At the heart of our wealth and our woes, the ‘Minerals-Energy Complex’

by Patrick Bond
with Khadija Sharife, The Mercury, 19 July 2011

When Julius Malema proposes mining industry partial nationalization – and last week asks, quite legitimately, ‘what is the alternative?’ to those in the SA Communist Party and Business Leadership South Africa who throw cold water at him – a debate of enormous ideological magnitude opens, which ordinary folk in civil society should join. Especially those with a green streak.

For those of us in KwaZulu-Natal, engagement is vital because of new scientific findings about overestimated coal industry reserves, SACP leader Jeremy Cronin’s recent suggestion of ‘phasing out aluminium smelters’ at Richards Bay (and we might add, Durban’s killer-manganese Assmang at Cato Ridge which alone chews a third of our city’s electricity), and the global climate summit in November-December.

It bears repeating that the COP17 will be extremely embarrassing for South Africa, not only because Durban will notoriously host the demise of the Kyoto Protocol’s binding commitments, due to the destructive influence of US and European Union. WikiLeaks revealed Washington’s bad habits – bullying, bribery and blackmail – when promoting the non-binding 2009 Copenhagen Accord, a sham of a climate agreement.

Pathetically, Jacob Zuma played into the hands of the major polluters as an original signatory. A decent society would have impeached him immediately for, as Bill McKibbon of 350.org explained the actions of his own president at the time, ‘Obama broke the UN!’ at Copenhagen.

Expect more UN wreckage at the ICC on December 9, closing day. But that aside, the main reason that Pretoria faces embarrassment is increasing awareness of dirty secrets of coal-fired electricity abuse. This is a result of the way that mining houses – especially Anglo American Corporation and BHP Billiton – have managed to monopolize the world’s cheapest energy while poor people are so overcharged that they face widespread disconnection.

High-profile resistance this month alone included the burning of municipal councilors’ houses over high prices and prepayment meters in Soweto, Tzaneen residents’ attacks on Eskom officials engaged in power cuts, and in Durban’s Kennedy Road, successful protests against a municipal subcontractor chopping illegal electricity connections.
South Africa’s ‘Minerals-Energy Complex’ – a phrase coined by former Trade and Industry director-general Zam Rustomjee and British economist Ben Fine – has become a barrier to society’s balanced development and also a threat of great magnitude to the local and global environment. As last month’s diagnostic document from the new planning ministry admitted, “SA’s economy is highly resource intensive and we use resources inefficiently. As a result we are starting to face some critical resource constraints, e.g. water.”

Eskom is the biggest water consumer, so as to cool Mpumalanga power plants. The coal burned in the process has ruined many rivers, and so badly polluted the Kruger Park that hundreds of crocodiles have died. The main beneficiary, whose smelters guzzle more than a tenth of SA electricity, is BHP Billiton, the Melbourne firm that started life as Gencor. Eskom’s annual report admits it was given a R1.4 billion subsidy last year thanks to apartheid-era deals, and was responsible for Eskom’s R9.7 billion loss the year before.

This is why our wealth is a ‘resource curse’. Dating back to the discovery of Kimberley diamonds in the 1860s and Witwatersrand gold in the 1880s, a handful of corporations gained power over national development policy. At one point, Anglo American and De Beers – run mainly by the Oppenheimer family dynasty – controlled almost half the country’s gold and platinum, a quarter of the coal, and virtually all the diamonds, with held critical stakes in banking, steel, auto, electronics, agriculture and many other industries.

According to the Truth and Reconciliation Commission, the mining industry’s ‘direct involvement with the state in the formulation of oppressive policies or practices that resulted in low labour costs (or otherwise boosted profits) can be described as first-order involvement [in apartheid] … The shameful history of subhuman compound [hostel] conditions, brutal suppression of striking workers, racist practices and meager wages is central to understanding the origins and nature of apartheid.’

The terrible legacy of the Minerals-Energy Complex continues, as witnessed by the financing of Eskom’s new coal-fired mega power plants Kusile and Medupi (the world’s third and fourth largest), the energy ministry’s multi-decade integrated resource planning exercise – run by a committee dominated by electricity-guzzling corporations – and Pretoria’s contributions to global climate debates: the COP17; Zuma’s co-chairing of a UN sustainable development commission; and Planning Minister Trevor Manuel’s role as co-chair of the Green Climate Fund (GCF) design team, which seeks $100 billion a year in North-South flows.
Last week at a Tokyo GCF meeting, Manuel suppressed debate requested by Nicaragua about the World Bank’s conflict of interest, for it both provides input to the huge fund as well as serving as interim trustee, against UN procedure. Instead of paying reparations for ‘climate debt’, the GCF appears to cement existing power structures, and instead of raising funds from from polluters in the North to deter emissions, potentially half of the fund might come from carbon trading (a suggestion by Manuel), which will prolong Northern corporate climate destruction.

Further Minerals-Energy Complex ecocide is the Witwatersrand’s acid mine drainage. Mine tailings dams composed of waste material measure 400 square kilometers, alongside six billion tons of iron sulphide, which, exposed to air and water, creates acid mine water which drains into the water table. The combination is devastating, especially when added to the coal mine pollution further east, on the country’s best agricultural land, not to mention hundreds of thousands of workers’ silicosis and tuberculosis, traced by Durban’s Health Systems Trust to the mines.

These legacies mean that even if Malema has won the spotlight, mining and energy firms are consistently criticized by labour, communities and environmentalists. The problem so far has been divisions of interest that prevent them from coming together effectively, a problem that needs to be urgently solved, certainly before the COP17 Conference of Polluters begins.