MAC: Mines and Communities

Is South African Black Empowerment A Mining Myth?

Published by MAC on 2004-09-08

Is South African Black Empowerment a Mining Myth?

"Black Economic Empowerment" (BEE) was introduced to South Africa last year by the ANC government, in order to enable "historically disadvantaged" black citizens to gain a stake in industries previously dominated by white-run companies. The first - and prime - target for BEE was the mining industry.

But has it actually served its purpose? Some critics - including Moeltsi Mbeki, brother of the president - believe that BEE is simply handing power to businessmen within the ANC, while leaving overall control with companies like Anglo American - which have used their ill-gotten historical gains to carve out a global presence. Others praise the strategy as helping - albeit in a small way - to redress the historical imbalance.

Last week, Anglo American's CEO, Tony Traher, defended his company's operations in an interview with the Financial Times. Mbeki was swift to repudiate some of Traher's claims. In any event, the reality is stark: currently, black people control less than 4% of shares on the Johannesburg Stock Exchange, while 90% of corporate senior management positions are still held by whites.

A recent deal between BEE company, Incwala, and UK-based Lonmin, was condemned by the country's National Union of Mineworkers as merely recycling debt rather than giving them a profitable stake in the company. Brian Gilbertson, former head of Gencor, plays a major role in both Incwala and Lonmin. He's also trying to get Russian mining companies, like SUAL, investing in the former apartheid state, raising the spectre of east European "oligarchs" brokering deals with South African "black tycoons".

Meanwhile, the intention of some black groups to sue former profiteers from apartheid for compensation, has inched one step further to a court hearing.

(See also the recent London Calling written on this subject]

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