Break the resource curse and share the spoils of mining

It is a question often dodged by government leaders at press conferences: Why not "ring-fence" a part of the royalties and taxes clawed from mining companies and earmark them to be spent on local communities?


National Treasury's spoils from mining - some R27-billion last year, according to the Chamber of Mines - goes into a general pool and is then thinly spread from Port Nolloth to Port Shepstone and from Cape Agulhas to Musina. No one ever feels they are getting quite enough, but everyone at least gets something, be it a social grant, a pedestrian bridge, a new school or a highway.

This "indirect benefit" is not as clear to the communities around a new mine, often in a province or municipality that struggles to deliver basic services.

Locals see useful farmland locked away behind gates with the logo of a multinational company on it. They see engineers and executives in luxury SUVs drive in and out. They hear stories of foreign investors reaping massive rewards from their soil. And they feel a whole lot poorer.

Some call it a resource curse. Finding something valuable under your feet, then seeing it dug out and carted away.

This might again be the case near Mokopane, Limpopo, a poor region that carries untold riches in its belly.

Platinum and nickel will be mined there within the next five years and mining companies claim to have followed the correct procedure to obtain the necessary permits.

Still, unhappiness festers.

A good government should get involved when people are unhappy. In this case, it needs to lubricate the conversation between mining companies and communities.

Some of the taxes and royalties paid by the companies need to find their way back to the streets and the buildings next to the mine.

Then communities will protect mines, not threaten them.