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Mon Jun 27 07:52:08 SAST 2016

Local anger is rising against South Africa’s ‘resource curse’

Patrick Bond | 27 March, 2016 14:45
Xolobeni on the Wild Coast where an Australian mining company is attempting to get rights to mine the dunes, 7 May 2015.
Image by: Rogan Ward

South African society’s conflict with a mainstay of the country’s corporate economy – resource extraction – is permanently on display in the platinum, gold and coalfields in the north and north-east of the country.

Now communities on the country’s East Coast are confronting mining houses. This is the area that supplied Zulu and Xhosa workers to the mines. And now the mines are coming home.

The latest incident, which claimed the life of a leading anti-mining activist, comes as poorer South Africans feel the effects of soaring food, transport and electricity prices. The misery and anger is compounded by the fact that the government has been shrinking state welfare grants – not in nominal terms, but after adjustment for the cost of living.

Growing impatience with economic conditions has resulted in protests across the country reaching new levels of intensity. Violence against activists also appears to be intensifying.

Resistance is rising

On March 22 Sikhosiphi “Bazooka” Rhadebe, a grassroots critic of a proposed Australian dune-mining project on the Eastern Cape’s Wild Coast, was shot at his home by assailants posing as police officers. The attack has shaken communities and environmentalists. A few weeks before his death, the Amadiba Crisis Committee, a local activist group, rejected an environmental impact assessment by titanium-hungry Mineral Commodities Limited, a Perth-based mining firm. The company has previously run into conflict with communities in Sierra Leone and Namaqualand.

The death of Rhadebe follows other acts of intimidation and violence. The week before, a few hours’ drive up the North Coast of KwaZulu-Natal, a lorry belonging to Bongani Pearcewas set alight at midnight. Pearce lives near Somkhele, a vast coal mine run by Johannesburg-based Petmin. The attack came hours after Pearce led a militant community march to the local council.

Like the organisation led by Rhadebe, Pearce’s Mpukunyoni Community Property Association represents dozens of local villages whose residents are angered by high levels of corruption and maladministration. They believe this is largely due to collusion between local political elites and mining companies, and that it is robbing their community of its livelihood.

Resistance is rising as quickly as the price of commodities crashes: coal from a $170/tonne peak in 2008 to $50; and titanium from $8.80/kg in 2011 to $3.80. Mining profitability now requires replacing the 2002-11 era’s rising prices with much higher throughput – greater quantity at much lower prices. With this, the metabolism of the conflict is quickening.

Mining is blasting new holes in the social fabric.

Protests are increasingly common in areas mainly populated by rural women, including the former KwaZulu homeland strips to the east and west of the Hluhluwe-iMfolozi game park, an area populated by a number of coal mining houses. Last week the Zululand Anthracite Colliery, until recently owned by RioTinto, suffered arson attacks by residents demanding jobs.

Reduced government spending

Setting aside ubiquitous corruption, government’s two major economic policy weaknesses are excessive fiscal stinginess for the poor, combined with intensified state investment in mining-supportive infrastructure.

After last month’s slow-motion-austerity budget was announced, 16.5 million poor people face cuts in the real value of grants by several percentage points. According to the Pietermaritzburg Agency for Community Social Action, the cost of a poor household’s minimalist monthly R1,650 food basket rose 9% from November 2015 to January 2016. Annualised, that is more than 25% or, as the organiser’s lead researcher Julie Smith notes, "eight times higher than the average monthly increases over the preceding year."

The 3.5% grant increase Finance Minister Pravin Gordhan gave foster-care children and 6.1% provided to other dependent children has already evaporated. In February consumer price inflation rose to 7%. This is before state-owned electricity utility Eskom applies its 9.4% price hike.

Steeper increases in electricity and transport, coupled with higher food prices, mean that women are increasingly limited in the diversity of food they put in their shopping trolleys.

Food, transport and electricity account for about 90% of expenditure for most low-income Pietermaritzburg households, says Smith. This makes a mockery of the consumer price index weighting of less than 50% of the total household basket for these items. Subsidies for other basic-needs items have also been cut, including for municipal services and housing.

Infrastructure spend on the rise

In contrast, Gordhan budgeted R292 billion from 2016-18 for new transport and logistics infrastructure. This includes the two leading presidential strategic projects:

  • state-owned transport company Transnet’s new coal rail line to Richards Bay, aiming to export 18 billion tonnes; and

  • its South Durban port-petrochemical expansion, aiming to increase container traffic from 2.5 million to 20 million annually by 2040.

Gordhan gained the praise of ratings agency Moody’s senior vice president Kristin Lindow, who supports budget cutting, except when it comes to "preserving growth-supporting capital spending."

Even setting aside their contribution to growth-sapping climate change, including KwaZulu-Natal’s current drought, do such mega-projects really qualify?

Durban residents have seen billions in taxpayer funds breed a stampeding white elephant herd. These include a World Cup soccer stadium, convention centre and the uShaka Point development – all requiring ongoing subsidisation. Add to this the new King Shaka airport and Dube Tradeport, which suffer massive overcapacity.

At a Sharpeville Day commemoration this week, South Durban activists vowed to block the port-petrochemical expansion. This follows recent protests against container trucks in the area.

If the state continues to squeeze poor people’s daily budget and pour subsidies into mega-projects serving mining and shipping capital, revolts like these in President Jacob Zuma’s main patronage province will well up with growing vigour.

Like Rhadebe’s Amadiba Crisis Committee and so many other infuriated east coast residents, Pearce and the Somkhele activists intimately understand why South Africa is “resource cursed”. And like others opposed to state capture by dubious corporations and families, these communities vow to keep fighting no matter the rising danger.

  • Patrick Bond, Professor of Political Economy, University of the Witwatersrand

-This article was first published at The Conversation

The Conversation

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