De Beers ropes in black workers

Time of article published Mar 18, 2000

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By Malcolm Ray

The demise of apartheid has encouraged an enlightened leadership at De Beers, the world's largest diamond mining, buying and selling organisation, to refashion the company's image.

For the first time, a group of retrenched black mine workers has been granted a 30-year contract to recover residual diamonds from the company's mine dumps in the Kimberley area.

In the old colonial building housing the boardroom of De Beers' Kimberley headquarters, with its immaculately polished yellow oak table where the company's powerful executives have gathered for more than a century, Jeff Leaver, chief of industrial relations, reflects on the past. "This is mining history, a kind of museum of artefacts and a monument to those who pioneered diamond mining in the country," he says.

For successive captains of De Beers, it has been an article of colonial faith that a tradition of ownership and control of Kimberley's diamond deposits is preserved.

Black workers are born to inherited disadvantage. "You either work on the mine or you don't work at all," says Leaver.

But things look set to change.

Dumpco, the name of the small-scale mining initiative that started operations early last year, nestles in the shadow of a massive mining operation run by De Beers on the outskirts of Kimberley.

"It is testimony to De Beers' commitment to job creation and black economic empowerment," says Leaver.

A corrugated iron container used as an office is enclosed by a fence over which hangs a huge banner that reads: "Dumpco: creating jobs for a brighter future."

On the brow of a hill overlooking Dumpco, a tall grey statue of Cecil John Rhodes, the founder of De Beers, looks starkly out of place in the changing environment.

"It is a perfect irony," says Leaver, "when unemployment has sunk its roots deep into mining communities in Kimberley and black entrepreneurial activities like Dumpco are emerging."

By the late 1980s a recession in the industry had debilitated much of Kimberley's commercial life, he explains. Mineral prices had fallen and three of De Beers' mines were forced to cut costs in order to remain financially viable.

By 1992, two waves of retrenchments exacted a heavy toll on mine workers.

More than 1 000 were jobless. Most were old and lacked the basic skills to work outside the mining industry. "It was the end of the road for them and their families," says Leaver.

For seven years, most retrenched workers eked out a living selling fruit and vegetables in Galashewe township where most of the miners' families live.

Salmon Sethibang, a 49-year-old retrenchee and Dumpco shareholder, says that he struggled to put food on the table. "Within a year of my retrenchment, my provident fund ran out and my wife and two children suffered."

By early last year, unemployment had soared to two-thirds of Kimberley's adult population. However, from hapless victims of an ailing industry and local economy, 36 retrenchees have become the beneficiaries of the spoils of previous mining operations.

Dumpco is a flat patch of land encircled by several excavation sites around which the city is landscaped.

A modest labour-intensive conveyor belt used to feed ore into a rotating sieve hums noisily. Workers use wheelbarrows to load the conveyor belt with debris while others pan the debris for diamonds by hand.

"Our main goal is to create and retain jobs for retrenched miners even if that means cutting into our profits," says Sheldon Swarts, an ex-retrenchee who now heads the operation.

A small man whose face is pitted and grey from the debris, Swarts could easily be mistaken for a general labourer. He says that the lease agreement between Dumpco and De Beers is explicit in its commitment to reconstruction and development.

"It states that 36 people would be employed compared to modern mining practices where three people would be required to operate sophisticated machinery," Swarts says.

In terms of the agreement, De Beers pays Dumpco for the treatment of its mine dumps and in return gets 50 percent of the profits from the sale of the recovered diamonds.

On average, each worker earns a monthly wage of R1 400, "much less than the average minimum wage of a miner at De Beers. But it's better than nothing," Swarts says.

Nevertheless, the initiative is thriving.

In less than a year, Dumpco has managed to repay a loan of R942 000 from De Beers and an additional R800 000 from the De Beers-National Union of Mineworkers (NUM) joint retrenchment fund as venture capital for the cost of equipment.

At the end of last year, each shareholder received a profit dividend of R6 000.

But while Dumpco is an economically sound example of small-scale black entrepreneurship, problems of accountability threaten to bedevil the initiative.

Twenty-eight beneficiaries have joined the Num in an attempt to challenge the authority of Swarts and other elected trustees.

In a bizarre twist, this state of affairs has pitted the union against members of the trust who are themselves workers and ex-unionists.

In Kimberley's central business district, where Num's regional office is based, several Dumpco shareholders wait their turn to lodge grievances against the company's board of trustees.

They allege that the trust deed that sets out the power and responsibilities of trustees is "vague and undefined".

"The trustees have abused their powers by failing to account to the beneficiaries. There are no proper financial statements, no minutes of meetings and no clear distribution of powers," says Zack Bogwaewi, a disgruntled shareholder.

For the Num, the initiative has thrown into sharp focus the contradictory impulses of workers going into business. Parks Modise, the union's regional chairperson, says that the problem illustrates a "clash of interests", which has placed the union at loggerheads with those who manage the affairs of Dumpco.

Last month, the Num suspended its representation on the Dumpco board in an act of protest.

While Modise says that his union has no "principled objection" to workers becoming entrepreneurs, it is not clear what alternative is being offered.

He concedes that the union has been caught "off guard".

"While we support any initiative that creates jobs for retrenched miners, we have not worked out a policy for entrepreneurial activities like Dumpco. Our brief as the Num is to defend workers' interests. But that's impossible when workers are themselves bosses," he says.

Swarts believes that the problem is not intractable. He sees the venture as a "learning curve" for workers who are entering "new terrain".

"We come from a tradition of militancy and opposition to capitalist ventures. We now find ourselves owning capital. That's a big but progressive leap," he says.

His faint smile shows real excitement about the future.

"We are far from the boardroom of De Beers. But in our own small way I think we are staking our claim to minerals we mined for a century but never owned," Swarts says.

De Beers' modest contribution to the process of black economic empowerment might just ensure that another generation of miners is not born to inherited disadvantage.

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