Patrice Motsepe entered the mining business when South Africa ended apartheid. Today the onetime lawyer and avowed capitalist is the country's first black billionaire.
On a brilliantly sunny Thursday in January, Patrice Motsepe, a vigorous 46-year-old with regal posture, is striding through a gleaming shopping mall on the Cape Town waterfront. Suddenly a crowd forms. A half-dozen employees from the Build-A-Bear Workshop ask for his autograph. Two giggling young women roll up their sleeves as Motsepe signs their arms with a black marker, smiling while admirers snap photos with cell phones. An older woman approaches Motsepe and nearly swoons, grasping his arm and laying her head on his chest as he pats her back and murmurs thank you in Xhosa, one of the six African languages he speaks.
All this is not for a movie star or entertainer but for South Africa's first black billionaire. Over 15 years Motsepe, preaching free market capitalism, turned a low-level mining services business into the country's first black-owned mining company, African Rainbow Minerals, with 2007 revenue of $875 million. Driven by the Asian commodities boom, ARM's share price has rocketed in the past year from $12 to $24, pushing the value of Motsepe's net worth to $2.4 billion. Motsepe, a lawyer by training, serves as ARM's executive chairman, with a 42% stake in the company. He also owns a 5.5% stake worth $295 million in Sanlam, a publicly traded financial services company outside Cape Town.
By billionaire standards Motsepe has a modest lifestyle. His three sons attend prestigious private schools, but he has only one home, in the affluent Johannesburg suburb of Bryanston, and no yacht or plane. His one indulgence is to own the Mamelodi Sundowns, a soccer team. It doesn't tarnish his star quality that he's married to one of South Africa's most glamorous women, a medical doctor turned fashion impresario.
But for all the adulation, in South Africa such success comes with a price: being labeled an oligarch. Even many blacks have complained that the country's 1994 transformation from apartheid to democracy has benefited only the elite few. The criticism stems from laws that require substantial black ownership in certain industries, including mining. A handful of politically connected individuals have grown enormously wealthy as a result. One of Motsepe's sisters, Bridgette Radebe, who's married to transport minister Jeffrey Radebe, heads a mining company and is said to be among the wealthiest black women in the country. "It's called crony capitalism," says Moeletsi Mbeki, 62, brother of South Africa's president and an outspoken critic of the race-preference laws. "It's an anticompetitive system."
Motsepe concedes he benefited from the system yet says that his success was no handout, as he began building his mining business before the laws started taking effect in 2005. He says, "The legislation came way after we did our deals."
Motsepe and his family were in a better position than most to take advantage of the end of apartheid. Born in the sprawling black township of Soweto (next to Johannesburg), where his mother had grown up, Motsepe is a member of a royal clan within the Tswana tribe. He is, in fact, a prince.
Motsepe's father, Augustine Motsepe, was a critic of the apartheid regime. Before his son Patrice was born, Augustine was banished by the government to Hammanskraal, a rural area north of Pretoria where the government thought he could do less damage (he named his son after Patrice Lumumba, head of the Republic of the Congo and one of the first black African postcolonial leaders). There he opened a grocery store and then a beer hall and restaurant. "People don't know that there were very successful black businessmen in the years of apartheid," says Motsepe.
Though one of Patrice's maternal great-grandfathers came from Scotland, the old government classified the Motsepes as African. The family had to pull strings to get their seven children admitted to an Afrikaans-language Catholic boarding school that was officially designated for so-called "coloreds," South Africans of mixed race. From age 6, Motsepe spent school holidays working behind the counter in his father's store, where he says he learned his earliest lessons about business. "Whenever my father made a profit, he always plowed it back into the store," Motsepe recalls.
He graduated from the University of Swaziland and then became one of the few black law graduates of the University of the Witwatersrand in Johannesburg, designated whites-only by the apartheid government (Motsepe had to apply for an exemption to attend). In 1988 he joined Bowman Gilfillan, one of South Africa's largest corporate law firms, and in 1993 he became the firm's first black partner. Energetic and affable, Motsepe never wore his race on his sleeve, says Bowman partner and longtime Motsepe lawyer and confidant Neil Rissik.
Indeed, ask Motsepe about what it was like to grow up as a black man under the violent, racist apartheid regime and he responds with bromides. "The apartheid system was very bad for our people, very bad," he says blandly, switching quickly to the positive. "Only in South Africa could you have a change in government without civil war. If there wasn't the depth of love and caring among our people, this would not have happened."
Source: Forbes Magazine
Showing posts with label African Rainbow Minerals. Show all posts
Showing posts with label African Rainbow Minerals. Show all posts
Monday, March 24, 2008
Monday, February 25, 2008
Don't sacrifice lives for profit, says Motsepe
No life could be "sacrificed" in the name of profits, mining magnate and businessman Patrice Motsepe told protesting workers at a ferromanganese smelter near Durban on Monday. Speaking to workers, who on Monday staged a protest at the Assmang smelter following Sunday's blast that claimed the lives of five people, Motsepe said: "There is no life that can be sacrificed in the name of profits or making money. I will not tolerate it."
Motsepe, who is the largest single shareholder in African Rainbow Minerals, which is a 50% shareholder in Assmang, said that the circumstances surrounding Sunday's accident appeared to be similar to an accident that happened at the smelter last year. Motsepe spoke to workers after meeting with the Assmang management as well as senior workers' representatives. The explosion and subsequent fire ripped through the number six furnace of the smelter shortly before 5am in Cato Ridge, about 60km from Durban. One person died at the scene while a further four died during the course of Sunday and Monday morning. After addressing the workers, Motsepe told journalist that he could not comment on the cause of the accident until the completion of investigations. "We are not representing shareholders' interests if there is no zero tolerance towards [poor] safety," he said. Following the blast, the smelter's six furnaces were shut down. Motsepe could not immediately say how much the shutdown was costing the company. However, even though the smelter had been shut down, the estimated 700 workers were still expected to report for work to ensure that they were paid.
KwaZulu-Natal provincial minister of social welfare Meshak Radebe and Durban mayor Obed Mlaba also briefly spoke to the protesting workers. Earlier in the day about 100 workers marched from the smelter to the Cato Ridge Country club with a coffin, which they then placed in the middle of a hall where a Labour Department inquiry into a manganese poisoning case at Assmang was being held. The inquiry had to be postponed and was resumed later in the afternoon when the workers returned to the smelter. The inquiry, headed by Vuli Sibisi, is investigating the alleged 40 cases of manganism caused by workers breathing in fumes with airborne manganese particles.
Manganism is acquired by over-exposure to airborne manganese and is a disease that affects the sufferer's central nervous system, leaving them with symptoms very similar to Parkinson's disease and multiple sclerosis. Assmang executive director, Brian Brookeman, was about to give testimony when the workers marched into the hall with their coffin. On Monday, the Labour Department announced that the company would be subject to a second inquiry that would investigate the cause of Sunday's explosion. Labour department spokesperson Zolisa Sigabi said "a full-scale government investigation is under way following yesterday's [Sunday] massive explosion. The inquiry aims at establishing the cause of the tragedy, including any possible negligence or flouting of occupational health and safety measures," she said. On Sunday she said: "Labour inspectors who immediately arrived at the scene have in a preliminary report indicated that it is suspected that a water leakage into furnace number six caused the explosion to occur."
Earlier, National Union of Metalworkers (Numsa) spokesperson Mziwakhe Hlangani said that the company's engineers had ordered that the furnace be shut down before the explosion "after it was detected to have a water leakage". "We do not know how and why it was operated by the night-shift staff operators, because it was declared unsafe to put it [the furnace] in operation and we believe drastic steps after thorough investigations should be taken," Numsa local organiser Siphiwe Ntsele said. He said it was the second blast in nearly three months. He claimed that a worker had died on December 14 2007, in a similar blast.
Labour Minister Membathisi Mdladlana on Monday condemned the blast and vowed to "pull all stops in getting someone to account for the deaths and injuries" in Sunday's incident.
Source: IoL
Motsepe, who is the largest single shareholder in African Rainbow Minerals, which is a 50% shareholder in Assmang, said that the circumstances surrounding Sunday's accident appeared to be similar to an accident that happened at the smelter last year. Motsepe spoke to workers after meeting with the Assmang management as well as senior workers' representatives. The explosion and subsequent fire ripped through the number six furnace of the smelter shortly before 5am in Cato Ridge, about 60km from Durban. One person died at the scene while a further four died during the course of Sunday and Monday morning. After addressing the workers, Motsepe told journalist that he could not comment on the cause of the accident until the completion of investigations. "We are not representing shareholders' interests if there is no zero tolerance towards [poor] safety," he said. Following the blast, the smelter's six furnaces were shut down. Motsepe could not immediately say how much the shutdown was costing the company. However, even though the smelter had been shut down, the estimated 700 workers were still expected to report for work to ensure that they were paid.
KwaZulu-Natal provincial minister of social welfare Meshak Radebe and Durban mayor Obed Mlaba also briefly spoke to the protesting workers. Earlier in the day about 100 workers marched from the smelter to the Cato Ridge Country club with a coffin, which they then placed in the middle of a hall where a Labour Department inquiry into a manganese poisoning case at Assmang was being held. The inquiry had to be postponed and was resumed later in the afternoon when the workers returned to the smelter. The inquiry, headed by Vuli Sibisi, is investigating the alleged 40 cases of manganism caused by workers breathing in fumes with airborne manganese particles.
Manganism is acquired by over-exposure to airborne manganese and is a disease that affects the sufferer's central nervous system, leaving them with symptoms very similar to Parkinson's disease and multiple sclerosis. Assmang executive director, Brian Brookeman, was about to give testimony when the workers marched into the hall with their coffin. On Monday, the Labour Department announced that the company would be subject to a second inquiry that would investigate the cause of Sunday's explosion. Labour department spokesperson Zolisa Sigabi said "a full-scale government investigation is under way following yesterday's [Sunday] massive explosion. The inquiry aims at establishing the cause of the tragedy, including any possible negligence or flouting of occupational health and safety measures," she said. On Sunday she said: "Labour inspectors who immediately arrived at the scene have in a preliminary report indicated that it is suspected that a water leakage into furnace number six caused the explosion to occur."
Earlier, National Union of Metalworkers (Numsa) spokesperson Mziwakhe Hlangani said that the company's engineers had ordered that the furnace be shut down before the explosion "after it was detected to have a water leakage". "We do not know how and why it was operated by the night-shift staff operators, because it was declared unsafe to put it [the furnace] in operation and we believe drastic steps after thorough investigations should be taken," Numsa local organiser Siphiwe Ntsele said. He said it was the second blast in nearly three months. He claimed that a worker had died on December 14 2007, in a similar blast.
Labour Minister Membathisi Mdladlana on Monday condemned the blast and vowed to "pull all stops in getting someone to account for the deaths and injuries" in Sunday's incident.
Source: IoL
Tuesday, May 25, 1999
South Africa: the fraud of "black empowerment"
With less than two weeks before elections take place in South Africa, a share option scandal has broken out involving the country's biggest black-owned company, New African Investments Ltd (Nail), which has interests in financial services and the media.
The scandal has brought into sharp focus the African National Congress (ANC) government's policy of "black empowerment", which has enriched a tiny minority of black businessmen and government officials over the past five years.
Along with many companies in South Africa, Nail is in financial difficulties. Institutional shareholders objected when four company directors, who control almost all the voting shares, attempted to award themselves more than R130 million (£13 million) of share options in a subsidiary company. Two of the directors, Nthato Motlana, a Soweto doctor and one-time anti-apartheid activist, and Jonty Sandler, a white entrepreneur, were forced to resign. Motlana accused "white shareholders" of fomenting the revolt. Black financial commentators sprang to the directors' defence, arguing that lucrative option deals were normal in white businesses.
The two other directors involved, Dikgang Moseneke and Zwelakhe Sisulu, extricated themselves by making abject apologies. They have been discussing with financial institutions about how to turn around the company, which has a market capitalisation of R7 billion (£693 million). They both declared that severe cutbacks were necessary: "It will have to be surgery, not bandages and ointment."
The scandal follows the departure last month of Cyril Ramaphosa, Nail's deputy chairman, who was forced to resign by fellow directors for reasons not yet explained. Ramaphosa was the founder and former leader of the National Union of Mineworkers and general secretary of the ANC, who negotiated the end of white minority rule on its behalf. Today, he is one of the country's foremost super-rich black businessmen and is chairman of Anglo-American and South African Breweries.
On coming to power in 1994, the ANC government abandoned the "socialist" rhetoric it had used to mobilise the South African masses against apartheid. Instead, it insisted that "political liberation" should be followed by "economic liberation", i.e., that blacks should benefit from "affirmative action" in employment, government contracts and privatisations. The government programme of "black empowerment" was aimed at facilitating the "creation of large black-owned businesses". Hundreds of new companies have been launched in the past five years.
At least nine black-controlled investment consortia, or black empowerment groups, have been established. They have gained a stake in several of South Africa's biggest corporations: South African Breweries, Times Media, PO Holdings (information technology) and Metropolitan Life (insurance). Black boardroom involvement is a virtual necessity for bidding on big government contracts.
The government also recently passed quota-based affirmative action legislation in the awarding of government contracts, licenses and privatisation schemes. Companies deemed to have a substantial black ownership are awarded a 15 percent price advantage when bidding for public contracts. A condition for the new license to be issued in July to a cellular telephone company is that a black empowerment group must maintain a shareholding in the company making the bid.
Several local authorities are organising private sector partnerships with international companies like Saur International of France and Biwater of the UK, to help run water, sewage and other services. This means that black empowerment groups will be participating in the commercial supply of water in the townships, under conditions where many consumers cannot afford to pay water bills and are returning to traditional sources of water. The national transport department is also drawing up plans to bring private companies in to run the municipal airport and bus services.
In September 1995 only 1 percent of the market capitalisation on the Johannesburg Stock Exchange was under black control. Today, the figure has risen to 16.3 percent. Last year, black companies made 130 major investments worth R21 billion (£2.1 billion) compared with R5 billion (£0.5 billion) in 1997 and R1.6 billion (£0.16 billion) in 1996. A new generation of black tycoons has been created, including Ramaphosa, Moseneke and Sisulu, Nail's directors.
This has the backing of the most farsighted representatives of big business. In a Financial Times review of the book Empowered but not yet enriched Philip Gawith wrote of the importance of having more "comrades in business". "When the bright young blacks have turned their backs on politics and are intent instead on making a fortune, that will be the signal that South Africa has grown up," Gawith writes.
Harry Oppenheimer, a major shareholder in Anglo-American, a mining company that dominates the South African economy, said recently, "It was vital to make it possible for black people to control some of the big companies in South Africa. It was the right thing to do—part of a necessary response to the efforts for peace made by Mandela and his colleagues. You felt business had to match their efforts.... We owe an immense amount to Mandela. If it had not been for him, we would not have had the peaceful transition."
Anglo-American organised the finance for a spin-off company, Johnnies Industrial Corporation (Johnnic). The National Empowerment Consortium (NEC) purchased it, with Ramaphosa as chairman. Some companies operate as joint ventures with white businesses. Others fulfil government requirements by appointing one or two blacks to the board, allotting a slice of equity to a fledgling empowerment group and appointing a few black managers.
Global crisis upsets black empowerment
Few black South Africans have money of their own to buy into such equity, so almost every empowerment deal has been built on debt. The banks made arrangements for these "capitalists without capital" by setting up a "Special Purpose Vehicle" (SPV) and issuing shares with a life of three to five years. The shares are pledged as security for the loans used to buy them. This means that the SPVs depend for their success on continually rising share prices and moderate interest rates. In the context of the present economic instability, the banks are the real beneficiaries of black empowerment.
The economic outlook for South Africa is bleak. The economy has been hit by a collapse in the world price of gold, a commodity that plays a crucial role in the country. In 1980 the price of gold was $850 an ounce; last week it fell to a 20-year low of less than $280. Gold has traditionally been held as a hedge against inflation and a safe haven from turbulent stock markets. But the IMF is proposing to sell off 150 tonnes of gold, 10 percent of its gold reserves. The Bank of England has also announced plans to auction off half the UK gold reserves in July. Anglo-American, which controls the world's diamond industry and is the largest gold and platinum producer, is leaving the Johannesburg Stock Exchange next week and will move its primary listing to London.
Last October share prices collapsed on the Johannesburg Stock Exchange. The JSE's all-share index fell by 40 percent from its high point only six month earlier. The banks and financial services index lost almost 60 percent in the same six-month period, threatening many black empowerment companies like Johnnic, where shares values have fallen by 50 percent. Funding arrangements for its black investors expire in less than a year. If the share price does not rise rapidly the lenders could reclaim their security and the empowered black owners would get nothing, wiping out black ownership on the JSE.
The ANC government has appointed Ramaphosa to head a newly appointed commission to look into ways of "putting the movement on more solid foundations". One proposal is for more active participation by black-owned companies in the mining industry. At present, about two-thirds of mineral rights are privately owned and one third belong to the state. The government is planning to vest all mineral rights in the state so that black-owned companies can be given access to South Africa's plentiful minerals. Deep gold mines will not be affected by the plans because they require extensive investment in capital equipment beyond the means of small black-owned companies.
Anglogold, the world's largest mining company, has announced it is shedding its high cost operations to focus on its core assets. A year ago it sold off seven loss-making shafts from the Vaal Reefs gold mine to African Rainbow Minerals (ARM), a small black empowerment company. Last week ARM bought another six shafts. Other mineral reserves, like scattered deposits of shallow coal, are also being transferred to small black-owned companies. The only way these companies can survive on the world market is by increasing the exploitation of the predominantly black labour force. The massive speed-up will have terrible consequences for workers in an industry that already has one of the highest accident rates in the world.
The ANC and the "fat cats"
The ANC election manifesto calls for "A better life for business people", stating: "The ANC recognises that South Africa's business people are critical partners in the development of our country." The manifesto cites one of the achievements of the past five years as "the removal of apartheid barriers hampering economic growth and development and the introduction of better conditions for investment." Another is the creation of "conditions for the participation of black people and women in the economy as entrepreneurs and owners of wealth and the encouragement and growth of small and medium business."
Peter Vundla, an advisor to Thabo Mbeki, who is set to succeed Nelson Mandela as South African president, recently told Victor Mallet of the Financial Times that he has "no problem with fat cats".
Government claims that its policy of black empowerment provides an escape route from the squalor and misery of the townships are completely hollow. This programme is used to divert attention from the desperate problems confronting the working class, by transforming every social issue into a question of race. It enables a narrow layer of super-rich black entrepreneurs to enter South Africa's capitalist class, whilst the vast majority of the population remain deprived of their rights to education, a healthy life and employment.
Mbeki and the ANC are committed to implementing IMF austerity polices. In an attempt to attract greater investment from the transnational corporations they are offering a partnership with black consortia as a means of controlling the working class and imposing the necessary draconian conditions.
Source: World Socialist Web Site
The scandal has brought into sharp focus the African National Congress (ANC) government's policy of "black empowerment", which has enriched a tiny minority of black businessmen and government officials over the past five years.
Along with many companies in South Africa, Nail is in financial difficulties. Institutional shareholders objected when four company directors, who control almost all the voting shares, attempted to award themselves more than R130 million (£13 million) of share options in a subsidiary company. Two of the directors, Nthato Motlana, a Soweto doctor and one-time anti-apartheid activist, and Jonty Sandler, a white entrepreneur, were forced to resign. Motlana accused "white shareholders" of fomenting the revolt. Black financial commentators sprang to the directors' defence, arguing that lucrative option deals were normal in white businesses.
The two other directors involved, Dikgang Moseneke and Zwelakhe Sisulu, extricated themselves by making abject apologies. They have been discussing with financial institutions about how to turn around the company, which has a market capitalisation of R7 billion (£693 million). They both declared that severe cutbacks were necessary: "It will have to be surgery, not bandages and ointment."
The scandal follows the departure last month of Cyril Ramaphosa, Nail's deputy chairman, who was forced to resign by fellow directors for reasons not yet explained. Ramaphosa was the founder and former leader of the National Union of Mineworkers and general secretary of the ANC, who negotiated the end of white minority rule on its behalf. Today, he is one of the country's foremost super-rich black businessmen and is chairman of Anglo-American and South African Breweries.
On coming to power in 1994, the ANC government abandoned the "socialist" rhetoric it had used to mobilise the South African masses against apartheid. Instead, it insisted that "political liberation" should be followed by "economic liberation", i.e., that blacks should benefit from "affirmative action" in employment, government contracts and privatisations. The government programme of "black empowerment" was aimed at facilitating the "creation of large black-owned businesses". Hundreds of new companies have been launched in the past five years.
At least nine black-controlled investment consortia, or black empowerment groups, have been established. They have gained a stake in several of South Africa's biggest corporations: South African Breweries, Times Media, PO Holdings (information technology) and Metropolitan Life (insurance). Black boardroom involvement is a virtual necessity for bidding on big government contracts.
The government also recently passed quota-based affirmative action legislation in the awarding of government contracts, licenses and privatisation schemes. Companies deemed to have a substantial black ownership are awarded a 15 percent price advantage when bidding for public contracts. A condition for the new license to be issued in July to a cellular telephone company is that a black empowerment group must maintain a shareholding in the company making the bid.
Several local authorities are organising private sector partnerships with international companies like Saur International of France and Biwater of the UK, to help run water, sewage and other services. This means that black empowerment groups will be participating in the commercial supply of water in the townships, under conditions where many consumers cannot afford to pay water bills and are returning to traditional sources of water. The national transport department is also drawing up plans to bring private companies in to run the municipal airport and bus services.
In September 1995 only 1 percent of the market capitalisation on the Johannesburg Stock Exchange was under black control. Today, the figure has risen to 16.3 percent. Last year, black companies made 130 major investments worth R21 billion (£2.1 billion) compared with R5 billion (£0.5 billion) in 1997 and R1.6 billion (£0.16 billion) in 1996. A new generation of black tycoons has been created, including Ramaphosa, Moseneke and Sisulu, Nail's directors.
This has the backing of the most farsighted representatives of big business. In a Financial Times review of the book Empowered but not yet enriched Philip Gawith wrote of the importance of having more "comrades in business". "When the bright young blacks have turned their backs on politics and are intent instead on making a fortune, that will be the signal that South Africa has grown up," Gawith writes.
Harry Oppenheimer, a major shareholder in Anglo-American, a mining company that dominates the South African economy, said recently, "It was vital to make it possible for black people to control some of the big companies in South Africa. It was the right thing to do—part of a necessary response to the efforts for peace made by Mandela and his colleagues. You felt business had to match their efforts.... We owe an immense amount to Mandela. If it had not been for him, we would not have had the peaceful transition."
Anglo-American organised the finance for a spin-off company, Johnnies Industrial Corporation (Johnnic). The National Empowerment Consortium (NEC) purchased it, with Ramaphosa as chairman. Some companies operate as joint ventures with white businesses. Others fulfil government requirements by appointing one or two blacks to the board, allotting a slice of equity to a fledgling empowerment group and appointing a few black managers.
Global crisis upsets black empowerment
Few black South Africans have money of their own to buy into such equity, so almost every empowerment deal has been built on debt. The banks made arrangements for these "capitalists without capital" by setting up a "Special Purpose Vehicle" (SPV) and issuing shares with a life of three to five years. The shares are pledged as security for the loans used to buy them. This means that the SPVs depend for their success on continually rising share prices and moderate interest rates. In the context of the present economic instability, the banks are the real beneficiaries of black empowerment.
The economic outlook for South Africa is bleak. The economy has been hit by a collapse in the world price of gold, a commodity that plays a crucial role in the country. In 1980 the price of gold was $850 an ounce; last week it fell to a 20-year low of less than $280. Gold has traditionally been held as a hedge against inflation and a safe haven from turbulent stock markets. But the IMF is proposing to sell off 150 tonnes of gold, 10 percent of its gold reserves. The Bank of England has also announced plans to auction off half the UK gold reserves in July. Anglo-American, which controls the world's diamond industry and is the largest gold and platinum producer, is leaving the Johannesburg Stock Exchange next week and will move its primary listing to London.
Last October share prices collapsed on the Johannesburg Stock Exchange. The JSE's all-share index fell by 40 percent from its high point only six month earlier. The banks and financial services index lost almost 60 percent in the same six-month period, threatening many black empowerment companies like Johnnic, where shares values have fallen by 50 percent. Funding arrangements for its black investors expire in less than a year. If the share price does not rise rapidly the lenders could reclaim their security and the empowered black owners would get nothing, wiping out black ownership on the JSE.
The ANC government has appointed Ramaphosa to head a newly appointed commission to look into ways of "putting the movement on more solid foundations". One proposal is for more active participation by black-owned companies in the mining industry. At present, about two-thirds of mineral rights are privately owned and one third belong to the state. The government is planning to vest all mineral rights in the state so that black-owned companies can be given access to South Africa's plentiful minerals. Deep gold mines will not be affected by the plans because they require extensive investment in capital equipment beyond the means of small black-owned companies.
Anglogold, the world's largest mining company, has announced it is shedding its high cost operations to focus on its core assets. A year ago it sold off seven loss-making shafts from the Vaal Reefs gold mine to African Rainbow Minerals (ARM), a small black empowerment company. Last week ARM bought another six shafts. Other mineral reserves, like scattered deposits of shallow coal, are also being transferred to small black-owned companies. The only way these companies can survive on the world market is by increasing the exploitation of the predominantly black labour force. The massive speed-up will have terrible consequences for workers in an industry that already has one of the highest accident rates in the world.
The ANC and the "fat cats"
The ANC election manifesto calls for "A better life for business people", stating: "The ANC recognises that South Africa's business people are critical partners in the development of our country." The manifesto cites one of the achievements of the past five years as "the removal of apartheid barriers hampering economic growth and development and the introduction of better conditions for investment." Another is the creation of "conditions for the participation of black people and women in the economy as entrepreneurs and owners of wealth and the encouragement and growth of small and medium business."
Peter Vundla, an advisor to Thabo Mbeki, who is set to succeed Nelson Mandela as South African president, recently told Victor Mallet of the Financial Times that he has "no problem with fat cats".
Government claims that its policy of black empowerment provides an escape route from the squalor and misery of the townships are completely hollow. This programme is used to divert attention from the desperate problems confronting the working class, by transforming every social issue into a question of race. It enables a narrow layer of super-rich black entrepreneurs to enter South Africa's capitalist class, whilst the vast majority of the population remain deprived of their rights to education, a healthy life and employment.
Mbeki and the ANC are committed to implementing IMF austerity polices. In an attempt to attract greater investment from the transnational corporations they are offering a partnership with black consortia as a means of controlling the working class and imposing the necessary draconian conditions.
Source: World Socialist Web Site
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