ECONOMY-SWAZILAND:
Loosening the Reins on Mineral Resources
James Hall
MBABANE, Mar 17 (IPS) - The exploitation of Swazi mineral resources has long
been a sensitive area of debate, as the colonial era saw a considerable
portion of these resources being depleted by foreigners. However, the
overtures of a South African businessman might be about to change all that.
Ironically, the hold that mineral resources have on the national
imagination is not equaled by their contribution to the economy. Once
Swaziland's only foreign export, mineral sales accounted for just 0.8
percent of gross domestic product in 2002, the last year for which figures
were available. This is just a fraction of the contribution made by other
business sectors.
Other than some quarried stone that is used in local highway
construction, coal is the only mineral still produced in the country.
Swaziland's gold deposits were largely depleted in the nineteenth century,
while diamond production ended in 1997. Asbestos was mined north-west of the
capital, Mbabane, from 1939 - but the last fibres were removed in 2001.
In addition, the Ngwenya Iron Ore Mine ceased production in the 1980s,
although a railway built to transport ore out of the country en route to
Japan continues to ferry coal.
All Swazi coal - which is currently sold in South Africa - is produced in
one mine that contains an estimated 20 million metric tones of coal, and has
a lifespan of approximately 20 years. Authorities have been very cautious in
granting licenses to extract what other minerals remain.
"It has been a long-time struggle against the resentment of the colonial
legacy, whereby the British and other whites took away the Swazis' mineral
wealth," a source at the Bureau of Mines in the Ministry of Natural
Resources told IPS, adding "It is hoped they will find the confidence in our
black brother from South Africa."
This brother - or "mining guru", as he is being lauded in the press - is
Patrice Motsepe, who has applied for a license to prospect for gold in the
northern Hhohho region. He may also be looking to purchase one of the
existing mines that are currently not in production.
"I can confirm that Motsepe is engaged in talks for the purposes of
re-opening one of Swaziland's closed mines. It is premature to say which
one," Swazi businessman Mpheni Dlomo, who recently hosted Motsepe in the
country, told a press conference. Dlomo is Chairman of the MPD Group of
companies which hopes to enter into a partnership with Motsepe.
The shuttered mines that Motsepe may consider include two coal mines -
and the old Dvokolwako diamond mine. Until its closure Dvokolwako operated
as an open cast mine, as it was deemed unprofitable to exploit the
underground diamond reserves. However, new and improved mining technology
may make that task less difficult - and also allow the operators of Ngwenya
Iron Ore Mine access to more deposits.
Motsepe is already reported to own more than ten mines in South Africa,
and control ten percent of shares in the South African insurance giant
Sanlam. He is estimated to have a personal worth of almost 1.5 billion
dollars.
The 42-year-old, who was voted South Africa's Entrepreneur of the Year in
2002, has close ties with the country's head of state, Thabo Mbeki. He has
also been appointed President of the Chambers of Commerce and Industry South
Africa (CHAMSA), the first body to unite black and white chambers of
commerce in the country.
At present, Motsepe is being hailed as the saviour who will resurrect
Swaziland's dormant mining industry - while enabling the country to benefit
from the process in a way that it failed to do in the past. This is a heavy
mantle to bear, and one which he may be cautious of assuming.
"The skills that we have in South Africa and Swaziland are in abundance,
but only a few of those people can raise enough capital to start and sustain
a viable business," he told a group of local business leaders in Mbabane
recently.
Last week, Richard Maphalala, government's Director of Geological Surveys
and Mineral Sources, said he felt "positive" that Motsepe would receive the
license he had requested to prospect for gold in Swaziland's hilly northern
region.
"There are occurrences of gold in the northern parts of the country, but
(they) are not in big quantities," added Maphalala. But, with gold currently
trading at about 400 dollars an ounce, smaller mining operations are again
showing potential for profit.
"The same (type of deposits) are exploited in Barberton (in South
Africa), and they do not need large amounts of investment capital," said
Maphalala. If Motsepe succeeds in unearthing Swaziland's remaining gold, he
may also encourage local entrepreneurs to get into the business of mining.
"Swazis have only scavenged pickings left over when the big mines closed.
There has been much bitterness over the way white foreigners took most of
our minerals," Andrew Mngomezulu, an elderly former miner who worked at
Ngwenya Iron Ore Mine for 20 years, told IPS.
"It would be good if some mines at the end could be run by our own
people. There would be a justice to that." (END/2004)
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