The standoff between police and thousands of illegal miners at Stilfontein has drawn attention to some of the scale and horror of illegal gold mining.
Much coverage and controversy has focused on debates about policing the alleged criminals and the communities that support them versus protecting human rights, while on the sidelines that so many of the miners are foreign born has permissioned the usual xenophobia.
But these polarities don’t capture the nuances of a vast and complex crisis that is not just one of criminality. It is a socioeconomic, political and security crisis, and a global one.
The criminality itself is multilayered. It needs to be tackled from the top, as Sibanye-Stillwater CEO Neal Froneman puts it, at the level of the organised crime kingpins and syndicates and money launderers, not just at the bottom. Even at the bottom, those miners include both victims and perpetrators — of the violence, human trafficking and forced child labour that goes with illegal mining in SA.
But first, why gold? Unlike platinum, for example, gold doesn’t need sophisticated processing: it is easy to process and refine with old methods using mercury (or sometimes cyanide) — that also happen to be dangerous for human health and the environment.
Refined gold is also easy to transport, in small, high-value volumes and to smuggle or launder. All of which helps explain why gold is at the centre of what the World Gold Council politely calls “small-scale and artisanal” mining globally, accounting now for a fifth of global gold production across 80 countries, many of them in Africa.
The terminology is contested, and appropriately so. But this is clearly not artisanal such as Fair Trade coffee or chocolate. The sector has been taken over by high-level cross-border crime syndicates and exploited to fund everything from exotic lifestyles for politicians to civil wars and global terror, not to mention playing a key role in funding Russia’s invasion of Ukraine.
But crucially, it also plays a key role in providing income for millions of poor households in Africa and other developing regions. In SA the steep decline of formal large-scale gold mining — as ore reserves depleted and got deeper and more dangerous over the past few decades — helped provide the basis for the growth of the illegal industry, as did SA’s high levels of unemployment.
Many of the thousands of workers retrenched over the years, many of them skilled Mozambican or Lesotho miners, never left or found other jobs. Instead they got organised over time and went back to shafts that had been shut down and concreted over. And the communities around the mines assisted, whether willingly or under duress.
Mining those shafts is usually only possible using methods so dangerous there’s no way the highly regulated, health and safety obsessed formal mining industry could use them. It involves high levels of violence and human trafficking to recruit and keep workers underground, often for months at a time, as well as violence above the ground between warring syndicates or targeted community members.
Mining those shafts also necessarily involves bribery, corruption and complicity through multiple levels of government, from municipal to national, and through multiple arms of law enforcement from the police to the courts. It is probably no coincidence that the illegal mining sector has mushroomed from about 10-15 years ago as SA’s law enforcement institutions were eroded.
The large mining companies have been raising the alarm for years, and investing heavily in trying to secure their own mines and surrounding communities, as well as prevent their own employees from being bribed to collude with the illegal miners. But until about 18 months ago little effective action had been taken by the courts, the police or the minerals department. Over the years the illegal sector became entrenched, and its footprint extensive.
Here, as globally, the surge in the gold price to more than $2,600 over the past couple of years has no doubt incentivised even more entrants to the industry and attracted more working capital to blasting into those concreted shafts, providing the necessary equipment, doing the necessary bribing and facilitating the clandestine cross-border flows.
A 2020 Minerals Council fact sheet put the commercial value of SA’s illegal mining industry at R7bn a year, but it’s clearly far larger. The Raab report estimates more than 25 tonnes of gold worth more than $1bn (about R18bn) was smuggled out of SA in the latest year. The estimate for Africa as a whole is more than $30bn. That’s lost tax revenue and productive investment, quite apart from the damage to the environment and the social fabric, or that illicit gold enables vicious conflicts across the continent.
But it’s a hugely complex problem, with no single or simple solution. Globally, everyone from the World Bank to the Financial Action Task Force (FATF) to the UN to the World Gold Council is working on it, with high-level plans to collaborate on cross-border law enforcement and put preventive measures in place across the supply chain.
SA is not alone, even if it has its own particular complexities. The arrests of illegal miners may be important to signal that illegality cannot be condoned and to try to stop the industry from becoming even more entrenched. But just targeting the poor souls who come up from underground doesn’t differentiate perpetrators who might have been holding workers underground at gunpoint from victims. Nor does it get to the crime bosses who are ultimately in charge.
SA’s law enforcement authorities need far better intelligence and a more nuanced approach — one that doesn’t just use the fight against illegal mining to fuel xenophobia. And crucially, as Froneman said, they need to start at the top. He has highlighted the need to see across the different aspects of SA’s crime and corruption crisis and draw on the business-government partnership to help tackle these.
The syndicates in illegal mining are also in other forms of organised crime and extortion, as well as in smuggling and money laundering. SA needs to show it can tackle these if it wants to get off the FATF greylist.
More fundamentally, it needs to do so to restore the integrity of its own law enforcement authorities and public entities — as well as to rebuild the damaged social fabric of its mining communities and improve investor perceptions of the mining industry.
And, of course, faster economic growth and job creation would make the illegal mining crisis so much easier to address.
• Joffe is editor-at-large.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.