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Mechanization and Labour Policies on South African Mines

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A. Spandau (1980). Mechanization and Labour Policies on South African Mines. South African Journal of Economics, vol. 48, no. 2. Economic Society of South Africa.
Type journal article
Scope Economics and economic history of apartheid
Method mixed
Period studied 1960–1980
Regions South Africa, Witbank coalfield, Northern Rhodesia/Zambia (comparison)
Themes mining migrant labour, labour markets wages, manufacturing industrial policy, unions strikes, education human capital, business and state, comparative theory
Citation key spandau1980a

Argument

Capital-labour substitution on South African mines has gone ahead without any clear government policy. Coal mining shows the clearest case: mechanization has been rapid, handgot mining has been replaced, and personnel policy has been reoriented around pay, work stabilization and training. Spandau explains this with internal labour market and human-capital theory (Oi, Becker, Doeringer and Piore). On this account fixed recruitment, screening and training costs give mines a reason to reduce labour turnover and pay above marginal product. Gold stoping has barely mechanized because of geology and the blasting cycle. Spandau projects a shift from unskilled to semi-skilled jobs and a more equal mine wage structure by 1995. The article also treats mechanization as itself an agent of change in personnel policy.

Evidence and method

Official statistics (Department of Statistics Quarterly Bulletin; Chamber of Mines reports including TEBA recruitment figures), coal-industry trade literature (King 1979), an engineering cost comparison supplied by a mining executive, discussions with mining engineers and Chamber of Mines Human Resources Laboratory staff (1978), Hansard, and comparative material on Zambia and German coal mining. The gold-sector projection rests on the author's own model in a mimeographed 1979 report.

Place in the debates

Findings

  • In iron ore mining, new mechanized mines replaced unskilled Black labour with skilled White maintenance workers, sharply lowering the Black/White ratio. (p. 2)

    In the industry as a whole, the Black/White employment ratio dropped from 4,56:1 to 2,42:1.

  • Coal output grew rapidly in the 1970s. (p. 2)

    Output increased from 53,1 million metric sales tons (Mt) in 1970 to an estimated 114,0 Mt in 1980.

  • Hand loading of coal collapsed between 1965 and 1978 as mechanized methods spread. (p. 2)

    hand loading of coal decreased from some 45 Mt (90 per cent of the total output) in 1965 to some 13 Mt (14 per cent of total output) in 1978.

  • A handgot mine of a given capacity would need roughly four times as many Black workers as a mechanized one, which implies a large hostel population. (p. 2)

    The handgot mine would thus employ 3 640 Black workers and in practical terms this would have required the establishment and running of a large "hostel".

  • Labour unrest in 1973 accelerated coal mechanization because large hostel workforces could not be controlled. (p. 2)

    some collieries decided to phase out handgot mining in favour of mechanized mining because it had become impossible to control large numbers of Black hostel workers effectively

  • Mines stabilized their core workforce through family housing and large pay rises, as predicted by internal labour market theory. (p. 4)

    the mines have been successful in stabilizing their core work force and this has been accomplished primarily through the provision of family housing and through steep increases in pay.

  • TEBA recruitment fell sharply as stabilization schemes lengthened contracts. (p. 4)

    recruitment figures reported by The Employment Bureau of Africa Limited (TEBA) dropped as follows: January 1977 to 90650, January 1978 to 54203 and January 1979 to 44 508.

  • The foreign share of novice recruits fell steeply by the end of the 1970s, which Spandau attributes to employers' fear of a sudden withdrawal of foreign labour, as with the Malawians. (p. 4)

    Of the novices who entered the industry, some 80 per cent were recruited from foreign countries in the mid-1970s, but by the end of the decade this had dropped to 20 per cent.

  • Gold stoping has not been significantly mechanized because of geological and technical constraints. (p. 5)

    In contrast to coal mining, no significant progress has as yet been made in the mechanization of stoping work on the gold mines.

  • Before 1971 the fixed gold price biased gold mines toward unskilled short-term migrant labour. (p. 5)

    Prior to 1971 and under the rule of the fixed price of gold which prevailed until then, the economic bias on the gold mines was in favour of the use of unskilled, short-term labour.

  • About a quarter of Black gold-mine employees work in stoping, so productivity there is the central issue. (p. 6)

    approximately 25 per cent of the Black work force (or some 142 000 men at the end of 1978) are directly employed in stoping activities

  • Oppenheimer (Anglo American, 1979) described the move to capital intensity as irreversible and tied it to the unsustainability of the racial wage structure. (p. 8)

    the trend towards capital-intensive industry is natural at this stage in our development and cannot be reversed.

Evidence ledger

Sources used

Source Kind Period How used
Department of Statistics, Quarterly Bulletin of Statistics, Vol. 13, June 1979 (iron ore mining employment by race, 1975 and 1978) official statistical series 1975-1978 Supplies White/Black employment in iron ore mining for Table 1, showing the fall in the Black/White ratio from 4,56:1 to 2,42:1.
Hansard (House of Assembly Debates), Questions and Replies, 22 February 1977, Qu. 7, pp. 422-23 parliamentary debates 1977 Documents the Minister of Economic Affairs' statement of concern about rising capital-intensity and a promised enquiry.
King, Peter, 'Long Term Trends in South African Coal Mining', Coal, Gold and Base Minerals of Southern Africa, Vol. 27, No. 3, March 1979 secondary literature compilation 1965-1980 Provides coal output, labour productivity per man-shift and the decline of hand loading, which establish the extent and timing of coal mechanization.
Report of the Commission of Inquiry into the Coal Resources of South Africa (Petrick Report), R.P. 63-1975, Ch. 8 commission or official report 1975 Source on coal mining practices and the potential productivity of different mining methods (tonnes per man-shift).
Cost data from Dr A. W. S. Schumann (General Mining and Finance Corporation) comparing mechanized and handgot mines, 1977/78 company records or reports 1977/1978 Underpins the capital and running cost comparison and the Table 2 employment estimates for a hypothetical 2,4 Mt mine.
Chamber of Mines, 'Labour Force Becoming More Stable', February Report, 1979 chamber of mines or recruiting records 1977-1979 Supplies TEBA recruitment figures for January 1977, 1978 and 1979 as evidence of workforce stabilization.
Chamber of Mines, 'Profile of a Novice Mineworker', February Report, 1979 chamber of mines or recruiting records mid-1970s to 1979 Gives the share of foreign novices (80% to 20%) and the average length of induction and training (9-17 days).
Discussions with staff of the Human Resources Laboratory of the South African Chamber of Mines, mid-1978 interviews oral history 1978 Basis for the estimated allocation of Black workers to stoping tasks (Table 3) and the skill distribution (Table 4).
Discussions with engineers from mining houses and coal machinery importers interviews oral history c.1979 Informs the account of coal mining operations, equipment imports and local adaptation of machinery.
Letter from Mineworkers' Union (Welfare Officer van Rensburg) to H. Griffiths, 28 August 1979 union or movement records 1979 Evidence that the white union continues to support work reservation against Black advancement.
Anglo American Corporation, Chairman's Statement 1979 (H. Oppenheimer) company records or reports 1979 Quoted to show mining house acceptance of an irreversible trend toward capital-intensity.
Spandau, Labour Research Report No. 22, Dept of Business Economics, University of the Witwatersrand, September 1979 (projection model for gold mines 1978-1995) author survey or fieldwork 1978-1995 Source of the projected shift of gold mine employees from unskilled to semi-skilled ranks.
Baldwin, R. E., 'Wage Policy in a 1 Economy - The Case of Northern Rhodesia', Race, 1962 secondary literature compilation 1947-1959 Supplies the Copperbelt wage and equipment cost data and the counterfactual employment figure used as a comparative case.
Wilson, Francis, Labour in the South African Gold Mines, 1911-1969 (1972), Ch. 5 secondary literature compilation 1911-1969 Cited for analysis of internal labour market practices on the mines.
Salamon and Joughin papers in Journal of the South African Institute of Mining and Metallurgy (1976, 1978) secondary literature compilation 1976-1978 Technical survey sources on stoping mechanization and the rock-breaking geometry of gold mining.
Glückauf, Wirtschaftsstatistik 1979; Holterhoff 1960 (German coal mining) secondary literature compilation 1950-1979 Comparative productivity and skill-composition data from German coal mines.

Inference

Quantification: Descriptive tables.

Descriptive, largely qualitative analysis of the coal and gold mines, with a few tables and comparisons across mining methods, sectors and countries. The argument is interpreted through neoclassical and internal labour market theory (Oi, Becker, Doeringer and Piore), with Zambian Copperbelt experience as an analogy and industry informants as the main evidence for personnel policy.

Key claims

Claim Basis Strength
Mechanization of iron ore mining replaced unskilled Black workers with skilled White maintenance workers, lowering the Black/White employment ratio. (p. 2) Department of Statistics Quarterly Bulletin figures for 1975 and 1978 (Table 1). Partial data
Coal mines mechanized rapidly in the 1970s; hand loading fell from 90 to 14 per cent of output between 1965 and 1978, and labour productivity roughly doubled. (p. 2) King (1979) series on output, productivity and hand loading. Partial data
Mechanized coal mining is cheaper than handgot mining, and the 1973 Witbank strikes pushed collieries to mechanize because large hostel workforces were uncontrollable. (p. 3) A single cost comparison supplied privately by a mining executive for 1977/78; the 1973 strike account is asserted without cited sources. Illustrative or anecdotal
Mechanization forced coal and gold mines to adopt workforce stabilization policies (higher pay, family housing, re-engagement certificates, stabilization bonuses), which reduced recruitment and the share of foreign novices. (p. 5) Chamber of Mines February Report 1979 items on TEBA recruitment and novice mineworkers; the rest from unspecified reports. Partial data
Gold mining stoping remains largely unmechanized, and by 1978 only a small share of the stoping workforce was skilled or semi-skilled (about 63 per cent unskilled). (p. 6) Estimates from discussions with Chamber of Mines Human Resources Laboratory staff (Tables 3 and 4); no census data available. Illustrative or anecdotal
Mechanization by 1995 will shift gold mine employees from unskilled to semi-skilled grades and make mine income distribution more equal. (p. 7) The author's own unpublished model in a mimeographed research report; details are not given in the article. Asserted
Black operators remain excluded from maintenance and repair work, which limits skill development; the white union supports work reservation. (p. 5) Union letter to the University of the Witwatersrand and a trade journal article; training manuals mentioned but not cited. Illustrative or anecdotal

The author's caveats

The author notes that census data on the occupational composition of the underground workforce are not available and that the stoping figures are estimates. He also notes that equipment modifications are too minor to be formally recorded, that case studies for South Africa are rare, and that government findings (the Kleu Committee) had not been released.

Gaps in the evidence

The argument rests on a few published series, personal communications and informal estimates, with no mine-level panel of employment by occupation, wages and equipment. Company records, Chamber of Mines employment and wage data by occupation, and coal mine production surveys would allow a proper test of whether wages or technology drove the substitution. Many of these archives and series exist and are accessible now, whereas the 1973 strike evidence and the internal labour market claims would need archival and interview evidence.

Replicability: Data poorly documented.