures, which typically take six months to complete.

According to Cawood and Minnitt (1998, pp. 370–372) the principle of the severance of mineral from surface rights was first established in the British Cape Colony by the Craddock Proclamation of 1813 and later adopted in the Afrikaner Transvaal Republic by Law 1 of 1883, following the discovery of gold (1871). The principle was eventually formalised and generalised throughout the Union of South Africa – what would become the ‘homeland’ territories included – by the Deeds Registry Amendment Act No. 47 of 1937.

SADT land falling within the jurisdiction of the emergent homelands was transferred in terms of the Self-Governing Territories Act of 1971. Further SADT land was acquired for purposes of homeland ‘consolidation’. Any remaining SADT land in ‘white’ South Africa continued to be owned and administered by the SADT. When the SADT was disbanded in 1992, this was transferred to the then Minister of Regional and Land Affairs. Whichever the case, the pattern of state land ownership and administration was virtually identical in the homeland territories and South Africa.

The historic evolution and tensions of this particular corporate property form is discussed at length in chapters four to six of the author's PhD thesis (Capps 2010).

For an accessible account of the legal dimensions of this story, albeit told from the perspective of the Bafokeng chieftaincy and its lawyers, see Manson and Mbenga (2003); for a political economy, see chapter seven of Capps (2010).

The estimate of RPH's mineral holdings was given to the author in an interview with the Human Resource Manager of Impala, RPH's main rival (27 November 2001). The figure of 80% is supported by Vermaak (1995, p. 197), though we should note that it probably also includes the rights granted by the LMT on the eastern and northern Bushveld. Whatever the case, RPH was positioned as the undisputed leader of the South African platinum industry by virtue of this vast resource base.

In the horse-trading that followed the 1994 elections, the ANC assented to the installation of the former Foreign Affairs Minister, Pik Botha, as the new Minister of Minerals and Energy Affairs in the Government of National Unity (GNU) to reassure monopoly capital that minerals and mining reform would be a ‘no go area’ in the early years of the new dispensation (Ben Fine, pers. comm. 3 June 2003; on this point, see also Cawood and Minnitt 1998, p. 374). When the National Party quit the GNU in 1996, Botha was replaced by the ANC's Penuell Maduna, but even then, observes Patrick Bond (2000, p. 221), the new incumbent's tenure was most notable for its ‘failure to transform power relations in the mining and energy industries’. The ANC's Minerals and Mining Policy for South Africa White Paper was eventually published in October 1998, and is discussed further below.

This was initially in terms of Proclamation No. 60 of 1995, and further defined by the 1997 Interim Procedures Governing Land Development Decisions which require the Consent of the Minister of Land Affairs as the Nominal Owner of the Land.

JCI Ltd was bought on credit by a ‘black empowerment’ consortium led by ex-Robben Islander, Mzi Khumalo, while Johnnic was purchased by Cyril Ramaphosa's National Empowerment Consortium. Anglo American's move was thus emblematic of the wider ‘unbundling’ strategy of combining economic rationalisation with canny political positioning. It is salutary to note that both ‘empowerment companies’ ran into major difficulties after the sales.

Impala Platinum Holdings (Implats), Amplats' main domestic rival, would later follow suit when it was finally ‘unbundled’ from its parent company Gencor (itself wound down in 2003) and globally repositioned through a London listing.

The upturn in autocatalyst demand was the direct result of the accelerating global spread of ever-tighter vehicle emission controls, which were first introduced in North America (and subsequently Europe) in the 1970s (Chunnett 2006, p. 6). Because the platinum metals are a key and non-substitutable element in both petrol and diesel autocatalyst systems, as well as in future ‘fuel cell’ technologies, demand had become inextricably linked with the successive growth and technological development of the global ‘clean car’ market by the mid 1990s. At the same time, China's rapid emergence as a leading centre of the ‘white metal’ jewellery industry would see its platinum imports rocket from virtually zero in 1995 to over one million ounces per annum by 2000 (Graulich 2001c). By 2007, autocatalysts and jewellery would account for 54% and 20% of global platinum demand, respectively (Genc 2008, p. 401).

These graphs were prepared by the author in 2003 from sales, production and employment statistics published by the Department of Minerals and Energy and South African Chamber of Mines.