The globalization of the South African mining industry

Abstract

In 1990 the South African mining industry was predominantly domestically based and was dominated by six mining houses, which all had their head offices in Johannesburg with their primary listings on the Johannesburg Stock Exchange (JSE). However, radical changes in the domestic and international political and economic environments during the 1990s resulted in the demise of the domestic mining house system and the two largest mining houses, Anglo American and Gencor (which was incorporated into Billiton) moved their head offices and primary listings to London. Unfortunately, this move led to massive disinvestment from South African mining and industrial assets by both Anglo American and BHP Billiton. It also resulted in a loss of financial and technological capacity, which during the last century had made a massive contribution not only to the mining industry but also the development of the manufacturing industry. After their London listings both these companies placed their international interests well above the national interests of the host country, South Africa. This raises serious questions regarding foreign ownership of the South African mining industry. Thus, although foreign-owned companies are still playing an important role, the history of our mining industry during the new century suggests that South Africa should not place excessive reliance on foreign-based companies to develop its mining industry and national economy.