South Africa in global spotlight

Easily the richest country on the African continent, South Africa is fast becoming as lawless and unheeding of human rights as many neighboring nations, such as Zaire and Mozambique, where anarchy has long been on the march. The only difference may be time.

While great social changes are under way, benefits for the black majority, to date, are mainly freedom from the detested and confining apartheid policies and the ability to move about freely for work or pleasure. Along with these newfound freedoms has come the formation of political parties representing local and national needs. While politicians are raising expectations of a new Utopia, this may be difficult to achieve without government nationalization or some similar type of confiscation of new sources of revenue.

Similar action by neighboring countries has ended in industry and government bankruptcy, and no improvement. Government mines in Zaire, Zambia and Tanzania are all in great trouble. Tragically, the only groups in those countries to gain were those entrusted to better the conditions which caused the original nationalizations.

Competitive escalation of political party rhetoric and civil violence toward opponents and innocents could lead to outright civil war and the possible partition of the country. Important population and business segments are being upset. Emigration, which has devastated neighboring economies, is accelerating. Professionals concerned about long-term quality of life are always the first to leave, and only their destination countries will benefit. In recent years, corporations were discouraged by sanctions advocated by political groups and many sold their holdings. Most are not returning. Complicating the troubles in Africa is the severe recession. Companies are laying off workers and shedding subsidiaries which are not considered part of core interests. Inco and Falconbridge have both sold their gold-mining interests. Amax sold it’s 30% interest in a Botswana nickel mine to the Botswana government for a nominal sum.

As the civil performance of the various political parties spills over into the commercial arena, unrealistic expectations and lawlessness can only result in commercial chaos. There are recent reports of widespread theft of overhead wires from utility poles.

Nevertheless, some expansion is taking place, though several companies are focusing on overseas developments. In 1990, De Beers set up De Beers Centenary in Switzerland to co-ordinate its foreign diamond business. In May this year, Gencor, a large South African miner, began negotiating to buy Royal Dutch Shell’s Billiton group which operates numerous mines producing such metals as aluminum, gold, nickel and zinc. At the same time, Gencor has been selling its domestic non-mining assets.

At risk to South Africa and overseas customers are outputs from some of the largest, best-run and most profitable mines in the world. The difficulties in the country cannot be viewed in isolation. Much of the imports and exports of similar metals for neighboring countries are transported through ports in South Africa and any civil upset would certainly affect their transportation. A worldwide audience of interested groups including miners and consumers will be watching the performances leading up to and following the elections on April 27, 1994.

— Jack Dupuis is a minerals marketing consultant in Thornhill, Ont. Estimated % of Western Production

Metal South Africa Botswana Zimbabwe Zaire Zambia

gold 34

platinum 71

palladium 32

rhodium 73

chrome 48 7

cobalt 10 30 7

copper 5 5

diamonds (indus.)8 20 6

diamonds (gems) 8

manganese 24

nickel 5 3 1

uranium 10

vanadium 75