By: David Van Wyk
Modern South Africa started off in 1652 as the product of a mercantile monopoly company, the Dutch East India Company which landed at the Cape to establish a rest and recuperation centre there on the long voyages across the Indian ocean to the East Indies. Today there is hardly a sector in the South African economy which is not highly monopolised.
If we take platinum mining for example, 3 companies produce 80% of global output. South Africa also has 87% of global reserves. In the two decades prior 2009 these three companies averaged between 33% and 43% return on investment for shareholders, yet year after year neither workers nor communities benefited much from hosting these corporate giants on their land. In fact the externalised costs in terms of negative impacts have been huge. In 2008 Eskom started load shedding and these mines experienced intermittent interrupted power supply and as a result the platinum price shot up to US$ 2000 an ounce. with the financial collapse in 2009 the price fell back to around US$750 an ounce. And then gradually recovered to US$ 1450 where it has been stuck more or less for the last two years.
In 2012 Lonmin experienced a major strike, and in 2014 platinum mining companies experienced the longest strike in mining history. Yet it had no impact on the price… which showed no significant upward movement despite 60% of production being affected by the strike. It has since come to light, a) the the companies sold platinum to themselves below market value so as to avoid taxes, and to create the impression that they were earning less than what they actually did to avoid wage increases; and b) that they hoarded platinum in Swiss hoarding facilities ensuring that the strike would not affect the supply of platinum at all.
This results in two problems as a result: a) the South African fiscus was deprived of billions of dollars that could have been used in development projects and service delivery and b) they could actually afford to pay workers an living wage but refuse to do so simply to guarantee the enormous returns on investment to shareholders they have recorded over time. In other words in every instance these corporations have acted against the national interest in a most self serving manner. It really is time for this country to address its social and economic inequalities.
It is simply unacceptable that the vast majority of South Africans must accept living in slum and ghetto conditions while a small minority creams off the wealth of the country. If this is not done this country will explode. Real change in the South Africa means addressing the structural problems that has developed because of a certain economic model since at least the 1860s on the basis that the majority black African population should serve as cheap labour for a minority white (and now also black) political elite.
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