32 The Anglo-American Corp of South Africa Ltd Stepping off a spaceship, making a whirlwind tour of global mining, then examining the index to The Gulliver File, a visitor from outer space may be forgiven for assuming that - if spaceship earth is fuelled by uranium, its banking system solidly based on gold, its leaders of fashion luxuriously bedecked in diamonds and platinum, and the most crucial decisions about its mineral resources taken in London and Johannesburg - only two names need be recorded to take back to Mars or Pluto. One of these is RTZ - in terms of market capitalisation and influence, by far the most powerful mining conglomerate this side of the solar system.
The other is Anglo-American (MC) - in terms of value (for its assets and production) a bigger swimmer in the milky way than RTZ (1), but handicapped by its identification with the apartheid state.
In a perfect world for mining, perhaps there would be only one name our alien interloper would need to retain: RA (Rio-Anglo, not to be confused with Rhoanglo) or ATZ (Anglo-Tinto-Zinc). Or perhaps just Mine Inc (All mine, indeed!).
In fact the links between the AAC and RTZ go back a long way, and are deeper than either corporation would admit. The extent of AAC's holding in the British corporation has never been revealed, but it is often contended that the Oppenheimers and Rothschilds have considerable secret or indirect holdings in RTZ. Charter Consolidated certainly had an admitted 8% through the 1970s (2). They are also linked in several important projects - notably the Argyle diamond mines on Aboriginal land in the Kimberleys of Western Australia, and the Palabora copper uranium mine in South Africa. RTZ and AAC front companies share domiciles in the town of Zug, Switzerland, through which they launder sensitive wares. They co-operated in evading UN and British sanctions against the Ian Smith regime in Rhodesia, and have combined to cheat the Zimbabwean and Botswanan governments of revenue from nickel operations, through an elaborate 'transfer pricing' scheme (see RTZ) (3). More recently, Rio Tinto Zimbabwe (Riozim) and Anglo-American Zimbabwe (Anzim) signed a JV agreement with Robertson's subsidiary Plateau Mining, to exploit platinum reserves in the central Hartley complex of the country's Great Dyke region (421). What distinguishes Anglo-American from RTZ is not simply their origins (the one in north American and British investment in South Africa's fabulous diamond and gold wealth, the other in older metals and uranium in Europe and Australia) but their corporate aims and style of management. Both diversified extraordinarily at a certain point in their development - AAC some years before RTZ, but along similar lines. However, while RZ has tightened its portfolio and consolidated its hold on a large proportion of western world mineral resources, AAC's diversification is hardly at an end.
AAC is quite clearly dominated, as it always been, by one family, the Oppenheimers, whose pretended liberalism - a highly developed, finely tuned mask on its desire to maintain white dominance of South Africa's natural resources - has been widely trumpeted around the world. There are numerous heads of state or trading blocks who have been graced with the apparition of an Oppenheimer stepping from his private jet to greet them. And from the Russians to the ANC (African National Congress) of South Africa, there is hardly one politically important dinner table at which they have not sat. While RTZ's directors keep the lowest of profiles, AAC's maintain the highest. While AAC's "hands on" management ensures that every major group within the Oppenheimer domain is aware of, and fits into, the global strategy, RTZ purports to give comparative freedom of decision and operation to its subsidiary and associate companies. In the final event, however, this difference may be a cosmetic one. Both corporations try to gain management control, even of projects in which they nominally hold a minority share (AAC in the Morro Velho gold mine, for example [see below]; RTZ in Rossing and Palabora). They are led by the same breed of men (even where, as in South Africa, they may differ marginally over such matters as limited black and coloured elections, or when to recognise the NUM). From his/her vantage point in outer space, our Martian or Venusian would be hard put to it, to distinguish between the human suffering caused by AAC's violent confrontations with the black NUM and RTZ's long-standing denial of Aboriginal land rights in Australia; or to detect a real difference between the environmental degradation caused by the Rossing mine and by Consolidated Diamond Mines' (CDM) diamond excavations along the Skeleton Coast.
The Anglo empire "We're living in a country controlled by cartels and lobbyists and a government only too keen to satisfy the lobbyists at the expense of 25 million people." This statement was made in 1986, not by the ANC, nor a leader of COSATU, but Robin McGregor, the editor of the country's Who Owns Whom. "The distribution of wealth in this country is zero," declared McGregor (4). Three years before it had been revealed that AAC companies owned no less than 56% of the Johannesburg stock exchange's total share value. That year, directly administered companies within the Oppenheimer conglomerate were worth R10 billion at a conservative estimate: non-administered companies even more (R17 billion) (5). AAC produced nearly half of South Africa's gold, 43% of its uranium and 25% of its coal (6). Within the next year or so, its investment was to increase by 30% and its trading profits improve by nearly half (46%) (7). By the end of 1984, the corporation owned 69% of the total capital invested in the country's mining; around a quarter of all the assets held by South Africa's "Top 100" non-state corporations. It had an acknowledged 831 subsidiaries and associate companies (of which nearly 200 were outside South Africa), and investments in just over 500 others (8).
AAC's diversification outside of South Africa and gold and diamonds took place in the 1960s, as the company used a hugely increased cash flow from its monopoly over mining (9) to buy into manufacturing, property and finance companies (10). By the end of the decade, the corporation's financial muscle was such that one academic, PW Hoek of the University of Pretoria, warned in a secret report that AAC was a threat to the state itself, especially in view of the low-tax position its operations enjoyed (11). Over the next decade, AAC (mainly through Minorco) acquired more than one hundred companies worldwide (12). It came to control three of the top four South African mining houses, six of the top ten finance houses, the largest investment Trust, the second largest property company, the second largest merchant bank, the largest transport company and the country's fastest growing car manufacturer. It was second only to the government as an employer of labour (13). Through its dominating interest in Johannesburg Consolidated Investment (JCI), AAC acquired a 40% equity in the Argus group of newspapers (the Johannesburg Star and other publications) and in 1971 control of the South Africa Association of Newspapers (now Times Media Ltd) (3, 10, 14). Through Minorco's control of IRC (see below) AAC later came to own a 71% interest in Madison Resources Inc, which owns 35% of the Arcata Corp - probably the biggest printers in the USA (used by Simon and Schuster, McGraw Hill, Time, Newsweek, Readers's Digest and others) (15). Through the Bowater group of Britain, AAC has gained control of Mondi Paper, the largest pulp, paper and board producer in South Africa (3, 10). It also owns 50% of HL and H Timber Holdings Ltd - a supplier to Mondi, and the mining industry's main provider of pit props. Through Natal Tanning Extract, AAC owns or leases more than 100,000 hectares in south-east South Africa for forestry, sugar cane and tanning extract (3). MC's steel, iron and engineering operations include Scaw Metals - a major supplier to the mining industry and parastatals like Escom and South Africa Railways (3); Boart International - which uses De Beers industrial diamonds to manufacture a wide variety of tools and equipment (3); Highveld Steel and Vanadium Ltd, established with the co-operation of Newmont and Davy (a major British engineering company) (see Davy McKee) (10). A JCI-administered company Consolidated Metallurgical Industries (CMI) runs the world's largest ferrochrome production plant, drawing on chromite supplied by other mining companies (3,16). In early 1989, Highveld and Samancor (Gencor) formed a JV (probably with Taiwanese capital) to manufacture ferrochrome and thus contributing further to the western world's dependence on South African ferrochrome output (17).
African Explosives and Chemical Industries (AECI) is run jointly by AAC and Britain's Imperial Chemical Industries (ICI) (10), although it has its origins in an outfit established by De Beers in 1924 to supply explosives to the mining industry. It is now the world's largest producer of commercial explosives and has played a crucial role in arming South Africa's security forces and army (3).
So, if you are shot in South Africa, the chances are the guns were primed by AAC. If you take a pint in a local bar, the chances are it was brewed by South African Breweries (SAB), a highly diversified company which runs the Holiday Inn hotel chain, Amalgamated Retail and Edgars Stores, and which is indirectly controlled by AAC through the Premier Group, a food milling, drugs and fisheries conglomerate in which AAC and JCI hold 47% (3,18). If you're white, you may be paying a mortgage to Amaprop - one of South Africa's largest property owners. And if you have the "fortune" to live in a stone house, the bricks almost certainly came from Tongaat-Hulett (AAC: 38.4%) a diversified industrial group into textiles, food, aluminium processing (19) - and one of the world's biggest manufacturers of bricks (3). If you work down one of AAC's mines, your meat, vegetables, fruit and other products may well come from Amfarms, the only food company administered by a mining house (3). If you have the even greater fortune to own a car, it will either be a Toyota, or come from Samcor, the country's second biggest manufacturer: Samcor inherited the interests of Chrysler in South Africa, and more recently the Ford Motor Co (when US pressure forced Ford to pull out in 1987); it is owned 76% by AAC and AMIC (3, 20), with 24% in the hands of a "worker- controlled" Trust (21).
In 1983, AAC also owned 43% of Asea Electric SA (25% was owned by the Swedish parents) (22): that year part of the holding was sold, so that AAC could gain a foothold in the electronics industry via Altech of Japan (23).
Many of these companies are administered by the Anglo-American Industrial Corporation (AMIC), although some of the most powerful (ie SAB) are not directly controlled in this fashion. In 1979 AMIC alone had more than a hundred subsidiaries and associates and by the early 1980s was controlling more than the combined GDPs (Gross Domestic Products) of the Southern African Development Co-ordination Conference (SADCC) (8). AMIC has been crucial to the corporation's diversification and its vertical integration, especially as the threat of sanctions became a reality and AAC's more visible exports stood the risk of being targeted (3).
Control of the AAC/De Beers empire undoubtedly lies with the Oppenheimer family, even though it nominally (through E Oppenheimer and Son) holds only 8% of AAC. Together, the family stake and De Beers's holding in AAC makes their combined position unassailable. Though AAC's stake in De Beers is appreciably smaller, its world standing, access to governments and the huge funds on which it can call make it highly unlikely that De Beers would try to slip from under the Oppenheimer threat. Other institutional shareholders in both companies have negligible power.
AAC is essentially a mining finance house with direct control over the funds held by holding companies or group subsidiaries (24). Though such ownership is officially well under 50%, through hidden subsidiaries and holdings, cross-linked directors, pension fund investments and other devices, AAC has a hole-shot position. Thus is created "an endless circle of ownership, participation and shared facilities" (25). Administered companies - even where AAC's holding is well under half - are implicitly dominated by AAC; "controlled associates" in theory stand at an arm's length from AAC, but in practice consent to fit in with the dominant modus vivendi; related companies are those in which AAC is neither the dominant shareholder (Harry Oppenheimer once defined this as below 30% but, depending on other holdings the threshold could be even lower) (24, 25), nor runs the management (3).
"The ability of Anglo to maintain control over many companies without taking a majority shareholding depends to a large extent on its position in the financial markets" (3). And here AAC is unbeatable. Ernest Oppenheimer founded his own bank, Union Acceptances, and by 1968 this was the seventh largest in the apartheid state (10). Morgan Guarantee, Citibank, the Union Bank of Switzerland, Banco Commerciale Italiano, Deutsche Bank, Banque de Paris and Standard Chartered have all invested in AAC's operations - the last named being a key agent in the sale of gold from the company's mines (13). But it is the link with Barclays National (Barnat) that has been most important in recent years. Under pressure from the anti-apartheid and disinvestment movement at home, the British bank started to hand over control of its South African assets in 1985. When the Bank finally pulled out the following year, AAC acquired 22.5%, De Beers 7.5% and Southern Life Insurance (an AAC company) another 25%. More than twenty billion Rand in assets, and around 17 billion Rand in deposits, passed to AAC for an eightieth (527 million Rand) of that figure (3).
Diamonds: the Emperor's old clothes "De Beers sells illusions," the Economist declared in 1987 (26). Once the world wakes up to the fact that little pieces of compacted carbon are no more than vanity mirrors, while their "industrial" version can be readily substituted by other, human-made artifacts, De Beers will go down the tubes. Or, more appropriately, down the kimberlite pipes. But that day is a long way off. This is not simply because of the protection De Beers has enjoyed from the South African Treasury (whereby the corporation has supported long-term state loans, and the regime permitted De Beers to raise funds abroad to finance overseas developments) (27). Nor is it simply due to the huge amount the company spends on perpetuating the Grand Illusion (more than a hundred million dollars a year in advertising), and the willingness of old customers (particularly in the USA) and newer ones (particularly in Japan and Taiwan) to succumb to it. It is also because, bringing down De Beers would threaten a trade on which a number of third world countries, particularly India, Zaire and Botswana, have come to depend.
Attempts have been made to get from under the De Beers sway but, to date, they have failed. The most notable example is that of Zaire which, after pulling out of the De Beers Central Selling Organisation (CSO) in 1981 because De Beers wa taking too heavy a cut, was forced to rejoin two years later (28). The CSO flooded the Indian market with cheap gems, slashed the price of boart (industrial diamonds) (29), promoted smuggling which funnelled off perhaps half of the country's output (30, 117), and seduced CRA, another prospective competitor, into the CSO by taking the vast majority of output from the new Argyle diamond mine (see below).
The Zaire lesson has been well learned by other countries which might be tempted to go it alone. Botswana has the world's richest single kimberlite pipe at Jwaneng, and 15.5% of the world's output of diamonds (31), making it globally the world's third largest producer overall, and the second most important gem producer (31). It is theoretically in a good position to market its production outside of the De Beers cartel. However, in 1987, after twenty years of association with the CSO and threats to break away, it almost literally climbed into bed with the Oppenheimers. It secured a 2.6% stake in De Beers itself, with two members of the board, and 50% control of Debswana, with the South African oligopoly (32).
Angola (which recently dissolved its diamond company (33) dominated by De Beers), Sierra Leone - and Argyle Diamond Sales itself (34) - have all been rumoured to be taking steps to sell their production outside the CSO. But, so far, the monopoly is holding. The Indian government continues, much to its embarrassment as an anti-apartheid state, to sell most of the output from its numerous cutting workshops to the CSO (35), while the Beijing regime in 1986 forged secret links with De Beers through a London-based company, Chichester Diamond Services (36). Israel - a very important diamond cutting and marketing centre which takes 30% of De Beers' diamonds directly (37) - welcomes the Oppenheimers with open arms (33).
It takes De Beers's covert relationship with the Russians to best illustrate how AAC/De Beers can achieve what no other cartel has ever been able to effect, for such a long period of time. In 1966 large consignments of high-quality diamonds began appearing on the international market from Siberian mines. These posed an immediate threat to De Beers, which soon despatched one of the clan (Sir Philip Oppenheimer) to offer the Russians participation in the cartel. The pact was sealed in conditions of great secrecy (38). Ever since then - and despite occasional hiccups - the Russian State Diamond Trading Organisation has sold a large portion of its output (worth US$1 billion annually) through the CSO. After the Sharpeville massacre in 1960, the Russians officially boycotted South African trade and officially De Beers declared the contract annulled (40). In fact, it was only public admission of the link which disappeared from view. Ever since then, contracts have been maintained between the world's oldest opponent of apartheid and South Africa's chief financial architect. The Oppenheimers have frequently visited Moscow, Russian mining engineers have looked at De Beers operations in South Africa, and De Beers miners have gone to Siberia (a less fractious journey, one would expect, than that of most dissidents). At the annual "Platinum Dinner" held in London's Savoy Hotel, the two parties meet to renew their diamond sales agreement, and (almost certainly) co-ordinate their platinum sales, as the world's two largest producing countries of this precious metal (3, 38).
The prospect of international sanctions, especially in the USA, which loomed large in 1987, has certainly worried De Beers more than the remote chance that the USSR would cancel its lucrative contracts with the CSO. US investigations into the cartel also promise to be far more thorough and damning than they were in Britain (41) at the time when AAC (through Minorco) attempted to take over Consolidated Goldfields (see below). However, for some years, De Beers has taken steps to ensure that its diamond sources and shipping routes are thoroughly disguised (42). De Beers diamonds can reach the USA through intermediary companies in Switzerland, Israel (43) and Britain, and innocuous-sounding staging-posts like the Isle of Man. (In 1988 De Beers set up three Manx companies registered in Zurich with no apparent connection to De Beers, called Pacini Ltd, Diamanx Products Ltd, and Manxtal Cutting Tools Ltd) (44). Through deals like Debswana, it has increased third world countries' dependence on the CSO, and deepened the reluctance of pro-sanctions campaigners to damage fragile economies (45). It has also channelled money (impossible to say how much) to governments that are critical of sanctions. For example, in 1987 it donated 47,500 to the Conservative Central Office (CCO): this was laundered (like its diamonds) through the Diamond Trading Company (Pty) Ltd in London, and the BUI (46).
De Beers was founded in 1880 by that epitome of imperialism, Cecil Rhodes, as an amalgamation of the undertakings of De Beers Mining Co Ltd and Kimberley Central Diamond Mining Co Ltd. Within a decade, thanks to the financial assistance of the Rothschilds, Rhodes had built up the country's strongest mining conglomerate, and controlled the most important diamond discoveries in the "new world" (29, 47). Rhodes died in 1902, the year Ernest Oppenheimer arrived in South Africa. De Beers had been expanding in South Africa itself (particularly at Bultfontein and Koffiefontein) and Oppenheimer, through Consolidated Diamond Mines (CDM), was to buy up the world's biggest diamond deposits in German South West Africa (Namibia) - with the financial help of the ubiquitous JP Morgan (63). After being elected to the De Beers board, and later (1929) becoming its chairman, Oppenheimer bought a 30.4% interest in De Beers, while De Beers took a 33.1% interest in AAC (29). In the 1970s, AAC and Rand Selection Corporation (Randsel) merged their holdings (48, 49), thus increasing the De Beers share of AAC. In 1982, AAC bought 10 million shares in De Beers (50). Since then, AAC has held 34% of De Beers, and De Beers has held 38% of the Anglo group.
The CSO was set up in 1930, as the marketing arm of De Beers. Although 30% of De Beers's assets lie outside the diamond industry, most of these are in AAC or Anglo subsidiaries and associates (such as Minorco). De Beers Industrial Diamonds (Ireland) markets all the company's natural and synthetic industrial diamonds, while its Industrial Diamond Division manufactures them (in South Africa, Eire and Sweden) (3). De Beers Consolidated Mines itself has numerous mines in South Africa and Lesotho, and is prospecting throughout the continent (51). Consolidated Diamond Mines of South Africa (Pty) Ltd runs the Namibian mines (51).
De Beers's own diamond production has waned in recent years, especially in South Africa (52), though tending to pick up in Namibia (53). This has increased the urgency with which De Beers has gone after diamonds elsewhere. The year 1980 was a crucial one in the history of the company (39). An unprecedented recession set in and sales only picked up gradually over the next five years (54). De Beers cut the number of its clients, reorganised its management at CSO, and became more flexible in its contracts (for example, not insisting that clients sell only through the CSO). Although record profits and prices were recorded in 1987 (58, 84) and the following year sales had rocketted by 88% (34, 56), an increasing proportion of the output was coming from mines other than those controlled by De Beers. A study carried out by the Honolulu-based East-West Center in 1988 concluded that the De Beers share of the world market - variously estimated at 74%-85% (57, 59) - would have dropped to 63% by the turn of the century (57, 58).
However, said the report's authors, the cartel would continue to be effective, even as the twenty-first century loomed round the corner: such was the compulsion of voluntarism - by which producers consented to be tied into the CSO system - and such was the power of De Beers's unique classification and stockpiling systems (58). By and large, De Beers pays producers incentive prices when market prices are weak, and, in order to avoid the over-production that could then result, runs a quota system among its key suppliers. It dominates the trade in rough diamonds, through buffer-stock managers in Kinshasha, Antwerp and elsewhere, who can buy up excess supplies from independent traders when the market is slack. The middle people in the diamond trade - the rough-diamond cutters - are also held in check, by an extraordinary and elaborate system of "sights" held ten times a year, usually in London, but sometimes in Johannesburg, Lucerne or Kimberley. There, a buyer must accept or reject a complete box of stones selected by De Beers: buyers cannot select at will (60). The system is not foolproof, of course - the near-collapse of 1980 demonstrated that. Nor could it be replicated in any other industry, such is its reliance on what is essentially a mirage. Indeed, if all the customers of De Beers one day decided their necklaces and tiaras weren't worth paste, and put them up for sale, the cartel would sink forever. "Selling a diamond is the last thing De Beers wants you [the public] to do", it has aptly been said (29). In that event the young boy would indeed be vindicated, and the Emperor revealed without any clothes.
Anglo .. bestrides the world .. "Economically (Southern Africa) is still in the hands of the successors to BSAC, ie Anglo-American/De Beers who control most of the nickel, coal and diamond production, about a third of the ferrochrome output and a bit less of copper and cobalt" (61).
... in Africa It was inevitable that, as the Oppenheimer dynasty took root in South Africa, it should seek investments elsewhere in the British empire. Thus, AAC expanded into Rhodesia (later the Central African Federation) and what are today Botswana and Namibia. In 2imbabwe alone by the mid-1980s AAC owned "the entire sugar industry apart from two small refineries, and has commercial interests in four commercial banks, six finance houses, three building societies and numerous other industries ... exerting enormous political pressure too. Anglo-American with its web of interests in the economy ha been particularly successful in lobbying the Government. It has persuaded the World Bank and the cabinet to finance a new power station ..." (62).
AAC had managed to gain control of all three of Botswana's major mines by the 1970s, as well as its breweries, freight services, and milk marketing (3, 24), while, on the eve of independence of Northern Rhodesia, MC companies - and the British South Africa Company (BSAC) (in which AAC held an important share) - virtually held the Zambian mineral economy in hock. After independence, the country's resources were drained by creating Charter Consolidated out of BSAC, Central Mining and Consolidated Mines, and the setting up of Zamanglo (later Minorco) in Bermuda (422).
"Within the corporation," wrote Greg Lanning and Marti Mueller in their classic study of mining in Africa, "the whole of central and southern Africa is regarded as an Anglo fiefdom" (24).
First investment by the Oppenheimers outside South Africa took place in the Rhodesian copper belt in 1924. Four years later, Rhodesian Anglo-American (Rhoanglo) was formed to exploit the "first and biggest" copper field in the British empire (3). Long before the setting up of the Central African Federation, out of Northern and Southern Rhodesia and Nyasaland in 1953, Ernest Oppenheimer had supported the amalgamation of the northern copper belt with the relatively impoverished south, in order to maintain white dominance of the economy in both parts of the region. Three years before this, Oppenheimer had shifted the offices of Rhoanglo, Nchanga, and its Broken Hill operations to Salisbury. Within a few years, the AAC group had acquired the Wankie colliery, set up by Rhodesian Alloys (with British steel maker John Brown), taken over the state's Iron and Steel Corporation, and diversified into sugar, cirrus and cement (24, 63). The move also reduced considerably the British tax liability of the companies involved (63).
Oppenheimer made much of the facilities afforded AAC's black workers in the Federation, and contrasted them with the discrimination and penury to which apartheid had subjected them further south. His motives, to say the least, were mixed: building black mining villages and allowing the operation of black unions served as a safety valve for nationalist agitation. The one thing which Ernest and son Harry could not stomach was black majority rule and "the transformation of Rhodesia into an exclusively African country." (64).
As pressure for independence mounted within the Federation during the late 1950s, AAC, which had previously supported the recalcitrant imperialist lobby at home and abroad, began switching its support from the white United Federal Party, to the nationalists in the north (65). In Southern Rhodesia, however, the story was different: AAC, like RTZ (through its large Empress Nickel mine), and another British conglomerate, Lonrho, stood to benefit from Ian Smith's unilateral declaration of independence (UDI) and either opened new mines or expanded existing facilities, while the regime clamped down on capital and dividends remittance (24). AAC developed its Bindura nickel mine during this period: it was producing 630,000 tons of nickel by 1971 (66). At the same time, much of the mineral production found its way out of the colony, despite supposed UN sanctions. Among the many fronts set up by the mining companies to disguise this theft was Anglo's Swiss agency, SALG.
But it is AAC's role in supplying oil to Smith's band of outlaws which shows its true colours during the fifteen years of UDI. Using its Freight Services (now Rennies Freight Services or Renfreight) subsidiary, it transported Shell oil from Mozambique to Rhodesia and, when independence for the Portuguese colony threatened, set up a complex swap arrangement with SASOL in South Africa, thus freeing South African oil for Rhodesian consumption (3, 24). AAC's role was fully revealed (or as fully as might have been hoped) in the British government's Bingham Report of 1978. By this time Freight Services had spawned no less than 50 subsidiaries and acquired the respected British forwarding agency Davidson Parks and Speed (without the knowledge of its British directors) (67, 68).
When it was clear that the Smith regime was soon to fall, AAC - not surprisingly, and using the pragmatism it was later to adopt in its homeland - began courting the black nationalist leaders of the future Zimbabwe. Oppenheimer took many behind-the-scenes initiatives and ferried black leaders to meetings with Smith in his personal jet (24).
AAC's penetration of Zimbabwe's economy has increased since independence in 1980 - notwithstanding the early determination of Prime Minister Robert Mugabe to send packing those companies (RTZ, AAC and Union Carbide in particular) which had made fat profits under the Smith regime (3). In 1980, AAC had directors on the board of 82 Zimbabwean companies and exerted control over almost half of them (3). Three of the country's largest concerns - Bindura Nickel, Zimbabwe Alloys and Hippo Valley - are administered by Amzim. Moreover, AAC operates the country's only coal mine, the Hwange (Wankie) colliery, and has interests in a wide range of other products and services, including agriculture, timber, food-processing, milling, ethanol and financial services (3). Through RAL Holdings and AECI of South Africa, it controls the production and distribution of fertiliser.
In concert with RTZ and Centametall in Zug, Switzerland, AAC has also been involved in an elaborate system of "toll refining" the country's nickel production which, through transfer pricing, has resulted in the country losing perhaps 20% of its mineral income (3).
The nickel "scam" involved Botswana's Selebi-Phikwe copper/nickel mine, recently called "the biggest haemorrhage" in Anglo's body, with accumulated debts of 300 million by 1988, and its sales revenue amounting to less than the annual charges on its deferred interest (69). Owned by Botswana RST (a JV between AAC and Amax) the mine has not paid taxes to the Botswana government, and royalties were suspended in 1981. The ore was initially sent to Amax's refinery in Louisiana, to bring that plant up to capacity, much to the chagrin of the Botswana government which naturally wished the refinery built closer to the mine (3). In 1988, the ore was being shipped to Falconbridge's Norwegian refinery (70).
Botswana's only major new mining development for the next few years (37) is, not surprisingly, partially owned by AAC. The government has brought in Soda Ash Botswana (SAB) and AECI to develop the Sua Pan soda ash deposits. AECI (jointly controlled by AAC and De Beers) holds 52% of SAB, with the Botswana government retaining 48% (37).
AAC has had (or still has) operations in much of the rest of Africa, including Angola, Ghana, Kenya, the Ivory Coast, Malawi, Nigeria, Tanzania, Zaire and Namibia. Although AAC was prospecting for uranium in the 1970s, Anglo's main interest in the South African-occupied territory is in diamonds and gold. Consolidated Diamond Mines (CDM) owns the world's richest source of gem diamonds, at Oranjemund on the Skeleton Coast, which has been the object of one of the largest civil engineering projects in the southern hemisphere (3). The company contributes up to 16% of Namibia's gross domestic product and 23% of its income (72). The Thirion Commission, set up in 1982 to examine Namibia's mining industry, excoriated CDM for a range of malpractices, from tax evasion and transfer pricing, to a "scorched earth" policy, whereby the diamond gravels were deliberately overmined ("high-graded") to exhaust their potential before independence (73, 74). Thirion also found that -"almost unbelievably" (74) - the Diamond Board of South West Africa allowed De Beers to export and assess the value of all its Namibian gems without any check by the administration: hardly surprising, given that the Secretary of the Board was also the Company Secretary of CDM (74)! The Commission made wide-ranging recommendations, including that the Diamond Board should be entirely reconstituted and take possession of all mined diamonds; that mining companies should be prevented from monopolising and profiting from leases which they don't mine. Interestingly, Thirion also advocated small-scale mining as an alternative to the depradations of CDM, with a data bank and possibly a mine school being established (74). CDM came out fighting (75), seeking to make a distinction between the "good mining practice" which all companies followed in a sellers' market, and the overmining of which it had been accused. It claimed that the life of the Namibian deposits was being continually extended by prospecting, and that it could provide information on taxation, so long as this was in camera: something which Justice Thirion rejected (75). The South African-appointed Turnhalle administration later exonerated CDM of the Thirion charges, though many observers were convinced by them (3, 76). In 1989, CDM announced an expansion, with new mines at Auchos and Elizabeth Bay (near Luderitz) capable of producing nearly 300,000 carats (72).
CDM is also linked with AAC in a gold prospect near Karibib, in south-west Namibia. Called the Navachab project, it first came to public attention in early 1987, when the Namibian Water Affairs Department began searching for scarce water supplies for a future mine (77). Later, Namibia's Secretary of Water Affairs predicted that the cost of water for this low-grade deposit, with a 13-year life, would alone be around US$10 million (78, 80). Initial ownership of Navachab was said to be: AAC 53.34%, CDM 33.3% and Amgold 13.36% (79). Later it was announced that AAC and Rand Mines, in a JV called Metall Mining Corporation, had acquired 20% of Navachab, which suggests that Rand bought into the project, rather than that AAC had surrendered control (80).
In the Americas Although US Big Money has progressively - if slowly - pulled out of southern Africa in the last decade (81), South African capital has flown in the other direction quite dramatically, and resulted in South African control of existing North American institutions (82). By 1981 AAC was the largest single foreign investor in the whole of the USA (8). Five years later, it had acquired 143 separate investments in northern America - 106 in 32 US states, and 37 in Canada, including 24 manufacturing businesses and an investment banker (83). In 1988, AAC and GFSA's overseas holdings represented more than 30% of their total deployed investments, and Amgold's investments were particularly lucrative, thanks to their listing on "many international exchanges and AAC's quality as a gold "fund" (81).
However, Amgold's investments have not led to any dramatic new mining developments, although Minorco and IRC did announce in 1988 a limited partnership to explore for gold in North America, called the Western Gold and Mining Co Limited Partnership (Westgold) (84) which has been producing from an open pit mine at Austin, Nevada, and an off-shore placer deposit in Alaska (85).
In contrast, AAC's mineral exploration in South America has yielded important potential riches and given the corporation key leverage in the economies of Brazil and Chile in particular, but also Peru and Argentina. The corporation's vehicle for penetration of South America was initially Empresas Consolidas Sudamericanas, a Panamanian company representing the Hochschild interests, in which AAC bought 40% in 1981 (3). Three years later, AAC, De Beers and Minorco bought out the remaining 40% and, with that purchase, acquired most of the assets of Consolidated Mining and Industries (86). The following year, Empresas Sudamericanas controlled virtually all AAC's South American interests (87). Two years later, and in the face of Brazil's ostensible banning of military, academic and sporting links with South Africa (3), Empresas Sudamericanas was renamed the Anglo-American Corporation of South America (AMSA), with a subsidiary, Ambras, handling the Brazilian assets. Initially the take-over gave AAC access to Brazil's Codemin ferronickel mine, and interests in fertilisers, carbon black, industrial phosphate, gypsum, niobium, iron ore, cashew nuts, ranching, banking and explosives. AAC's strategy was to purchase existing and potential gold mines - a move foreshadowed in 1973, when AAC established Ambras in Rio de Janeiro and made the former head of the Cabora Bassa dam project in Mozambique its Brazilian chief (88). AAC also ensured De Beers's continuing monopoly over world diamond resources, by gaining the support of Brazilian entrepreneur Agosto Azevedo Antunes, who had previously worked with Hanna and Bethlehem Steel (88). By 1982 AAC had become the biggest holder of foreign prospecting rights in the country (88), and by 1989 was estimated to have 45,000 square kilometres under concession (89).
The Brazilian government in the late 1970s set up two commissions to look at the role of foreign mining and business interests in the country. Their findings boasted one of the longest titles ever given to a government report (90). However AAC had smoothed its path by wining and dining the editors of Jornal do Brasil and O Globo, and Harry Oppenheimer was received by President Geisel. The government decided that AAC was a good bet and would bring the country much-needed capital with which to develop its fledgling mining industry (88).
It was the Morro Velho gold mine in Minas Gerais that was to prove AAC's springboard into the country. In 1979 Ambras bought 49% in Siderugiga Hime, part of the Bozano Simonsen banking group, led by a former minister, Mario Simonsen (3). Bozano Simonsen's 1% share in Morro Velho was fleshed out to 51%. This majority ownership was too much even for the Brazilian regime which, in 1980, refused government funding to develop Morro Velho and two years later took steps to reduce AAC's holding. AAC now appears effectively to own 49% of Morro Velho (91).
Morro Velho's contribution to Brazilian gold production has been dramatic. From a failing performer in the 1970s, it was turned around to become the country's most important producer. In 1986, it delivered some 7 tonnes of glittering riches - about half of the country's total production (71), and two years later 9 tonnes (16). AAC also spent US$60 million exploring a gold prospect at Jacobina in Bahia, which was incorporated into Morro Velho (88). In 1988 Ambras was granted an option by the Brazilian company TRV Minera, cao Ltda to earn 50% in a deposit in Goais (92). But it is another deposit in the same state, at Crixas, which may prove even more extensive than Morro Velho's, though initial production will be around 3 tons/year (80). Called the "largest primary gold deposit discovered in Brazil" (16) Crixas has reserves of around 70 tons (16, 92). AAC bought out Kennecott's 50% option on the project (now held by Amisa) and is partnered at Crixas by Morro Velho and Inco Gold (93, 230).
Crixas opened in late 1989, while the Jacobina mine underwent a major expansion at roughly the same time, tripling its ore output (423). Meanwhile, MCE exploitation of older gold workings, in a huge complex around the Nova Lima area of Minas Gerais, is yielding a modest, but growing, output from deposits at Mina Grande, Faria, Queirox, Raposos and Cuiaba (423).
In early 1990, Morro Vehlo's managing director, Juvenal Felix, announced that - with exploration costs running at up to US$5 million a year - the company was likely to be opening up a new bedrock mine in the Amazon rainforest region (423).
Two other aspects of AAC's dominance of Brazil's gold production should be noted. One is that the company has been not merely a sleeping partner, but instrumental in supporting the Brazilian government policy of removing small-scale and indigenous miners (garimpeiros) from gold workings, which might get in the way of the corporate operations. This was spelled out by AAC in its house magazine in 1984: "... the activities of the unemployed-turned-goldminers is seriously hindering the development of some capital-intensive mining methods. The nature of Brazil's gold deposits is such that mining might be carried out in some areas using open-cast pit methods, while in other areas only underground methods are feasible. Either approach requires that the area be clear of small-time miners" (94).
The second aspect has almost gone unnoticed, though it dramatically underscores both the apartheid regime's connections with AAC and the continued close collaboration between South Africa and the Brazilian government, typified by trade aid and nuclear exchanges in the 1970s, which a return to democracy has apparently little disturbed. In late 1988, the South African regime despatched a team of mining engineers to develop Brazilian gold mining techniques. It was a "low profile" visit, said South Africa's Ambassador to Brazil, so as not to embarrass the South Americans (95). "Low profile" or not, the exchange produced rich dividends for AAC in Brazil. Several Brazilian technicians now train in South Africa at AAC's expense and, with the help of the parent company, a substantial technology centre has been opened up in Nova Lima, where 20 technicians are studying the development of bacteriological processing of gold (423). The total staff at the Nova Lima complex is a staggering 6200 people - making it perhaps the most significant corporate gold centre outside of South Africa.
Establishing Empresas Sudamericanas gave AAC an entre into Chile's biggest privately-owned copper company, Empresas Minera Mantos Blancos, which is second in terms of output only to Disputada (16). Initially AAC held 72% of the mine with the Hothschilds, the World Bank holding 12%, and various Chilean investors the other 16% (96). More recently Cominco and Falconbridge moved in to share Mantos Blancos with the IMF (World Bank) and the AAC (16). The mine underwent a major expansion in 1988 with new roads and exploration (16).
AAC is also partnered with Cominco (26%) and the Chemical Bank (16) in the Marte gold prospect near Salar de Maricunja (97), which was due to begin production in 1988 (98). Other Chilean prospects include Inca do Orro quite close to Salar de Maricunga, a silver-gold deposit near Marte (91) and other deposits at Soledad, Escondida, Valy, Malia, Cacique and Capiche (91). In 1988 AAC was also drilling for gold at Lobo, in a JV with Anaconda (91). To round off this resume of the corporation's South American forays, we should take note of the Arcata silver mine owned by Empresas Sudamericanas in Perus (103); the fertilizer operations of Petrosur in Argentina (103); and the fact that the two most active gold exploration companies in Argentina are St Joe (Fluot) and AAC, with interests in the Hualcamayo gold deposit in La Rioja, and elsewhere (100).
..."Down Under" Both for political and practical reasons, AAC has maintained an "extremely low profile" (101) in Australia and the Pacific region. The political motives derive from an obvious sensitivity to strong government-led revulsion against apartheid. (During much of the mining industry's expansionist phase of the late 1970s and the early 1980s in Australia, Prime Minister Fraser was rattling his sabre against the evils of the South African regime while doing little about discrimination against Aboriginal communities.) The practical reason is quite a simple one: its own exploration ventures have never been successful (102). For instance, it managed to miss locating the Argyle deposit in the late 1970s even though its Stockdale subsidiary was busy in the same region (103), and its Blue Spec gold project had a "brief and disastrous career" (103) before being shut down in the 1970s.
Anglo's strategy has, therefore, been to walk quietly, act stealthily and buy as much as possible into existing Australian-led ventures. Certainly Renison Goldfields, a subsidiary of Consolidated Gold Fields (UK) has been a target of AAC, not only for its considerable gold reserves, but its majority (62.24%) share in the world's biggest single mineral sands producer, Associated Minerals Consolidated (AMC) (104). The dramatic failure of AAC's protege Minorco to gain control in 1988/89 of Renison's parent company (see section below) may mean that AAC will concentrate on buying into smaller projects in future.
Among its Australian interests have been a 40% share in the Mount Morgan gold tailings reclamation project managed by Peko-Wallsend in Queensland, which it acquired in 1983 (105) and a half share in the Walhalla (north-east Victoria) exploration venture started three years later (101). In 1984 Steetley Industries sold out to AAC, giving the company industrial mineral sources in New South Wales, Queensland and Victoria, as well as in South Australia (106). The same year, the company reported low grade alluvial deposits on a prospect in New Zealand's South Island which it didn't deign to develop due to the low price of gold (107).
Another tailings venture in Fiji seems not to have been developed; nor does a "promising" porphyry copper deposit at Namosi, on the island, which AAC located in the 'seventies along with Amax and Preussag (108) . Its major interests in the region now seem to be the Kaltails project, along the famed Kalgoorlie "golden mile" in Western Australia, which involves extracting gold from ten dumps in the area (102) but only at marginal profit. In 1987 AAC floated AA Pacific with the Kaltails project as its most important (60%) subsidiary: the Western Australian state government in 1987 acquired 15% of the venture (through Goldcorp) and Poseidon (a company in which AAC has a significant stake) (118) later moved in (109). By early 1988, the project had run into opposition from environmentalists and was not finding the water it required (102). The scheme finally started up in 1989 (109).
AAC's Stockdale subsidiary (owned by De Beers, with Ashton Mining holding 28%) was one of the first companies attracted to the Kimberleys, by the hope that its mineralogy (similar to its namesake in South Africa) would yield fabulous gems. (It also explored a nickel deposit near Turkey Creek in the same region in 1977) (110). Stockdale's explorations covered the Pilbara (111), the Daly River Aboriginal reserve and Keep River in the Northern Territory, and the Nullagine diamond field (Australia's oldest) which is partly covered by the Jigalong Aboriginal reserve (112). Stockdale soon acquired 70,000 square kilometres of leases in the West Kimberley region. Its explorations at this time were so extensive that the chair of Northern Mining (later the junior partner in the Ashton Diamond JV) was quoted as saying he saw "Oppenheimer under every bed!" (111).
The Aboriginal people of Oombulgurri, where Stockdale came to concentrate its search, were solidly opposed to the company's incursions (111, 113) especially after it trespassed onto the Forrest River Reserve (114). They eventually banned the company from their land (115). Stockdale is still active in the region, particularly at Bow River reserve, and is allied with AOG (28.33%) and Aberfoyle in the Australian Diamond Exploration JV, managed by Ashton Mining in the Northern Territory (NT) (116). But during the last decade its parent has been able to vicariously cash in on the world's largest diamond mine.
The ostensible vehicle for the process was Ashton Mining Ltd, which is controlled by Malaysia Mining Corp Bhd (46.3%), then owned substantially by Charter Consolidated plc (13.83%). Ashton controls, along with CRA, the Argyle Diamond Mines JV (for further details see CRA). Since both Ashton Mining and CRA are longstanding friends of De Beers, it is not surprising that, when De Beers itself mounted a concerted public relations campaign to bring the Argyle deposit under its feoff (117), it met little opposition from the two major companies involved. More surprising is that Australian politicians (of both major parties) should have succumbed - after initial posturing against apartheid - to its blandishments. In fact, it was only when two researchers, Jan Roberts and Les Russell (Boolidt Boolithba) exposed the AAC hidden strings behind both Ashton and CRA (at the time Charter also held at least 8% of RTZ, which controlled CRA) that opposition to De Beers began to register in Australia. By then it was too late. The CSO had shaken hands with CRA and was to end up with 75% of the gem, and 95% of the industrial diamond output from the most important diamond find of the twentieth century (3, 115, 120). Evidence suggests that CRA is offering the Argyle output to De Beers at prices lower than it might have secured had it gone the way of Zaire and broken away from the CSO (121). There are also grounds for believing that De Beers was determined to secure control of marketing from Argyle, not simply because it threatened the CSO's hegemony, but because it needed an alternative supply with which to "blackmail" any black South African government, should it seize AAC's own diamond resources in South Africa (121).
Anglo's output: gold "Gold remains the central focus of the group" commented the Mining Annual Review in 1989, referring to the AAC itself. Although this is a narrow view of what constitutes the Oppenheimer dominion, there is no doubt that South Africa remains the world's largest gold producer, and AAC is far and away the apartheid state's biggest producer. AAC companies (including crucially the two gold producers in which AAC holds major shares, GFSA and JCI) contribute around 70% of the country's production (3).
Nonetheless, the price of gold has fluctuated considerably since its big "high" in 1980 and, in the past two or three years, has experienced a real decline (122). South African costs have been rising - especially labour costs as a result of black trade union activity, ore grade falling, and mines are being plumbed to deeper and more dangerous depths (123). Gold provided nearly half of the apartheid state's export earnings from 1980 to 1987, but the country's share of western world output declined from around 70% to 44% over the same period. In an attempt to offset the slide, a South African government tax commission proposed tax reforms and incentives to gold mining in 1988 - although they did not find favour with everyone (124).
The imposition of sanctions - particularly by the USA - and the withdrawal of US investment (125) has naturally worried AAC and other South African producers or investors (one of which, the Cookson group, put the bulk of its holding into a new company with AAC in 1986 in order to sidestep any bans) (126). However supplies continue to be "laundered" through Zurich to Italy (127). Huge amounts of gold, both official and "illicit", have entered Taiwan. In 1988 the country received officially 330 tonnes, but the actual amount could have been twice as much (128). Little wonder that South Africa's public relations front, the World Gold Council, has been expressing considerable anxiety that South African production, rather than declining, could be outstripping demand, thus contributing to the decline in prices (127). Nonetheless AAC's strategy has been to press ahead with expansions which would have made any smaller company blench, or (perhaps literally) fall apart at the seams. In 1985 it opened up "the largest single mining project to be undertaken in the world" (129) when it expanded production at Western Deep Levels to South No.l shaft, at a cost of US$27 million (130, 135). The following year, the company announced that its exploration boom would last a decade, with seven new gold mines opening in the Orange Free State and West Witwatersrand, another one likely in Bloemhoek/Welgelegen, and yet another in the Kalkoenstroom/Doornrivier area (131). Ergo also increased its gold and uranium tailings treatment output (132). In 1987, Rand Mines and AAC opened up another gold mine near the eastern Transvaal town of Barberton, inside the Kangwane "homeland" (133). A "significant break with tradition" occurred in 1988 (134), when AAC brought on stream a small heap leaching project at Carletonville, in the west Rand (134, 135). The same year Vaal Reefs and Western Deep Levels underwent further expansions (16, 34). Though secure in its preeminence at home, AAC has also aggressively searched for and exploited untapped deposits elsewhere in the world. To this end, as mentioned, it has managed to cash in on the biggest Brazilian gold project (Morro Velho), move in on highly prospective deposits in Chile and Argentina (16) and recently open a new gold mine in Namibia (Navachab) (16).
So long as AAC enjoys its highly lucrative strategic links with Johnson Matthey and Engelhard (sole suppliers of gold bullion to the London market) (3), so long as sanctions continue to be partial and ill-applied, and so long as "discreet" (3) links remain with the USSR and other eastern European producers, AAC's dominance will not really be under threat.
The origins of AAC as a gold producer date back to 1937, when the West Rand Investment Trust (WRIT) was established to group together the principal gold mining interests of AAC and its associate companies. A few years later, the Orange Free State Investment Trust Ltd (OFSIT) was formed for a similar purpose, and in 1972, the two companies merged to become Anglo American Gold Investment Co Ltd (Amgold) (136). Although Amgold is not AAC's sole gold finance company (others include New Central Witwatersrand Areas, DAB Investments, and New Wits Ltd) (3), it is the key vehicle by which the corporation has secured its aegis over the country's major gold mine. In effect, what looks like "investment" is either management control or, through interlocks with other part-owned holding companies, effective control. As Raw Materials Report ably demonstrated in a study released in 1985, if AAC's nominal investment in the country's gold mines is compared with its real ownership, the latter usually exceeds (sometimes quite dramatically) the former. (In the case of Western Deep Levels, for example, by nearly 7%) (137). Crucial to this strategy has been AAC's majority ownership of JCI, and its considerable holding in GFSA. Until GFSA sold some of its equity to the Rembrandt Group in 1987 (138) (partly in order to avoid sanctions) (3) and until the Minorco/Consgold battle royal focused world attention on Anglo's relationship with its only rival mining finance house in South Africa (see below), AAC and Consgold between them held around 70% of GFSA. (Moreover, even after the Rembrandt take-over, there was speculation that this huge conglomerate could offer its GFSA holding to AAC - "Rembrandt's conservative labour policies go down well with conservative politicians," remarked the Financial Times at the time) (138, 139).
The largest single producer in the Oppenheimer domain is Freegold, centred around Welkom in the Orange Free State. Free State Geduld, President Brand, President Steyn, Welkom, and Welkom Holdings, were amalgamated, bringing five mines under one corporate structure, along with eight metallurgical plants (140). (Initially a sixth mine, Jeanette, had been included) (141). AAC holds 48.6% of Amgold which itself owns around 20% in each of the mines, as well as having direct holdings in each of the companies (ranging from 2.2% in Free State Geduld to 16% in President Steyn as at 1986) (142). The mines are run by Freegold (Free State Consolidated Gold Mines) but two other holdings companies, Orange Free State Investment (Ofsil) and Welkom Gold Holdings (Welkom) hold 51% and 5% respectively of Freegold, while Welkom itself owns 30% of Ofsil (143, 148). Initially announced as a practical arrangement - pillars between the existing mines could come down and be mined (144) AAC's motives in making the merger were clearly more devious and self-serving.
Mining chiefs in South Africa immediately welcomed news of the merger (145). During 1984 and 1985 the five mines delivered 110.3 tons of gold, which was 10% of the western world's total production (142,143,148). AAC claimed Freegold could be producing 133 tonnes/year until well into the next century (144, 146) and when the merger was sealed in 1985, the London stock market toasted its success (147). The South African government initially objected to the merger, since it reduced income tax (148), but later approved it. However, US shareholders weren't happy (150), at least initially. (British and north American shareholders are not permitted to hold more than 5% in any gold stock and they feared the scheme would commit them to holding funds in mines of variable quality (151). In the event, they rallied round) (148, 150).
By 1988, Freegold was showing good results, despite the 1987 NUM-led strike (152). But the alarm bells were already being sounded: Johannesburg Stockbrokers, Mathison and Hollidge, warned that South Africa's gold mining industry was "... in an advanced state of senescence". Production costs at US$260 an ounce were more than a quarter higher than those in the USA (69).
Anglo's output: platinum Even if AAC's predominance in gold production slides, there are still two mineral resources over which AAC will continue its global dominance. Of course, the Oppenheimer clan's interests in a vast range of other materials and services cannot be gainsaid, but it could only hold the rest of the world to ransom over the supply of diamonds and platinum. Platinum in recent years has enjoyed an unprecedented boom, as demand for a variety of purposes - ranging from autocatalyst manufacture, to new legal tender coins, to a tremendous upsurge in Japanese platinum jewellery - has outstripped production (152, 153, 154). In 1988, the vast majority of the western world's platinum (and platinum group metals) output came from just one country - South Africa (2,560,000 ounces out of a total of 2,800,000). The only major non-western producer, the USSR, supplied a mere 400,000 ounces (16, 153).
Of the four platinum producers in the apartheid state, Rustenburg - with three mines in the Bushveld, the Atok mine (Lebowa Platinum) (155) in the Lebowa "homeland", and several other deposits under its control (153) - is far and away the world's biggest producer. However the company is more secretive than most: production and sales figures are not issued (164). It is well geared to take up the expected 30% increase in production over the next decade (157), and to continue dominating the world's refining and sales markets through Engelhard and Johnson Matthey (see below).
Rustenburg is owned 23.79% directly by AAC, 8.25% by Lydenburg Platinum Ltd and 32.6% by JCI. JCI is nominally 48.2% owned by Anglo - itself more than sufficient to give the Oppenheimers control. In fact other holdings certainly increase Anglo's dominance of JCI to well over 50% (3).
Anglo's output: coal Despite the rising costs of South African production - freight charges in particular - AAC is the country's largest producer of coal. In 1988 and early 1989 it confounded predictions that exports would be hit by costs and sanctions when it increased sales and cut expenses (for example, awarding wages to black miners well below the inflation rate) (16).
Over the last five years, Amcoal and associated AAC collieries have fared well, except for a dramatic fall in exports during 1987 (16, 37, 158, 162). 1985 provided a particular boost to AAC's fortunes, leading the Financial Times' Kenneth Marston to ask, "if the South African economy is in such bad shape, how is it that Anglo turned in its best-ever profits of R990.4 million in the year to March 31st?" (159).
South Africa's coal reserves are vast - they could last another 200 years at current output (164) and are AAC's second most important export after gold (164). But export figures do not represent the full importance of the mineral to Anglo's fortunes, since the majority of production is absorbed by three South African parastatals: Escom (the Electricity commission) AAC's most important single customer (3), Sasol (the coal to oil producer which has been crucial to the regime's side-stepping of oil sanctions) (161), and Iscor, the steel producer (16, 100).
AAC's involvement in coal mining stemmed originally from the need to supply cheap fuel for gold mining - it was not until the 1970s that both the export and internal boom commenced (162). The Anglo American Coal Corp (Amcoal) controls thirteen collieries in the Transvaal, Orange Free State (OFS) and Natal. (In July 1987 it opened the New Vaal colliery in the Transvaal, which is one of the largest in the country, producing 15 million tonnes a year) (163). GFSA itself runs three collieries, and a fourth with Gencor (3), while JCI through Tavistock Collieries - also administers three mines, and a fourth with Total (3). In addition, AAC itself runs directly the Vierfontein Collieries which supply the power station of the same name (3).
Since South African coal has to compete with new suppliers from Australia, Columbia and elsewhere (159), and is the only mineral to have been substantially affected so far by international sanctions (45), long-term prospects are not entirely rosy (164). However, a prevailing favourable US Dollar/Rand exchange rate has worked to the company's advantage, and, while Denmark, France, West Germany and Japan have instituted partial or complete bans, Spain, the Netherlands, Israel, Britain, and most far eastern markets, continue to import (16).
In 1987 the South African coal industry - representing Gencor, Rand Mines as well as the Amcoal/AAC collieries - set up a Bureau in London to promote sales to the British CEGB (165). The move was supported by several Tory MPs, four of whom in 1989 visited South Africa and exonerated the industry's industrial relations. In a rather surprising (though somewhat oblique) condemnation of their report, the Mining Journal pointed out that the MP's had given "no indication of any black workers actually being promoted to positions of responsibility directly senior to a white miner" (166). "What is certain," continued the Mining Journal, "is that the report's authors have hardly added to their prestige by failing to admit within the report that all four are Conservative MPs" (166).
It is also important to note that AAC's Zimbabwean mining corporation, Amzim, administers and 23% owns the country's major Hwange (Wankie) colliery and runs Botswana's Morupule Colliery which supplies Botswanan power stations (3).
Anglo's output: uranium Along with JCI, AAC controls some 71% of South Africa's uranium production. However, sanctions were instituted from the beginning of 1987 against direct imports into the US and Canada of southern African uranium. They began taking their effect that year and in 1988. In addition, legislation implementing the Free Trade Act between the US and Canada freed an important log-jam in uranium supply to the world's biggest consuming country and led to a drop in prices (16, 167). In 1986 the major AAC uranium producers had rescheduled their uranium contracts before the ban took effect and, as the balance between supply and demand started to gain a certain equilibrium (168), Freegold (169), Vaal Reefs and Western Deep Levels all chalked up a handsome profit (168), with the Ergo plant treating just under 20 million tons of tailings and producing 160 tons of uranium (171).
Two years later, however, South African production was in the doldrums with firm future sales of only 15,000 tons uranium (against 41,000 expected three years before) (172). That year Driefontein, Randfontein, the Harmony mine, and the Chemwes project, all ceased uranium production (16). These four combined had produced around a fifth of Nufcor's output that year (173).
Although Ergo opened a new treatment plant at Daggafontein in a JV with East Daggafontein Mines in late 1987, the company had no new plans to produce yellowcake until 1997 (174). Similarly, Sallies (South African Land and Exploration Co Ltd - AAC effective ownership around 45%) was contemplating its own extraction of uranium from slimes in 1984, but four years later there was nothing (128).
Nonetheless, AAC has benefited from the parlous state of the uranium industry in one major respect: Vaal Reefs mine (always by far the country's largest producer) picked up contracts from failed producers, had a higher recovery grade, and coughed up 1886 tons of uranium in 1988 compared with 1677 the year before (16). AAC (19.1%) and De Beers (9.5%) also have a share in the RTZ-managed Palabora mine, which is a minor uranium producer (17G).
But long gone are the days when "almost in a fairy godmother fashion, uranium has come to the rescue of many gold mines at a time when the gold price has slumped" (177). In the late 1970s AAC's uranium activity was in the ascendancy: it had exploration projects in Saskatchewan and Manitoba (though no significant discoveries appear to have been made) and in Zimbabwe (Rhodesia) in the Kariba area (178). In the Karoo area, AAC had a JV with Enusa; in Namibia it was exploring for uranium with Minatome and Aquitaine around Swakopmund, and two areas around Luderitz (108).
The prospect for AAC's uranium production is not good, despite the status of Vaal Reefs, and the fact that an unknown proportion of the output has (notwithstanding sanctions) been exported to Europe, processed into uranium hexafluoride (UF6) and then shipped to the USA (see Rossing for more details). Tighter US legislation, industrial action in Europe, combined with open access to Canadian supplies, and a continued surplus of uranium on the open market, may mean that South Africa's uranium export industry all but ceases to exist within the next ten years. (As long ago as 1965, the South African government had proposed a trilateral deal whereby the US, South Africa and the Congo would barter uranium and De Beers diamonds for agricultural equipment. When the US government discovered who was involved it stopped the deal on anti-trust grounds) (179).
Of course there is still an internal market, supplied by Nufcor, for the apartheid state's own "civil" and military reactors. As one of the major partners in NuCcor (29), the AAC will benefit from the South African nuclear industry, so long as there is one.
The Minorco saga Sometimes dubbed AAC's "overseas flagship" (175), Minorco was to be the Oppenheimer vehicle for the biggest attempted take-over in mining history in 1988/89, when the company tried to increase its already considerable minority holding in CGF (Consolidated Gold Fields) and mount a full bid. The Minerals and Resources Corporation (Minorco) had its origins in the company Ernest Oppenheimer established in 1928 to finance the expansion of the Rhodesian copper belt (3). Headquarters were transferred to Northern Rhodesia (Zambia) in 1954, and a decade later the company was renamed Zamanglo (Zambian Anglo-American) when Northern Rhodesia achieved independence.
Before independence, Zamanglo had enjoyed virtually unrestrained repatriation of its profits. Even after independence, thanks to adjustments made to its accounting policies, the company managed to export about three-quarters of its profit in dividends (3). Thanks to tax concessions, freedom from exchange controls, good management contracts, and generous compensation granted when the Kaunda government took over 51 % of the company - now renamed Minorco - it could shift its base to the tax haven of Bermuda. It had, declared Kaunda, "... taken out of Zambia every ngwee that was due to them" (180).
By 1980, Minorco had built up an appreciable stake in Consgold (181). The following year its assets were 2 billion - larger than its parent's (US$2.5 billion). Within the next four years, Minorco's forays into North America (and to a lesser extent South America) secured for it: 22% of Phibro-Salomon, 29% of Engelhard Corporation, 60% of Inspiration Resources Corporation (IRC), 36% of Charter Consolidated, and between 11% and 25% of Anglo-American do Brasil, as well as 10% in Empresas Sudamericanas Consolidadas (99). It also held 10% of the Anglo-American Investment Trust (Anamint), 60% of Imetal, considerable minority interests in Australian Anglo-American and half of Zambian Copper Investments (156).
In 1983 Minorco had reduced its holding in Phibro-Salomon to 22.3% - arousing speculation that it might use the realised cash to buy a controlling stake in CGF: both CGF and Minorco denied the rumour (182). Two years later, Minorco sold 10 million shares in Phibro-Salomon, reducing its interest to 14% (183) and was swimming about in US$400 million cash (184). Phibro was still Minorco's biggest asset - around 40% of its net value -and despite undertaking to pull out of South Africa, Phibro refused to buy back the shares held by Minorco (185). Then, in what the Mining Magazine termed an "incestuous transaction", Minorco in 1986 bought 49% of Adobe Resources from IRC (Minorco then held 59% of IRC) (186). The following year Minorco (now held 39% by AAC and 21% by De Beers) reduced its equity in IRC somewhat further - to 56% (187). In 1987, it sold its share in Anamint to De Beers - thus enabling the world's premier diamond exploiter to secure a firmer hold on its diamond trading companies (188). (Two years earlier, Raw Materials Report had speculated that Minorco might join up with Union Miniere, since the companies held diamond interests in common - notably through Sibeka, and in the Argyle diamond JV in Western Australia) (137).
1987 was an important year for Minorco. After an intricate and hugely lucrative tax "scam" was exposed by Dutch krakers (squatters) and the Aktiegroep Splijt Apartheid, who "raided" the company's small Amsterdam office disguised as bankers and left with hugely incriminating documents (189), it changed its domicile from Bermuda to Luxembourg (becoming Minorco Societe Anonyme of Boulevard de la Petrus). However, the main reason for the move was not further tax evasions: rather it was to guard against the impact of sanctions against AAC's assets in southern Africa (187, 190). Possibly too, Luxembourg was chosen because, like the insignificant town of Zug in Switzerland, it harboured other nominal corporations intent on evading existing sanctions (such as Nulux, jointly owned by Nukem and RTZ Mineral Services). The company also sold all its remaining shares in Phibro for US$808 million - a "major breakout" by the "Anglo American empire" as the Mining Journal called it (191) which, coming before the big stock market crash of October that year, "effectively doubled the buying power of an already impressive nest egg" (192).
With assets valued at around three billion US dollars, cash holdings alone of one billion dollars (193) and operations in six continents (160), Minorco was now solidly in the Big Time. It said it wanted only "major active stakes" in future projects, with a sharpened focus on precious metals: Luxembourg would give a "more realistic" base for running its expansion programme (192). It was therefore hardly surprising that, within the year, it was on the rampage after one of the biggest prizes in mining: Consgold.
Before turning in some detail to this particular, extraordinary saga - one which apparently put paid to AAC's attempts to dig for itself an unassailable bunker in North America, Britain and the Pacific region - it is important to look briefly at its earlier march through some vital western financial institutions, primarily in the USA. Within months of buying an initial minority stake in Consgold in 1980 (see later), AAC was using Minorco to take over and build up a substantial stake in Engelhard Minerals and Chemicals Corporation. In 1981 Engelhard was split, and its commodities trading arm, Philip Brothers, amalgamated with Salomon Brothers into a new entity, Phibro-Salomon (194). At one fell swoop, the world's biggest publicly-owned marketer of raw materials had gone to bed with America's largest private investment bank and the world's largest bond trading company (3). Commented the Financial Times, "[Observers say] [it] will be the most formidable trading house in the world, combining skills in virtually all commodities, financial and physical, with a client list that includes governments and most of the biggest corporate names around the globe" (195). The Oppenheimer initial share in Phibro-Salomon was 27%, reducing, as we have seen, over the next six years, until all the shares were sold by 1987. Apart from using Phibro as a cash vehicle, the Oppenheimers had to smart under criticisms from the growing anti-apartheid lobby in the USA (3).
Not so for Engelhard itself - which has proved too vital as a processor of precious metals (3), a world leader in speciality chemicals and metallurgical techniques (196) with even a kaolin project in Georgia (84). The original link-up with Anglo has been called an event of "decisive importance" which marked "... the restoration of foreign confidence in apartheid capitalism" (8).
AAC and Engelhard have benefitted mutually from their partnership. The company's eponymous founder was a friend of both Presidents Kennedy and Johnson (as well as being a model of Ian Fleming's Goldfinger in the James Bond novel of the same name) (3): little wonder then that, in 1986, despite the US Treasury's ban on the import of krugerrands to the USA, it was Engelhard which got a new minting contract to supply gold bullion (198).
But perhaps the most important single aspect of this relationship has been Engelhard's production of catalytic converters for motor vehicles, a market which in this new "green age" has boomed. It is Rustenburg's platinum which is the major source for the American corporation (3), as well as being the world's single biggest supplier (153).
Engelhard first acted jointly with AAC as far back as 1958 when they took over Central Mining - an important South African gold producer with interests in Canada - to prevent GFSA doing the same thing (3). Later, Engelhard assisted AAC in taking up a 14.5% stake in Canada's Hudson Bay Mining and Smelting (Hudbay).
Hudbay was eventually to become a subsidiary of Inspiration Resources (199, 200), with exploration ventures in the Flin Flon-Snow Lake region of Manitoba (copper-lead-zinc-silver) and gold exploration elsewhere (201). Initially, however, the Canadian company was to have been a subsidiary of Plateau Holdings, a company set up to facilitate capital access to US and Canadian markets for Minorco and AAC (202).
By 1983, IRC was Minorco's main "operating arm" (203), with copper mines in Arizona (200), ownership of Inspiration Coal, Terra Chemicals and Trend International Ltd which drills for oil and gas in North America, Paraguay, Indonesia and the North Sea (3, 199). However, IRC has not been a runaway success story. Although its interests remain in Trend and Terra, and it has acquired Danville forestry and printing businesses, Minorco had to "save" the company in 1984 by pumping in US$100 million so that IRC could purchase Madison Resources' oil interests (204). More recently, Minorco itself had to buy back the oil and gas investments (3). Both companies formed a partnership in 1988 to search for gold in North America (but which major resource company by this time hadn't done so?) (205) though this is no indication that IRC will ever rise above the middle ranks.
In 1988 and 1989, Minorco participated in "the biggest, longest-running, and probably the most complex, take-over bid yet seen in the UK" (206), when it tried to buy out Consolidated Gold Fields (CGF/Consgold). The bid was officially launched in September 1988, and set at nearly three billion pounds (2.9 billion) (207). News of it had reached CGF several weeks beforehand (208). Consgold's reaction was immediate and combative. Within a month, it was demanding an inquiry into insider dealing in its shares (209, 251); had asked President Reagan to block the bid - on the grounds that important rutile, monazite and zircon reserves would pass into South African hands (210); and had taken Minorco to court in New York for violation of the anti-Trust acts (211). The European Community said it would investigate whether EEC rules had been breached (212); the South African regime launched its own inquiry into the bid (213); Australian Prime Minister Bob Hawke attacked the Minorco stratagem, as did the Governor of Ohio - both on the grounds that important strategic resources would come under South African control (211,213,214). The Australian associate company of Consgold, Renison Goldfields, threatened to sue both its parent and Minorco, alleging breach of the Australian Companies and Acquisitions code (215, 236). And, at the end of October that year, the British secretary for Trade and Industry referred the whole matter to the Monopolies and Mergers Commission (216), (239).
The battle was to grind to a conclusion eight months later, when Lord Hanson offered just over 13 billion for Consgold, after agreement that Minorco would sell its near-30% stake in the British-South African company to the rapacious Knight (217).
In the meantime, a battle of words and documents had been enjoined between the two erstwhile fellow-travellers over apartheid terrain, which left no expletive unturned (218). In presenting itself as a maiden about to be seized by the 'Orrible Oppenheimers, Goldfields' own appalling history of exploitation in South Africa came under scrutiny (219). Hence, in its early days fighting off Minorco, Goldfields desperately attempted to present an anti-apartheid front, and a readiness to sell off its interests in GFSA (220). But it was Minorco and Oppenheimer/De Beers which undoubtedly came off worst in the cerebral encounter. No-one could be left in any doubt at the end of the day that Minorco was AAC's major overseas vehicle for expansion and sanctions avoidance, and more importantly that the Oppenheimer empire was firmly rooted in the mire of South African racialism.
In terms of historical fact, the connection between AAC and CGF has been more than a flirtation. That formidable, damnable imperialist, Cecil Rhodes, founded both CGF and De Beers using capital acquired from exploiting cheap black labour, and cheap black coal. The notorious Jameson Raid, intended by Rhodes to unseat Boer power in southern Africa, was financed by CGF's ill-gotten gains, and it was only when that criminal escapade ended in dismal fiasco that control of CGF ostensibly passed to London (221). From 1968 onwards, AAC and CGF parried each other's thrusts, as the Oppenheimers stalled at least four attempts by Goldfields to take over another South African mining house (222). During this period, both the companies diversified increasingly, and moved capital out of South Africa to projects overseas (221).
Probably in response to a widespread rumour that Gencor was preparing to take over CGF/GFSA itself (223), De Beers conducted a much-criticised (224) dawn raid on the London stock market in early 1980, and built up a major stake in Goldfields (181). The following year, when AAC/De Beers underwent a major restructuring, this 28.9% share was passed to Minorco (194, 225). Now Minorco became AAC's "major merchant venturer" outside South Africa (226), and clearly posed a massive threat to Goldfields. According to Congold's chair, Rudolph Agnew, Harry Oppenheimer at that point promised that AAC wouldn't increase its holding in Goldfields to more than 30% (222), and - apparently amicably - the companies swapped directors (221). An "uneasy peace" prevailed from 1981 to 1984 (221), but frictions had already emerged when AAC began stalking Newmont in 1981. By then, the American company- already the single largest US exploiter of black southern African labour (3) - was passing into the Goldfields camp. When the Texan corporate raider, T Boone Pickens, lurched onto the horizon in 1986, Newmont allowed CGF to build up its equity to 49.3% (227).
By 1986, relations between the two predators were at "rock bottom" (222). According to Agnew, AAC was threatening to sell its Goldfields stake elsewhere, so Goldfields was forced into "merger" talks with Minorco (228). Agnew demanded that Minorco's South African ownership be scaled down. "We argued very strongly," he claimed, "that serious companies did business in serious cities and this did not mean Zug" (222).
In 1987, Minorco published its own version of the 1986 discussions with Goldfields. Declaring itself "very surprised" that Goldfields had not agreed to a merger at this time, Minorco accused CGF of allowing GFSA and Driefontein themselves to acquire up to 7.8% in Goldfields as a "buffer" against the AAC overseas arm (229). (It was also clear that if Minorco and GFSA chose to act together, their stake in Goldfields would climb over the 29.9% level which, under British take-over rules, would compel them to make a full bid for the London company.)
In order to reduce its huge debt, Newmont also sold off its holdings in O'okiep, Palabora, Tsumeb and other southern African companies. While the Gamsberg zinc deposit changed hands from Anglo to GFSA, Newmont's interest in Palabora passed to AAC and De Beers (16, 93, 187, 231). Over the next two years, Newmont Gold (80%) was to develop into one of the world's most important producers - and the biggest in the USA. While the American management tried to maintain a fairly disinterested stance during the Minorco bid for its parent company, it clearly did not favour being thrown to the wolves yet again: Minorco said it would sell Consgold's 49% holding in Newmont, if it gained control of CGF (232). The British Department of Trade and Industry (DTI) had been in no doubt about the insidiousness of the 1981 take-over. "In acquiring a quarter of the company's shares, Anglo misled Congold's management, manipulated the London Stock Exchange and flouted the British Companies Act which subsequently had to be amended" (233). The secret buying, declared the DTI, had started in 1979, with AAC using secret subsidiaries and holding companies, particularly De Beers. Though Harry Oppenheimer allegedly feared a US take-over of Consgold (234), Anglo's real concern was that Old Mutual (which controls Barlow Rand) or Sanlam (Federale Mynbou) would mount a bid. Minorco's ostensible objective in grabbing Consgold was spelled out in September 1988 by its chair, Sir Michael Edwardes - formerly at the helm of British Leyland and Chloride. Consgold's 38% (direct and indirect) investment in GFSA would be sold, as would CGF's 22% of Driefontein, its 26% in Kloof, 16% in Doornfontein, 38% in Deelkraal, and its 46% holding in the Northam platinum mine (235). If not sold outright, CGF's equity in Newmont would be "substantially reduced" (221) . Minorco would be built into one of the world's "leading natural resources companies" (221). Financial commentators were not so sanguine. Some viewed the bid as simply a massive asset-stripping operation, designed to break up CGF once and for all, and which "thoroughly undervalued the company" (80). Others were convinced that - largely because of AAC's costly gold mining in South Africa and poor record at finding new deposits in North America - it wanted access to Renison Goldfields' highly-valued new deposits in Australia and Papua New Guinea. Certainly Renison was aware of the threat, and so was Prime Minister Namaliu of Papua New Guinea. "We cannot allow the apartheid regime to benefit from our rich resources," he declared in 1987 - referring specifically to Renison's third-part holding in the Porgera deposit (227). Renison's chair, Max Roberts, the following year expressed similar fears that the company's assets in Tasmania (the Mount Lyell copper mine), the Philippines and Indonesia (where RGF holds 75% of the Kola tin mine, boosting its share of western world tin output to 10%) (237) might go down the same nefarious path (236). In October 1988, RGF went to court in Australia in an attempt to stop Minorco (238).
But it is Renison's key role in the supply of mineral sands (it is the world's largest producer, delivering 30% of the west's titanium oxide, 40% of its monazite, and 45% of its zircon) which could have been Minorco's greatest prize. AAC has no mineral sands operations worth speaking of (merely a 5% holding in Gencor which owns the vital Richards Bay Minerals deposits dominated by RTZ). Just after Minorco made its play for Consgold, a detailed report on the world mineral sands industry, prepared for the Dublin-based company Kenmare, showed that world demand for zircon would outpace supply until 1994, as the strategic mineral found new applications in electrical ceramics (and the world's nuclear industries). Its price was calculated to increase dramatically, while in 1988 it was reaching no less than A$2000/tonne on the spot market ten times the price at the start of the decade (239, 240).
Initially the Monopolies and Mergers Commission (MMC) looked as if it was only going to scrutinise Minorco's play for mineral sands (197). Later, it was clear that the MMC would investigate the "insider dealing" which had brought the South African company to within grasp of one of Britain's three most important mineral producers (RTZ and Lonrho being the other two). (Consgold's British assets - especially the Amey Roadstone Construction Group (ARC) - were an admitted major plum in the pie into which Little Micky Edwardes wanted to get his thumbs) (241).
The DTI had started in 1986 its investigation of American Barrick Resources Ltd's build-up of 9.7 million shares in Consgold (228). Despite the name, Barrick is a Canadian company, with an important gold prospect at Carlin in Nevada, next to Newmont's own claim (242). Although Barrick maintained that the 1.37% interest it had acquired in September 1988 (243) was a "passive" one, it was a company which did not seem entirely unconnected with AAC. Early the next year, as Minorco made its second bid for Goldfields, it was revealed that the London stockbrokers James Capel - solidly pro-Minorco (244) - had breached the United Kingdom Take-over Code, when it bought, sold, then repurchased Consgold shares on behalf of Barrick (245). In June, James Capel and Smith New Court were charged with refusing to divulge who they bought shares for - ie American Barrick (246). Most of the speculation over secret share build-ups in Consgold centred on Oppenheimer's Swiss connections and in particular Vadep of Barr (part-owner of Britain's popular "Tie Rack" retail outlet) (247), which by late 1988 had built up 1.8% of Minorco's equity. Vadep's sole director is to be found on the board of six De Beers companies (248). In addition, Capricorn Trustees held six million Minorco shares, and a London-based investment outfit called Primadonna (sic), aligned to AAC, held further assets in the company (248, 249). Early in 1988, Consgold was protesting that Swiss interests in CGF, plus other dubious "friends" allied to Minorco, could secure more than a 50% control in the London company (250). In October Consgold demanded an inquiry into how a Swiss Bank co-operative (including a 75% owned subsidiary of the British Midland Bank, with undoubted Oppenheimer alliances) could have secured two million Consgold shares (209, 252). At this time, CGF issued a document attacking AAC, claiming Minorco's take-over would result in the dismemberment of the company (253). It also released to selected journalists a formidable batch of documents, mostly secured in the USA under the Freedom of Information Act, alleging De Beers assistance to the Nazi regime during the Second World War, and attempts to cut the vital flow of industrial diamonds to the allied "war effort" (254). The British financial press speculated that CGF would also be looking for a so-called "white knight" to stave off the South African threat: RTZ was mentioned, but discounted once it over-stretched itself in buying BP Minerals (255) (see RTZ); so were the Hanson Trust and Newmont itself (256).
Meanwhile, CGF was promising it would pull out of South Africa altogether (257), and filed documents in the US maintaining that the Oppenheimers were bent on control of the world's gold market and posed a direct threat to domestic US resources (particularly Newmont's) (258). In late October, the New York District Court issued a temporary injunction against Minorco raising its stake in CGF to more than 30% (259, 315).
1989 began with the MMC confirming it would expand its probes to include the relationship between Minorco and AAC (260). The Oppenheimers by now owned between 60% and 70% of Minorco (261) and possibly as much as 71% (262). In its own investigation of the company, the London-based Anti-Apartheid Movement identified Oppenheimer interests of around 46% in Consgold, not 40% as AAC would have the world believe (261). Although Minorco soon moved in on Charter Consolidated (in which it holds 36%, while Charter itself holds 4% of Minorco), purporting to take it out of the Oppenheimer camp (263) and presage a reduction in AAC's grip on Minorco, anti-apartheid researchers were convinced that the Oppenheimers could gain control of more than half of Consgold (221, 263) . True Battle Royal was the order of the day in the first six months of 1989. In early 1989, the Chemical Bank of the US said it would no longer finance companies in South Africa - but excluded its facilitation of the Minorco bid, with the facile argument that the company didn't have direct South African interests (264). As rumours circulated that the MMC would clear the bid, so long as Minorco sold off the Newmont and Renison acquisitions (265), the Luxembourg company confirmed its re-entry into the lists, and was negotiating with both Rembrandt (which had recently acquired substantial stakes in GFSA) and Gencor, to dispose of their joint 38% holding in GFSA (266).
The British Office of Fair Trading was starting to examine whether De Beers shouldn't be referred to the MMC for its dominance of the diamond industry (267), but, almost immediately afterwards, the MMC cleared Minorco for the final assault (268, 274). In a unanimous finding which British newspaper, The Independent, called "breathtakingly dismissive" (269), and which the British Labour Party deplored (270), the MMC refused to await the findings of the DTI into AAC/De Beers oligopolistic practices, declaring that neither the British gold nor strategic metals markets would be adversely affected by a take-over, and that any threat of an increase in boycotts against British operations once taken over by Minorco (specifically ARC) was not sufficient to hold up the take-over (270, 271).
Two weeks later, the European Economic Community's (EEC) informal inquiry - which had concentrated on the threat to platinum markets - also cleared the bid, although it demanded that Minorco should sell Northam, the platinum field developed by GFSA (269, 272). The US Appeals Court was not so willing to be led by the nose: it demanded that the bid should be considered further (273). Meanwhile Minorco was preparing a new, record offer of 3.2 billion (274). Edwardes confirmed that Minorco would break up Consgold beyond recognition: Consgold retorted that this was "financial terrorism" (275). A few days later, in a vain attempt to sweeten the offer, Oppenheimer, joined by three other Minorco directors, left the Luxembourg board (276). Consgold then issued its Defence document (277), but refused to confirm CGF's asset value (278). Early the next month, the State of Michigan announced that it would sell all its Minorco shares - representing 5.4% of Minorco's holding in Consgold (279). By the middle of March, GFSA and Driefontein said they would refuse any conditional bid for their holdings (280), and the first closing date for the offer passed with only 0.2% of CGF shareholders accepting the Oppenheimer blandishments (281). On 22 March, the US Appeals Court confirmed its injunction against Minorco, saying it "... is hard to imagine an injury to competitors more clearly of the type the anti-trust laws were intended to prevent" (282). Nevertheless, the US Committee on Foreign Investment found that a take-over wouldn't bar access by US companies to strategic minerals (280, 283). Consgold now declared that, if its integrity were preserved, it would issue shares with a guaranteed good return, or a special cash dividend attached (170). The pledge didn't cut much ice, was later thrown into doubt (284), and then dropped (285).
Minorco's final bid for Goldfields was slated at L15.50 a share - over fourteen times CGF's expected 1989/90 earnings (286). Naturally CGF rejected it - more importantly, an estimated half of CGF's institutional shareholders were reckoned to feel the same way (287).
Confronted by an offer from Minorco to set up three separate US companies, run by court-appointed Trustees, the US Appeals Court's Judge Mukassey countered: "The Anglo group's record in circumventing legal restrictions and engaging in anti- competitive behaviour is not reassuring" (288).
For the next month, the scene of action shifted to New York (289). Although Minorco had taken 54.8% of Consgold by the end of April (290, 291), both Consgold (290) and Newmont (292) were determined that it would not prevail - this, notwithstanding a UK Take-over Panel's demand that CGF should drop its New York action (293). By May, Newmont had become the key player in the game. Just as it announced it was recapitalising Peabody Coal (49.9% owned) (294), Minorco seemed desperately to be seeking a buyer for the CGF holding in the American company: this could clear it for a final assault on Consgold itself (295).
As the US Appeal Court refused yet again to lift its injunction, Minorco apparently admitted defeat (296, 303). The stock market wiped L 100 million off the value of Consgold shares, and the company was landed with a 50 million end-of-battle bill (297).
On 22 June, Lord Hanson, after a "friendly chat" with Consgold's Rudolph Agnew, stepped in to pick up the (gilded) pieces, offering L3.5 billion (298), which was accepted by CGF.
As a result, Minorco got lots and lots of money (around one billion pounds) with which it could buy up Charter Consolidated if it wished (299) - a company in which Hanson himself had acquired 7% by 1984 (300). Dubbed "one of the most fearsome corporate predators on either side of the Atlantic", Hanson had already swallowed up British Ever Ready batteries and the UDS retailing chain, as well as Imperial Tobacco in 1986, balancing this with sell-offs of acquisitions like Smiths Corona, John Collier Menswear, and the Courage brewery (299). Hanson looked likely to strip Consgold just as Minorco would have done: retaining ARC and selling the GFSA share to Rembrandt (301), or to Gencor, itself owned 28% by Rembrandt (298). Gencor had recently boasted spectacular new growth, including the acquisition of Mobil Oil USA (298). Renison would be auctioned off- possibly to WMC or CRA (298), as would the shares in smaller South African companies (301).
Had it all been a souffle? Or worse, a massive diversion of public attention from the real issues? One curious anomaly to the affair was that Consgold and its supporters argued, almost in the same breath, that Minorco posed a threat, as a Trojan horse for Oppenheimer/South African penetration of its British, North American and Australasian interests, and was an asset-stripper of the worst kind. Either Minorco was an outpost of the "Evil Empire", or (as Edwardes fervently protested) it was simply running its own ship: it would be difficult (though not impossible) to have it both ways. In the event, Hanson's intervention was far from that of the stereotypical "White Knight": the British peer was primarily interested in making money. The South African Emperor was interested in expanding control, dominating key markets and evading the consequences of future possible sanctions. However, Minorco was certainly squeezed into a corner - not by the half-hearted and defective rationalisations of the British Monopolies and Mergers Commission (paper tiger if ever there was) but by the zealously defended protectionist complexions of the US judiciary. So, in the final event, had Minorco gained control of Consgold it would almost certainly have divested itself of the key strategic interests it acquired, whether it really wanted to or not. The global mining map will probably not look much different in a few years time than if Oppenheimer had won the Consgold battle after all. And what of Consgold's main lines of defence? It postured variously as a Saint on the road to Damascus, a damsel in distress, a Great and Inviolate British Institution, and a bulwark against apartheid. None of these images fit. Despite its Pauline conversion to disinvestment from South Africa, Consgold held on to the bulk of its apartheid interests through the whole period of the Minorco gameplay. Its claim that Oppenheimer's attentions were wholly unprovoked and undesired sits uneasily alongside its willingness to negotiate with AAC after the 1981 Minorco bid, without securing any defences against a future bid for the whole company. As for its claim that CGF is compatible with. BP, Lonrho or RTZ, this could never be seriously entertained for an outfit which was founded in South Africa, secures so much of its profit from the region, and whose investments (apart from ARC) have contributed virtually nothing to the British people - not even the British Exchequer. But the biggest lie was the proposal made in all seriousness by Consgold's Rudolph Agnew, that CGF was a different kind of employer of South African labour than its main rival; that the anti-apartheid lobby should regard it as an ally. "Which is the worse of two gold evils?" asked the Guardian in a pointed editorial in 1988, concluding that there was little to choose between them (302). Consgold operates like AAC in South Africa, the paper declared in May 1989, and has similar interests. "... It is regarded by some experts as a worse employer of black labour than Harry Oppenheimer's Anglo American empire..." (303). The anti-apartheid movement was not taken in. In a report issued by End Loans to South Africa (ELTSA) in October 1988, conditions at the Tsumeb copper mine in Namibia were depicted as "shameful" and "appalling", with workers poisoned by arsenic, lead and cadmium discharges, and conditions at their hostels among the most degrading in the country (304). At Consgold's AGM that year, campaigners mounted a spoof boxing match between "Rippling Rudolph Agnew" on the one hand and "Mad Mike Edwardes" on the other - with "PW Botha as referee" (305).
Unfortunately, amid the hullaballoo and sparring, one key point got lost: rather, it was never made. The encroachment of Oppenehimer's empire into Europe would undoubtedly have secured vital dividends for the South African apartheid state, and helped perpetuate the regime (306). But of themselves, these returns may have been only marginally more important than the dividends already filling the coffers from AAC's existing international trading enterprises.
If we want increased access by the world's poorer communities to its resources, then concentrating the production of certain strategic minerals or precious metals under one corporate body is something devoutly to be feared and resisted. However, AAC is already in a key-hole position when it comes to platinum supply. And the world's largest producer of titanium and zircon is now RTZ, whose track-record in southern Africa and among indigenous peoples worldwide is as bad as, if not worse than, that of AAC. De Beers's dominance of global diamond production is ably assisted by RTZ, through its associate company CRA in the Australian Kimberleys. It was perhaps only in its search for new gold deposits where AAC had sustained a very poor track record, and - through its entre into Renison and Newmont - that the western world's biggest single producer could have recouped its position as a leading supplier (307). Yet from early 1989 there was no question that Renison would leave the Anglo camp (308), while Newmont's resistance to a Minorco takeover was never in doubt. (But, as already pointed out, when the American Company took the decision to disinvest its southern African interests in 1988, its stake in the important Palabora mine passed to AAC which, once again, found itself in harness with RTZ.)
In fighting off the predations of a manifest despot, the institutional, protectionist, and, to an extent, anti-apartheid forces which lined up behind Consgold may have simply been pawns in a game - whereby the most crucial mineral assets on the planet passed into the hands of a clutch of more shadowy, but no less damaging, corporate imperialists, RTZ and Hanson being chief among them.
A Charter for Consolidation It is through Minorco, with a holding of 36%, that AAC controls the operations of Charter Consolidated. Formed in 1965 as a merger between a "rag bag of assorted companies" (309) including the British South Africa Company (BSAC), Central Mining and Investment Corp (an Engelhard company), and Consolidated Mines Selection (associated with Anglo since 1917), it was to become AAC's main holding company until Minorco took over that role in the early 1980s, "eas[ing] the penetration of areas where Anglo American's direct South African connections could be embarrassing" and would impede financial support from bodies such as the World Bank (309). Charter therefore advanced into the USA, Britain (a joint project with Imperial Chemical Industries ICI - in potash), Canada, France, Australia, Malaysia, Portugal and Mauritania (3, 24).
The Oppenheimer strategy was to secure at least 10% through the British-registered company in each investment Charter made, in order to benefit from double tax relief. (The trigger for establishing the company seems to have been AAC's need for it to place its initial Hudbay stake with a non-South African company) (3). In its first three years of operation, Charter accrued a capital of US$324 million. Its investments have included a significant minority interest in RTZ (at least 8%, reduced considerably in the 1970s), the Cape Asbestos group of companies in both South Africa and Britain (24) and participation in a consortium in Zaire's Shaba province during the 1970s which was later shelved (24). As already noted, it had until 1987 a substantial (13.8%) stake in the Malaysian Mining Corporation which controls Ashton Mining.
During 1983 and 1984 Charter embarked on an expansionist phase within Britain which gained it control of a major Scottish coal-mining equipment company, the country's most important precious metals refiner. Anderson Strathclyde was the firm for which Charter made a bid that was strongly resisted: in its defence document, the Scottish company exposed Charter's connections with AAC (six out of fifteen directors were Oppenheimer appointees, two of the others directed Anglo companies) in no uncertain fashion (310). Charter won control, thanks partly to the efforts of the Kuwait Investment Office (KIO), itself an ally of Phibro-Salomon (3), but was forced to cut back on its operations in Britain to a certain extent (3).
Charter's investments currently include 33.5% in Anglo American Corp of Zimbabwe, nearly 30% of Rowe and Pitman - stockbrokers to the British Queen - 75% (Umetco 25%) of a Portuguese tin and wolfram mine (200), joint ownership with AAC of the north Yorkshire miner, Cleveland Potash (16, 200), and the Alexander Shand coal mining company. (It also holds 3.8% in Minorco itself.)
But the jewel in its dubious crown is Johnson Matthey plc (35%), a company with which AAC has long connections dating back to 1884, when JM assayed the first Witwatersrand gold find (3). One hundred years later Johnson Matthey Bankers collapsed, after illegally exporting money from Nigeria and making a number of bad loans. As JM's largest single shareholder, Charter offered to inject new money into the ailing giant, so long as the Bank of England and other banks took the dead wood off its hands. The ploy succeeded - a remarkable coup given that Charter should have been held responsible for JMB's bad deals, not speculating out of them.
Johnson Matthey plc owns, jointly with Rustenburg Platinum (itself substantially owned by AAC and JCI), the capital of Matthey Rustenburg Refiners Pty Ltd (MRR), which operates two platinum refineries: one at Wadeville, South Africa, and the other at Royston, Hertfordshire, in England (200): this plant is the world's largest of its kind. MRR is also building a refinery in Bophuthatswana, one of the South African "homelands" (311). Johnson Matthey is in the curious position of refining copper for the Oman Mining Co LLC and shipping back the gold and silver extracted for sale in the country's souks (200). JM is the sole international sales agent for Rustenburg Platinum: it has the industry at its fingertips (153).
The Oppenheimers: agents of apartheid or seeds of its destruction? Whole volumes have been inscribed (313) which tackle the question: is the Oppenheimer dynasty (which no-one denies) responsible for perpetuating the world's most entrenched system of racial inequality (which few would deny), or is it the country's prime economic agent for change?
Certainly modernisation (high technology, advanced communications, free movement of capital across borders) leads to new relationships between bosses and workers, creates new economic classes (black entrepreneurs, shareholders, managers) and leads to certain political shifts. But the process itself is not a liberating one. (It could be argued that the Nazification of Germany in the 1930s and '40s was a prime example of modernisation) (314).
The real question to ask is whether the structural changes which the AAC has definitely brought about in the South African economy have led or will lead to an empowerment of the black majority. The corporation's record of recent oppression of the NUM (examined in detail below) reveals the proverbial mailed fist underlying the velvet glove. Certainly, AAC is neither an agent of the South African government (in many respects the opposite) (315), nor an advocate of an unchanging apartheid system. From its earliest days the need to bring cheap, plentiful labour to the gold and diamond mines and, more recently, to keep it there, brought AAC into conflict with the white miners (312). But it is not an advocate of black majority rule, let alone one accompanied by nationalisation of the mines or banks. The Oppenheimer recipe for peace in southern Africa is a pragmatic bundle of strategies and alliances calculated neither to promote a truly independent nonaligned South Africa, nor alienate a nascent black entrepreneurial class; it is aimed at convincing the outside world (particularly in the USA and Europe) that sanctions will hurt black workers and risk damaging the institutions required for a viable non-apartheid, free enterprise state (316). Perhaps, above all, it is intended to project the Oppenheimers as the true face of liberal, white capitalism. What is good for AAC must be good for South Africa. Little wonder that the Afrikaner/Broederbond-dominated body politic has rarely found common cause with the clan, and - as the days of reckoning for the regime come thicker and faster - appears to find AAC almost as threatening as the ANC. (As in 1985, for example, when a team of businessmen led by Gavin Relly, chair of AAC, met exiled leaders of the African National Congress) (317).
It is important not to view the influence of the Oppenheimers in southern Africa as a single band, continuing uninterrupted over the past eighty or ninety years. Ernest was more closely identified with the institutions of apartheid than his son Harry, and there are differences of style and emphasis in public declarations between him and his own son Nicholas. Ernest Oppenheimer supported racially separate housing, the compound system, bantustans: indeed most of the rubric of so-called "petty apartheid". In a speech in 1957, he declared there were "very good grounds for discrimination in South Africa. There [are] different backgrounds, and the legitimate right of the white worker to have his standard of living protected" (318). While he supported blacks having "an effective share in government," this was clearly to be government of the lower echelons. "Above all," he warned, "we should not put uneducated people, still in a semi-barbarous state, in charge of a developing country like South Africa." A "self-respecting Native middle class," he added, was "the perfect guarantee against lawlessness and Communist agitation" (318).
Oppenheimer was fairly obsessed with the dangers of communism, especially one wearing a black skin and destroying the zealously guarded institutions of white South Africa. "Black nationalism is a major danger to the unity, security, and property of South Africa," he once stated (63, 319).
His son Harry hardly differed. Though he was to take a lead in opposing the Group Areas Act (because it put a brake on economic growth using black labour) and a formative role in the Progressive Party (later the Progressive Federal Party, PFP) (8) his watchword was "reform not revolution". In 1984, he claimed that universal suffrage would lead to "chaos and disorder": votes should be restricted to "an elite" (320).
Harry Oppenheimer retired from De Beers in 1984, having pulled the cartel out of its worst trough this century. His son, Nicholas, became deputy chair of De Beers and chair of the CSO. Julian Ogilvie Thompson moved to the main seat at the diamond corporation (321). Gavin Relly, an Oppenheimer man for most of his life, became chair of AAC in 1982.
Zach de Beers became leader of the Progressive Federal Party in 1988 (322).
Between them, Relly and Zach de Beers have consolidated the main planks of their predecessors: increased support (through bodies like the Urban Foundation) for black enterprises and cleaning up the townships (323); opposition to sanctions, (324, 325); campaigning against the Group Areas Act and similar apartheid legislation inhibiting the movement of black labour (168, 325) but refusing to support majority black rule (326).
Labour without love "... the fruits of [their] labours which have, over the years, filled the vaults of Fort Knox, bought houses for the Oppenheimer family, endowed Rhodes scholarships, and provided Elizabeth Taylor with her finery ..." (328).
The price of labour is the biggest single component in the working costs of gold (24). AAC's political complexion - its attitude to government and institutionalised apartheid - has been continually dictated by its need to attract supplies of black labour to the mines, keep them relatively supine, and keep them cheap.
Confronted by an implacable, racist, white miners' union in its early days, and the escalating costs of plumbing ever greater depths for gold, AAC set its teeth against the colour bar (312). The confrontations culminated in a white strike in the early 1920s, which led to the bloody repression of the so-called "Rand Rebellion" (312). From 1911 until 1969, the price of employing white labour in the mines went up 70% - objectionable in itself, but scandalous when we realise that black workers in all that time got no pay increase (329).
AAC's response to the "white threat" was to employ foreign and migrant labour, encouraging the removal of black families from their land, and, through the iniquitous pass laws and Group Areas Act, to maintain a black labour pool near the mines (327). After the Sharpeville Massacre of 1960, however, it was clear to the Oppenheimers that relations between the miners and workforce could never be the same again. If the black labour pool were to be preserved, and the confidence of the rest of the world (the world of gold investors and buyers) not to be shattered, some black demands must be satisfied. "By the late 1960s, growth had become incompatible with the maintenance of labour policies" (312). Within the next decade as the gold price increased in world markets AAC realised that a new skilled black labour force would be required, and wage levels were increased for the "top" 15% of African workers (312).
For a while the recruitment of foreign labour (from Angola, Mozambique, Malawi and elsewhere) and the importation of Chinese workers, answered the need. But between 1974 and 1982, for a variety of reasons (riots, the unreliability of workers from outside, and the independence of the ex-Portuguese territories), non-South African labour diminished. AAC had set itself against the other major mining companies and the government, by withdrawing from wage regulations in 1971 and unilaterally increasing black wages (8). Three years later, as the corporation decided to cut down on immigrant labour, it declared it would open negotiations with black trade unions (330) - a move which was solidly opposed by the regime (331). That year, although Gavin Relly was still advocating the use of migrant labour - with the appalling toll in family separation and human suffering that involves (332) - AAC advocated building houses for black families near the mines (312). Four years later, as the labour shortage eased, the reforms recommended by the Wichahn Commission - primarily the recognition of black unions and establishment of black training courses (3, 312) - were implemented. The white Mineworkers' Union (MWU) reacted angrily and went on strike. (The MWU's paper, Die Mijnwerker, dubbed AAC the 'Advancement of Africans Corporation') (333). For the time being, the colour bar remained in place.
During the early 'eighties, AAC mounted a campaign to scrap the infamous 1911 Native Labour Regulations Act - which, inter alia, prevented black miners obtaining blasting certificates and qualifying as skilled miners (334) - and to abolish racial discrimination in employment (335). Nicholas Oppenheimer declared that the regime had not kept its promise to allow the corporation to build homes for senior black workers (334), and AAC set up LITET (Labour-Intensive Industries Trust) to increase job opportunities for black workers (334). In 1983, Reilly reaffirmed AAC's demand that influx controls must be abolished, because "restricting the supply of unskilled people enhances the demand for skilled labour, and therefore its price" (336).
That year, Reilly also spoke of a "fascinating transition from paternalism to bargaining, with all the implications it has on the psychology both of labour and management" (337).
The black miners strike in 1984 was to transform this "fascination" into the first of AAC's massive dilemmas.
After the South African Chamber of Mines (COM) initiated new negotiations with the NUM over the annual wage award, its offer of a 10% rise (as distinct from 25% demanded by the black trade union) had been followed by stoppages at two Anglo mines; Goodehoop and Kriel. In a demonstration against the COM's "package" at the Company's Vryheid Coronation colliery, a black miner was shot dead (338). Fears were expressed in the industry that the NUM - albeit only 15% of the total workforce in the mines then unionised - might embark on its first legal strike, bringing non-unionised workers with them: "Problems for owners thus created hardly bear thinking about," remarked the Financial Times (338).
Within a month, the "nightmare" was growing apace. During the country's first legal strike at the President Brand and Western Holding's mines in September (both managed by AAC), police used tear gas to drive strikers from dormitories, and beat them so badly that many required hospitalisation: 13 miners later sued the apartheid state's Minister for "Law and Order" for more than US$1 million (339).
The industrial action quickly spread to five other Anglo mines, and in the ensuing clashes with police, ten miners were killed and hundreds injured (340).
Four months later, in early 1985, the NUM made the apartheid system in mining--specifically job reservation for whites, and the refusal of blasting certificates for black workers--their main bargaining counter with the COM for that year. By then, membership of the NUM had grown to 110,000 (339). In April, after the NUM demanded a 40% increase in black wages across the board (119), Anglo sacked four miners at Vaal Reefs. Five hundred miners protested, only to be met by police called in by the management. At least one miner was hit by birdshot or rubber bullets, and died (340). Thousands of miners then struck at Vaal Reefs and Clarksdorp. AAC's response was to sack almost the entire workforce at Vaal Reefs--some 14,400 out of around 16,500 (341). Many of the miners were put on buses to be returned to the Transkei, Ciskie, Lesotho, Swaziland and Mozambique (342). Very soon after, as bombs damaged two of AAC's offices in Johannesburg (341), the company made an offer to reinstate most of the sacked workers, but not before "weeding out" what it called "dissident elements" from those re-applying for jobs (343). NUM leader Cyril Ramaphosa countered that he "... was not aware of miners who were guilty of intimidation and violence" (344). The corporation estimated its loss of gold during this strike at one ton (345), although the losses were to reach four tons by the year end (346). In an interview with the Financial Times, Ramaphosa accused AAC of deliberately trying to break the NUM, but failing; forcing AAC to re-employ the majority of sacked workers indicated Union success. The key issue in the dispute, said Ramaphosa, was job reservation for whites. He predicted violence would increase (347). Within a fortnight, another 19 mine workers had died in what was officially described as "inter-tribal fighting" among Xhosa mineworkers at President Brand mine (348).
In July, as the COM offered a wage increase of between 14.1% and 19.6%, the NUM membership balloted in favour of strike action rather than accept the offer (349, 350). However, individual mines appeared to be offering differing increases (349, 351), while the white Council of Mining Unions (CMU) accepted an 11% across-the-board increase instead of its original 20% demand 351). Vaal Reefs - working at 70% of normal levels since May - began actively trying to recruit replacement workers for the 14,000 sacked earlier in the year (163).
By the beginning of August - despite speculation that it was weakening (353) - the NUM had decided on mass strike action to enforce its minimum 22% wage increase claim. By then, it claimed 150,000 members and was recognised at nearly three-quarters of the 40 gold and coal mines in the country (354). Around 80% of its membership was in AAC mines (355). The NUM also threatened a boycott of all white businesses near mines, unless the state of emergency was lifted within 72 hours - and a national strike if the Botha regime attempted to repatriate the 40% of the workforce recruited from outside the Republic, in response to overseas sanctions (356).
The strike was narrowly averted when the NUM accepted new offers made by AAC which were 2.8% above the level unilaterally embraced by the COM, and therefore close to the minimum 22% the NUM had demanded (357).
However, within three months, mineworkers were taking strike action in non-AAC mines, and at the end of February 1986, 19,000 mineworkers came out once again at Vaal Reefs, protesting at the arrest of ten colleagues charged with murder of four team leaders at the mine, and in solidarity with strikers elsewhere (358). It was unclear whether the NUM officially supported this action, given that it was aimed primarily at the police authorities, rather than management. A sympathy strike also started at the Goedehoop colliery, site of the first legal industrial action in 1984 (346). The Vaal Reefs strike was over without major violence within a few days, after talks between the NUM and management (359), although demands for release of the detained men were not met (360). Then, within a fortnight, another fourteen people were killed, and many injured, in what was, once again, officially described as "intertribal clashes" between Basotho and Xhosa miners at Vaal Reefs (361). The following month, AAC reported that it was beginning to recover from the effects of the previous year's strikes - Western Deep Levels having managed to restore underground workings badly damaged at that time, although lower gold grades were still limiting production (362).
That summer, the government took draconian measures, under the state of emergency, against the black trade unions in general, imprisoning nearly 1000 militant unionists, including the vice-president of the NUM who was also the president of the Congress of South African Trade Union (COSATU). This followed a "final offer" by the COM of wage increases of between 15% and 20%, some 10-15% below the levels demanded by the NUM (which had already modified its demands for a 45% increase that year). The NUM met in secret to decide what action to adopt (363), as 1200 miners came out at the Finch diamond mine of De Beers, following strike action a week earlier at four other De Beers mines (364).
In an event overshadowing even the deaths at the hands of the police, in September 1986 black mineworkers were plunged into mourning as 177 gold miners died in the second biggest mine disaster in the country's history, at the Kinross gold mine in the Transvaal, operated by Gencor. A stay-away protest at this holocaust by 325,000 miners and 275,000 other black workers, in early October, demonstrated not only the gathering strength of the NUM (365) but also the anger with which black workers regard their exploitation in the most dangerous areas of the mines. As a report by a researcher at the University of Witwatersrand, Jean Leger, pointed out: the black death rate in mines is not only far higher than that of whites (a ratio of five to two) but has not materially altered since 1941 (1.96 per thousand that year, and 1.62 per thousand forty-three years later). Although one of the major NUM demands (as evinced in the 1985 strikes, specifically at AAC mines) had been the abolition of job reservation, in fact the industry would grind to a halt were this to be rigidly applied. What happens, reported Leger, is that black workers work in white jobs where whites cannot be found, but without sufficient training or safety measures (366).
Hopes of a settlement between the NUM and the COM rose in October as the union agreed wage increases of up to 19.5% with AAC's gold/uranium producer, Ergo (367). A little later, the NUM lowered its threshold to a 24% demand across the board, while AAC, JCI, Gencor and Rand Mines' gold division increased their offer half a point up to 23.5% (368). In November, yet more miners died in a dispute over the opening of a beer hall at Vaal Reefs (which had been opposed by the NUM) (369). Within ten days, 20 more miners had died at Vaal Reefs during factional fights; the NUM was quite clear that the oppressive, claustrophobic conditions imposed on migrant workers in the single-sex compounds made frustration and tension, leading to violence, inevitable (39).
By the beginning of 1987, more than hundred mineworkers had died from this so-called "intergroup" violence (372) - three-quarters of them at mines operated by AAC. Opinions as to why the violence broke out naturally differed. A researcher for COM, Kent McNamara, partly blamed the NUM for imposing a "you are with us or against the struggle" ultimatum, which deepened tensions already existing between South African-born workers, and foreign workers from neighbouring states (372).
As early as November 1985, AAC and the NUM had set up a joint commission of inquiry into the group fighting at Anglo mines. Entitled Reaping the Whirlwind, the resultant report was leaked to the Johannesburg Weekly Mail in early 1987. The company argued that tensions in the workplace led to violence outside - hardly a novel thesis! But the tensions were ascribed sometimes to "agitators or more radical elements", although the company agreed that linking job status to a particular ethnic group could give rise to conflict. What the company failed completely to recognise (or admit) was that the NUM, far from provoking rivalries imposed by the hostel, migrant labour, and job reservation systems, had simply enabled them to be expressed more openly. In opposing apartheid per se, the NUM was providing the only formula for avoiding internecine and self-destructive violence in future. Anglo was clearly blaming the messenger for the message of doom, because it was unable and unwilling to take on the government itself where it mattered.
In its contribution to the commission report, the NUM cogently argued that not only the migrant system and its attendant evils, but also exploitation by management, were at the root of the violence. "Conditions in the hostels are not only dehumanising but also impose a system of controls upon individuals that make migrants vulnerable to manipulation. Unable to take responsibility upon themselves, workers are put in a defensive situation which predisposes them to violence. The only source of security then becomes the home group and the tribe, and it is the exploitation of this base which gives the violence an ethnic or tribal character" (372).
The NUM also claimed that, while AAC had ostensibly been moving away from compounds on ethnic lines, it "deliberately stalled or even reversed" integrated accommodation, soon after the NUM rose in strength. Not only had AAC been actively trying to destabilise the NUM, it stereotyped a particular branch by the ethnic majority represented within it, thus deliberately fanning sectarian flames. An even more serious allegation made by the NUM was that AAC employed a special force, the Emergency Protection Unit, whenever there were incidents of mine violence, and that it attacked workers along ethnic lines - at Vaal Reefs they "knew which blocks to attack and which ones to leave out" (372). In addition, terror groups known as the "Russians" had been used by the management. At Western Deep Levels they had dressed as Sothos and attacked Xhosa-speaking miners: it was this which precipitated the so-called "faction fighting" in 1986. The NUM also claimed that Anglo had set up a quasi-terrorist organisation called Fito, which threatened the lives of NUM workers, specifically at President Steyn mine, causing the violence there at the end of 1986.
The NUM called for an end to the migratory system and, in the meantime, for AAC to stop exploiting ethnicity within the workforce (372).
In February 1987, NUM President James Motlatsi, revealed that the union was now the biggest in the country (total signed up membership being 344,000, and paid-up membership 227,590). He pledged a total fight against the migratory labour system, and the induna (tribal control) system operating at the mines (352). At its annual Congress a little later, the Union re-affirmed its support for the African National Congress (ANC), for sanctions against South Africa, and nationalisation of the mines (373), although the latter would be approached