The truth about South Africa's illegal mining industry
It's a multibillion-dollar transnational business empire with its own financial targets, line managers, security personnel and CEOs
By GRAEME HOSKEN, SHENAAZ JAMAL, JAN BORNMAN, and KYLE COWAN
It's a multibillion-dollar transnational business empire with its own financial targets, line managers, security personnel and CEOs.
The playing field is spread over 6,000 disused gold, diamond, chrome and platinum mines across South Africa.
With a workforce of up to 30,000 people - equivalent to the population of a small mining town such as Carletonville on the West Rand - the operations of illegal mining syndicates run day and night.
Many of the illegal miners are immigrants, often working in conditions reminiscent of slavery.
Illegal mining has been identified as a national threat and a multi-agency team has been formed toco-ordinate government efforts to combat it, says the Chamber of Mines.
Mineral Resources Deputy Minister Godfrey Oliphant told parliament that syndicates were well organised and had up-to-date maps of mining operations.
A big driver of illegal mining is rising commodity prices. It is estimated that about 10% of South Africa's gold production is stolen and smuggled out of the country - about R7-billion a year.
Zaheera Jinnah, a researcher for the Wits African Centre for Migration Labour and Livelihood, said illicit mining was run like a well-oiled machine.
"It's without a doubt a business . a multinational, multi-ethnic enterprise with global reach which, like legitimate businesses, is driven by profit."
Most of those at the coalface are Zimbabweans, South Africans, Swazis, Mozambicans and Malawians.
"Women ... earn R100 a day by grinding up a 20-litre bucketful of rock. They are also paid in kind, getting not only a percentage of the takings from the gold, but also leftover soil, which they can process further." She said men working underground in groups earned far more.
"From their buyers they earn just short of the international price for gold. In a typical week on a bad run they can earn R10,000. On average they earn R50,000 a week, but that can go up to R100,000 if they strike a good gold seam," said Jinnah.
They have networks supplying mining equipment, explosives, munitions and food.
"The miners are just part of a larger syndicate that feeds gold into the formal sector.
"They operate with dedicated buyers who expect certain profits and have national and international demands to meet.
''Everything to do with this industry is structured to maximise profits."
A 2016 UN Interregional Crime and Justice Research Institute report says: "Men and adolescents are often recruited through deception."
Children work as surface miners, rock crushers, transporters and gold washers.
The report says: "Analysis shows that the precious metal mining industry is the victim of organised crime groups with local syndicates connected to larger international operations consisting of Nigerians, Russians, Germans, Indians and the Chinese triads."
The document peels away the syndicate layers, starting with the miners, then "middle management" involved in gold sales, and finally the "high flyers" who have business and political connections.
With huge profit margins comes the need for enforcement - and often deadly reprisals. Since 2012 more than 300 illegal miners have died in clashes for control of mine shafts.
Illegal East Rand miners told The Times that operations were run with enforcers "policing" the mining.
"We have no say. We just follow orders," said one.
"These guys (the enforcers) are cruel. If you become rude they will test the bullet on you. They don't think twice," he said referring to 14 miners killed recently in Benoni.
Another miner said of the "protectors": "With the Basothos, we enter the shafts for free, but with the Zulus you have to pay a R50 entrance fee before you go down and then the 5kg [of gold-bearing] sand when you come out."
He said they refined the gold ore with mercury purchased illegally from pharmacies.
"From 20kg of sand and rock we can get 200g of gold, which we sell for R450/g. The buyers melt it down into slabs, which they sell for R700,000 depending on their size."
The National Union of Mineworkers wants illegal mining legalised "so that these small miners can play a role in the economy and pay tax", said spokesman Livhuwani Mammburu.
The government believes that rehabilitating derelict mines could help.
"We have started strengthening support for small-scale miners and issuing permits for some areas to be mined, with hundreds employed in renewed mining operations," said Deputy Minister Oliphant.