267 Gencor See current profile on BHP Billiton Ltd.
The second largest mining house in South Africa, Gencor was formed in 1980 with the amalgamation of Unicorp/Union Corporation Ltd and General Mining and Finance Corporation Ltd. General Mining was itself taken over by Federale Mynbou Beperk in 1964 - Federale Mynbou being a creature of two Afrikaner investment companies, Federale Volksbeleggings and Bonuskor, who, in 1953, decided to form the first major Afrikaner mining company in South Africa. Federale Mynbou prospered in the '50s, to a large extent because its coal fields were located near two of the large government-owned Escom power stations (1).
Anglo-American had already taken major stakes in General Mining in the '50s: the decision to help Afrikaner capital acquire large chunks of new real estate was largely that of Harry Oppenheimer, Anglo's chairman appointed in 1957. The Johannesburg Sunday Times called the deal "a personal triumph for Mr Harry Oppenheimer" and "an important step forward in his proposals for closer business co-operation across the South African language barrier" (2). The brother of Hilgard Muller, South African foreign minister of the day, became General Mining's general manager.
Both Union Corporation and General Mining were founded by Germans: Adolf Goerz modified the former and the brothers Georg and Leopold Albu developed the latter. For many years both companies depended to a large extent on German financial expertise, and to a lesser extent, capital. Both the Deutsche and the Dresdner Banks invested in the two companies, though perhaps not more than 8% of their capital needs (1).
In fact, until 1974 Charter Consolidated of Britain was the largest single shareholder in Union Corporation, when it dropped out of the bidding for control of the company and General Mining secured dominance with 50.1%(1).
The streamlined Afrikaner mining-finance house of the '80s now owns twelve mines, all primarily gold producers but with four delivering uranium as a by-product. The fortunes of Beisa, the primary uranium producer (with gold as a by-product) have been chequered: it was closed down in May 1984, a bare two years after its official opening (3).
However, the new Beatrix mine came on stream; and other uranium-from-gold producers in the group, Stilfontein, Buffelsfontein and West Rand, continued to make modest progress (4).
In 1983, the company experienced what it called "temporary difficulties'' and determined to proceed with its fairly large exploration programme outside of South Africa, notably in Australia, Brazil and North America (4).
While disastrous falls in the market for blue asbestos - of which Gencor was the world's chief provider - have meant the closure of its Gefco/Griqualand Exploration and Finance Co asbestos subsidiary (4), Gencor continued to hold a roughly one-third interest in the Griqua land group of asbestos producing companies (5).
In Brazil, its gold mining prospects at Belo Horizonte continued to be developed. In summer 1984, Gencor announced that it would bring the high-grade Sao Bento gold mine in Minas Gerais into production by early 1987. The mine is estimated to have a life of 20 years (6).
The group's Australian subsidiary, Union Corporation (Aus), has secured 50% of Consolidated Rutile, an important producer of mineral and beach sands - an acquisition which was met with alarm from environmentalists (4) and opposition by Aborigines (7). Consolidated Rutile specialises in the production of rutile and zirconium (used in nuclear reactors).
Genmin Exploration, another Australian subsidiary of Gencor, has also entered a farm-in agreement (entitlement to up to 51%) in the Yellowdine platinum prospect 34km south-east of South Cross, Western Australia (8).
In Europe, the group owns a portion of Geevor Tin Mines in Cornwall, England, and a share in the Rubiaies mine in Spain (5). Geevor proved an unexpected boon to Gencor (and RTZ : between them the two companies held a controlling interest). As a consuming, not a producing, member of the ITC/International Tin Council, the mines were not restricted by the ceiling price imposed by Third World producers in the association. Consequently they were able to reap "rich benefits in terms of profitability" (9). Although the corporation has tried to diversify and "grow by acquisition" (it acquired an electronics subsidiary called Tedelex in 1983) (4), its base is still solidly within the apartheid system.
Apart from its gold and uranium interests in South Africa, Gencor (51%) has a JV with Union Carbide (49%) in the Tubatse ferrochrome project in the eastern Transvaal. It also operates four chrome mines in the same region (5). Its subsidiary Impala Platinum (second in importance only to Rustenburg) has maintained a price of US$465/ounce, although it has been suffering from the "recess" (10).
The company recently commenced a large-scale drilling programme in the Orange Free State, along with Anglo-American (4).
In 1983 it acquired Utah International's interest in the anthracite project in the "homeland" of Kwazulu (11), with intention to proceed to a large mine, much to the approval of Chief Gatsha Buthelezi, the Bantustan's Chief Minister, and to the chagrin of anti-apartheid groups. The mine was originally envisaged as a joint project between Gencor (through its TransNatal Coal subsidiary) and General Electric's Southern Sphere Holdings. It would have been the biggest investment in recent years by a US company in the apartheid state. Then the Connecticut legislature banned its state pension funds from investing in companies with interests in South Africa, and Southern Sphere sold its holding to Gencor. The mine was expected to provide about 600 jobs and last 22 years (12).
Namibia has been an area of key interest, too. Apart from investigation of the large Langer Heinrich uranium deposit located in 1975 (13), Gencor also has approximately 7% of the huge Rossing Uranium mine which it ostensibly took over from Urangesellschaft in the '70s (14).
More recently, the company has been evaluating the Tinkes uranium orebody (which is adjacent to a uranium lease held by Anglo-American) (14) from which production is planned of 1250 tons/year uranium oxide (15).
Also in Namibia, Iscor (in which Gencor has 48% interest) is the territory's most important zinc producer (13). And Gencor controls (with 83%) the Klein-Aub copper mine, also in the illegally occupied state (4).
Coal is a major interest of the company: in 1982 it held no fewer than 13 collieries, of which nine were in the Transvaal, three in Natal and one in the Orange Free State.
One of these areas, at Springbok in the northern Transvaal, has been the subject of a major investigation by the company into the possibility of extracting uranium from coal (16) . Towards the end of 1979 Gencor reached agreement with Sentrachem, the major South African chemicals company, to participate in the project in return for a 10% interest in Sentrachem (which is now held 8.375% by Gencor, 1.25% by Federale Mynbou and 0.375% by Sentrust). Investigation by Gencor staff delineated four main zones, in two of which lay significant supplies of uranium. However, although the uranium could be leached, burning of the coal would produce refractory ash. Intensive laboratory tests were undertaken to attempt to directly liquify the coal, without gasification to exploit the carboniferous content of the washed coal, and to process the uraniferous ash. In 1980 it was estimated that 18 months would be required before any decision was made on this new (and apparently unique) plant, and that it would take five years before any production (17).
In 1989, Gencor established Genmin (General Mining Metals and Minerals) as the holding company in its huge South African mineral interests (second only to those of Anglo American). At that time the gold division (Gengold) operated 14 mines, including Beatrix, Buffelsfonstein, Stillfontein and Unisel and held significant interests in the Sao Bente gold mine in Brazil (18). Although sanctions and the dip in the gold price have, more recently, taken their toll, with the closure of some of Gencor's operating gold plant (19) and the layoffs of workers (20), a new gold project was opened in mid-1990 in the Orange Free State, at Weltvreden, with a view to comparatively cheap production starting in 1992 (18, 21). Together with Oryx gold mines (owned 63% by Gencor) the company remains fairly well placed to benefit from any relaxations in sanctions against gold (22).
As the second biggest platinum producer (through Impala Platinum - 41% owned) Gencor has also benefitted from the fillip given to this so-called "green metal" by its increased use in catalytic converters for motorised vehicles. In 1990 Gencor offered a significant merger of its platinum mine at Karee in the Transvaal with the platinum interests of Lonrho, the British mining conglomerate - leading to suggestions that the two companies might be about to merge. This would have put Gencor/Lonrho among the biggest half-dozen mining houses in the world (23).
The same year Genco bought out all of Mobil's surrendered oil and gas interests in the apartheid state, which the company - under considerable pressure from anti-racists back home - had disinvested in 1989 (24). In 1989 Gencor's Trans-Natal Coal Corp operated 12 collieries in South Africa (18), while Samancor (Gencor 43.6%) continued to be the most important producer of manganese, exporting 80% of its production (25).
It also continued its mining of mineral sands, through 49% owned Consolidated Rutile (the mining company responsible for exploitation of Aboriginal land at North Stradbroke Island near Brisbane (18) and its 25% ownership in Richards Bay Minerals, the company taken over by RTZ (through QIT) in 1989, which is one of the world's biggest producers and processors of titanium-bearing mineral sands (see RTZ). Another operation at Richards Bay, in which Gencor holds a substantial interest, is the Alusaf smelter (the parastal Development Corporation of South Africa has a 30.7% interest and Alusuisse holds 23% of Alusaf).
Apart from Genmin, the company has four other divisions. These are concerned with forestry products (Sappi), energy (Engen), industrial interests (Malbak) and investments (Genbel). Among Genbel's holdings are a part-share in the recently-privatised state steel corporation of South africa, Iscor (18, 26).
Although Gencor is firmly based in South Africa, in 1990 it announced a bid for the whole of a 240,000 hectare concession in the tropical plains of eastern Bolivia, at Rincon del Tigre, where it was hoping to find platinum (27).
Gencor's reputation as a conservative, hardline, Afrikaner mining house was confirmed during the period of upheaval in the mid-eighties, when the South African National Union of Mineworkers strove to establish itself and defend workers' rights. Many of the deaths and injuries sustained by protestors at this time occurred at Gencor's mines; added to which, the company has the unenviable record of being responsible for the worst gold mining accident in South African history. 177 miners were killed at the Kinross mine in September 1986, following an officially-recognized drop in safety standards (28).
Less dramatic, but more insidious, deaths are still being caused by Gencor's legacy of asbestos mining and the operations of two subsidiaries, Griqualand Exploration and Finance Co Ltd (Gefco : 48.7% owned by Gencor and 15.4% by South African Mutual Life Assurance) and Msauli Asbes Bpk (Gencor 37.5% and South Africa Mutual Life Assurance 15.2%).
Figures leaked to the South African press in August 1984 revealed a "startling incidence" of asbestosis among African workers at the Penge mine, where 110 had been laid off due to asbestosis in the previous ten months. Between 1973 and 1983 some 780 of the mine's employees contracted the killer disease and fibre levels were 65 times higher than the local recommended level in the mill (which was itself about four times lower than the level set in Britain).
In July 1984, 1300 migrant workers at Penge struck for better wages, after a drastic cutback of production by Gefco (29).
Two years later, as the Black Allied Mining and Construction Workers Union (BAMCWU) demanded a ban on all asbestos mining ("Enough blood has already been coughed up on the altar of greed and in the name of profit" declared Barry Calstelman at a BAMCWU conference in June 1985), (30) it was alleged that children as young as 11 and 12 had contracted the asbestos-related disease mesothelioma, from playing on abandoned Gencor tailings dumps (30).
SOURCE: "The Gulliver File - Mines, people and land: a global battleground" by Roger Moody.
Published in 1992 by Minewatch, 218 Liverpool Road, London Nl ILE, UK, and WISE-Glen Aplin, Po Box 87, Glen Aplin Q 4381, Australia.
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