In labour: Zuma’s extractives empire hatched | Eleanor Momberg

by Sep 13, 2012Magazine

in-labourPresident Jacob Zuma’s nonprofit rural development project is diversifying into mining, just as the country faces a conjuncture in its extractive practices.

A well-placed source has told Amandla! that the extended Zuma family is using the R2 bn Masibambisane Rural Development Initiative (MRDI) as a springboard for mining investment, particularly in coal mining to supply Eskom’s massive new coal-fired power stations. This expansion into coal mining is yet another indication that South Africa’s

‘black gold’, and the energy-intensive path it feeds, is cementing the mineral-energy complex as the vehicle of choice for personal and party power.

Anglo American may still be the country’s largest coal, gold and platinum mining house, but through BEE and party political empires such as Chancellor House, the establishment of ANClo Americo Inc. is well on its way. Zuma chairs Masibambisane, which is one of his three main non-profit ventures. Its rural projects are situated neatly in the coalfields of KwaZulu-Natal, the Eastern Cape and Mpumalanga, but North West, where the richest platinum mines are now in global spotlight, is apparently next in line for the rural development largesse.

The MRDI was meant to be a purely social entrepreneurial venture, promising local jobs for unemployed rural youth. It made headlines recently after revelations that it is bankrolling development of a new town near the President’s private rural home at Nkandla. A document on the MRDI, dated July 2011, states that Zuma’s rural initiative will not only ensure agricultural development and the introduction of renewable energy, but also Internet access for schools through the supply of computers. But it is silent on the issue of mines. Nor has Masibambisane produced an annual report yet, although enquiries yielded promises that one is in production. Ministers and departments have been leaned upon to invest in MRDI’s rural projects.

The Mail & Guardian reported that one department alone has diverted R800 m to these ventures. The chosen sites in Kwazulu-Natal and Mpumalanga, but particularly the Eastern Cape, have also caused raised eyebrows because of their potential to act as sweeteners for voters and traditional leaders in support of Zuma’s bid for a second term.

Zuma’s non-profit projects have also been supported by mining conglomerates such as De Beers and Harmony Gold and by mining magnates such as Patrice Motsepe of African Rainbow Minerals.

Amandla!’s MRDI source said the Zuma clan’s mining plan was finally coming to fruition with the first formal investments to be made by the end of 2012. However, a founder member of the MRDI, businessman Deebo Mzobe, who is reportedly a Zuma relative, denied any formal decisions or intentions by Masibambisane to branch out into the mining industry.

He was only aware of discussions around the reopening of mills in KwaZulu-Natal and the relaunch of irrigation schemes. However, Amandla!’s source insists that mining is included in a new plan to diversify MRDI’s investment portfolio, primarily through the reopening of disused mines in a bid to create jobs. ‘We are diversifying. We are going

to be investing in all the coal mining companies … That includes Anglo [American’s] New Largo mine and other mines in Mpumalanga.’ ‘Our plan involves 20 projects’, says Amandla!’s source. ‘We are not just looking at coal, but we are also looking at gold, wind and other renewable energy, sand, salt, etc. We want to develop communities. We will be investing in mines at New Castle, Dundee, Utrecht in KwaZulu-Natal and want to reopen the [disused mines] at Hlobane.

We will be investing in coal mines in Mpumalanga – all those that will supply Kusile.’ ‘We have spoken to the Royal Bafokeng about how they managed to have a R10 billion deal with Xstrata and we will be speaking to AngloGold Ashanti,’ said the MRDI source. ‘We have taken a strategic decision to invest in mining.’ He unashamedly admitted that ‘you need to be connected’ to do business in South Africa. ‘It has always been that way,’ he said.

The claim that the MRDI’s venture into mining has been in planning since 2004 was independently confirmed, by a second MRDI member, who stated (via SMS) that a July meeting on the matter with Zuma’s elder brother, Joseph, had been ‘successful’.

Delegates at the recent two-day mining lekgotla in Midrand were taken aback at being asked during the event’s closing minutes to recognise Zuma’s brother Joseph. The event focused on enabling mining to sustain and enhance its contribution to socio-economic development. The presence of a delegate from an agricultural initiative was seen by some as ‘proof of the further entrenchment of power’ by Zuma, and as an attempt at strengthening his faction’s bid for a second term in office. It was also seen as an explanation for his recent parliamentary statement that there was nothing wrong with the political elite or the politically connected being involved in business.

At the event Zuma re-emphasised the government’s commitment to the creation of a globally competitive mining sector, saying government considered it to be ‘one of South Africa’s major job drivers’. ‘We are committed to promoting the industry so that it is able to attract investment and achieve greater levels of growth and transformation’, he said.

Zuma has previously described mining as a ‘sunrise industry’ that retained considerable potential to contribute to the elimination of poverty, inequality and unemployment, apparently forgetting the ravages of its history in directing South Africa’s structural inequalities. Others, like Solidarity’s Gideon du Plessis, describe it cynically as a ‘cash cow’, despite its meager 18 percent contribution to GDP.

Presidential Infrastructure Coordinating Commission initiatives and much of the government’s new infrastructure plans are intended to unlock the enormous mineral belt of coal, platinum, palladium, chrome and other minerals in order to facilitate increased mining production ‘as well as the beneficiation of raw mineral commodities’. This, in turn, is government’s most cogent plan to make good on its promise of generating a million jobs.

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