"Gold, diamonds, platinum ... what is extracted from the soil brings misery not prosperity
We touch the products of African soil every day: aluminium and steel in our homes and cars, copper in our wires and coltan in our mobile phones. Not to mention gold and diamonds. Do we wonder where they came from? Or what sort of lives the miners lead who dug them or the people beneath whose land these minerals lay? If we did, we might feel a little uneasy.
Africa is a rich continent with a lot of poor people. Almost every mineral on the planet can be found there, often in rich veins. The discovery of these riches is one reason the European countries sliced up Africa and took it over at the end of the 19th century. Vast wealth has been created and fortunes made from mining but lives and landscapes have also been destroyed. Much of the wealth from Africa’s mineral resources flows out of the continent and its people do not benefit from it.
But Africans are waking up to the rip-off. Yesterday 44 people were buried at the Marikana platinum mine in South Africa; 34 of them were miners shot by police during a pay protest last week. Trouble at the mine had been brewing for some time. A report by the Bench Marks Foundation last year revealed that locals at the Marikana mine were “frustrated and angry with the mining company . . . levels of fatal incidents were unacceptable ... residential conditions under which Lonmin employees live are appalling”.
Lonmin, the London-based company that owns the mine, is the reconstituted Lonrho that was described in 1973 by Ted Heath, as “the unacceptable face of capitalism”. One of its current non-executive directors is Cyril Ramaphosa, the key negotiator for the Africa National Congress in the talks that led to the end of apartheid. Evidently not even his status and skills could create a deal that would have avoided these deaths.
Meanwhile in Congo last week 60 died when a shaft collapsed at a gold mine in the northeast. And in eastern Congo the war that has flared since 1994, renowned for its mass rapes and massacres, is fuelled by the excavation of gold, diamonds, tantalum and tungsten; gangs of workers are forced to dig by armies and armed bands.
Time and again mineral resources seem to bring conflict and misery rather than prosperity. Areas that have been mined out and abandoned are often the poorest places I have ever visited — eastern Sierra Leone, Namibia, parts of South Africa. Until recently secret deals were often struck between governments and mining and oil companies — sometimes deals with the president alone. The people of those countries were never told how much the minerals beneath their feet were worth and they never saw any benefit from them. Some of the worst examples have been the diamond conflicts that fuelled wars in Angola, Sierra Leone and Liberia.
Today it is common to hear the Chinese being blamed for raping Africa of its resources but according to one industry watcher the Chinese behave like any Western-owned company. They do what they are told to do by the host government. The only difference is that they will often barter rather than pay cash as Western companies do.
Transparency seems to be the key — making public what governments receive from mining companies so that people can see what their governments receive, and what the companies say they give them; and check that these match. They can then have a say in how it is spent. Here the news is not all bad. This week the US Securities and Exchange Commission has made two rulings.
First it said that US-registered companies must be aware of where their minerals come from and not buy anything from conflict zones. It has also ruled that oil companies must report annually on payments to governments so that the people know what their government is getting from their oil.
And this week the International Development Select Committee in Britain drew attention to the issue when it pointed out that aid-dependent countries may lose about $160 billion a year through multinational companies — many of them mining companies — not paying tax by registering offshore and not disclosing the source of their profits. The committee will now look into capital flight from poor countries, estimated by the think-tank Global Financial Integrity at $854 billion between 1970 to 2008, mainly through companies mispricing imports and exports.
Disclosing these numbers in detail could put a simple but powerful tool in the hands of poor societies who happen to live on some of the most valuable real estate on the planet."
Richard Dowden is Director of the Royal African Society and author of Africa: Altered States, Ordinary Miracles