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Zama zamas are part of our forgotten economy and their role in mining should be formalised

Zama zamas are part of our forgotten economy and their role in mining should be formalised
Illustrative image: Members from the SAPS's Tactical Response Team (TRT) and National Intervention Unit (NIU) make their way up an old mine dump used by zama zamas, August 2022. (Photo: Shiraaz Mohamed)

With innovative thinking, a secondary mining industry geared toward local economic development and beneficiation could emerge. Existing laws and strategies need to be overhauled to harness the zama zamas’ economic potential.

“Zama zama” is a paradoxical industry. In essence, zama zamas are a direct result of unresolved socioeconomic imbalances confronting one of Africa’s most powerful economies, and of the avarice of mining empires and South Africa’s political system.

The zama zama industry is symptomatic of South Africa’s economic policies that have failed to transform the mining industry from one dominated by global conglomerates and elitism to one that creates shared value and inclusive growth. The World Bank asserts that despite the abundance of minerals and other natural resources which have earned South Africa the reputation of being Africa’s gateway to the world economy, inequality and unemployment remain rampant.

The country has an official unemployment rate of 34.9%, of which 64% are young people, and half of the country’s population lives below the poverty line. The economy is contracting, power outages are at an all-time high, living costs have skyrocketed, towns are disintegrating, and violent crime and acts of violence are the order of the day.

According to Minerals Council South Africa, the country has over 30,000 illegal miners whose illicit activities are worth R21-billion a year. In this there is a paradox as these illegal activities represent lost production, lost taxes, and the potential of formal economic and employment opportunities that the host communities desperately need.

The fact that illegal mining activities are on the rise in South Africa suggests that small-scale mining could be used as a precursor for development of the local economy. This is because large-scale mining companies are demonstrating a steady decline in terms of operations and profits.

With innovative thinking, a secondary mining industry geared toward local economic development and beneficiation could emerge. To this end, existing laws and strategies need to be overhauled to determine novel ways to harness the zama zamas’ economic potential, while at the same time targeting the criminal bosses who orchestrate and benefit most from this illegality.

The current mining legislation (Mineral and Petroleum Resources Development Act) needs to be completely overhauled in order to promote small-scale mining and shared value, and in this way redefine the value chain while stimulating additional investment.

Creating too many regulations without creating an enabling environment for small-scale mining will only perpetuate illegal mining, posing a further threat to sustainability. Recent occurrences show that illegal mining represents a microcosm of a dysfunctional society, as illegal miners not only undermine the rule of law and property rights, but also participate in human trafficking, rape, and the murder of community members.

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In addition to posing a major health danger to the miners and local communities, the physical act of illegal mining is detrimental to the ecosystem.

A further concern relates to the failure of large mining corporations and the Department of Mineral Resources and Energy to restore abandoned mining sites for the benefit of society.  This seems to demonstrate a lack of visionary leadership. Another factor contributing to anarchy is the failure of mining powerhouses to prepare and capacitate employees for life after their operations (layoffs, retrenchment and retirement), resulting in labour exploitation.

A further barrier to sustainability through shared value pertains to the process of granting prospecting and mining rights. This process has been designed in a manner that structurally and systematically excludes the marginalised from meaningfully participating in the economic value chain of the mining industry.

What is clear is that possible solutions to curb illegal mining do not lie in criminalising artisanal mining activities, publishing stories about the arrests made or through political grandstanding. What is required is adopting a broader perspective in terms of sustainability and shared value, and in this way uplifting communities. 

This requires a paradigm shift, particularly on the part of leaders. True transformation can be attained by leaders who are concerned about the impact of current actions on future generations, and who can envision mining dumps as economic enablers. For example, mine dumps could be turned into wind farms, solar farms or agricultural land and used by locals through cooperatives.

Alternatively, a regulatory framework could be developed that recognises small-scale mining as a formal livelihood strategy, and thus part of the formal economic sector.

Another transformative approach would be, as part of mining licence renewal conditions, to require large mining corporations to actively support and incubate emerging miners through meaningful community empowerment interventions (BBBEE imperative).

Furthermore, the conditions for awarding prospecting and mining licences must be streamlined without jeopardising due diligence. Currently, the process of applying for prospecting and mining rights, environmental authorisation, water licences, consultation with communities and land occupiers, and raising capital to finance the operations is fragmented.

In conclusion, there should be sound oversight mechanisms in the mining industry to monitor and control the activities of licensed buyers of stolen minerals. At the same time, government should amplify the security and integrity of the intricate and interconnected minerals supply chain to identify illicit transactions between individual illegal miners, gangs and mining bosses, as well as large-scale purchasers at the national or regional levels who use licensed or registered entities as intermediaries, front company exporters, and foreign intermediary buyers.

Finally, industry leaders must recognise that success is measured not only in billions of profits and tons of production, but also in the positive impact mines have on people’s lives, more particularly on those of the people who dwell in and around mines and who depend on them for income. It is more crucial than ever for leaders to adopt an approach that identifies and enables strategies that promote sustainability and shared value. DM

Dr Talifhani Khubana is a former PhD student in the Faculty of Business and Economic Sciences of Nelson Mandela University. The opinions expressed in this article are those of the author and do not represent those of the university.


Comments - Please in order to comment.

  • Graeme de Villiers says:

    Yeah right . . . dream on.
    Just like the criminal taxi organisations/mafias should be formalised? And pay tax?
    How long have weall been waiting for that little nugget to happen?
    More than 30 years.

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