VZCZCXRO6966
RR RUEHJO
DE RUEHSA #0842/01 1181501
ZNR UUUUU ZZH
R 281501Z APR 09ZDF
FM AMEMBASSY PRETORIA
TO RUEHC/SECSTATE WASHDC 8277
INFO RUCPDC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHDC
RUEHAK/AMEMBASSY ANKARA 0227
RUEHBJ/AMEMBASSY BEIJING 0977
RUEHBY/AMEMBASSY CANBERRA 0836
RUEHLO/AMEMBASSY LONDON 1740
RUEHMO/AMEMBASSY MOSCOW 0985
RUEHNE/AMEMBASSY NEW DELHI 0577
RUEHOT/AMEMBASSY OTTAWA 0794
RUEHFR/AMEMBASSY PARIS 1576
RUEHSG/AMEMBASSY SANTIAGO 0258
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHZO/AFRICAN UNION COLLECTIVE

UNCLAS SECTION 01 OF 02 PRETORIA 000842 
 
SIPDIS 
SENSITIVE 
 
STATE PLEASE PASS USAID 
STATE PLEASE PASS USGS 
DEPT FOR AF/S, EEB/ESC AND CBA 
DOE FOR SPERL AND PERSON 
DOC FOR ITA/DIEMOND 
 
E.O.   12958: N/A 
TAGS: EMIN ELAB PGOV KDEM SF
SUBJECT: MINING FOR VOTES IN THE FREE STATE 
 
REF: 08 Pretoria 565 
 
PRETORIA 00000842  001.2 OF 002 
 
 
This cable is not for Internet distribution. 
¶1.  (SBU) Summary: South Africa's Free State Province once ranked 
among the world's greatest producers of gold, rivaling the gold 
deposits west of Johannesburg.  The Free State's high-grade deposits 
have been mined out to a great extent, leading to long-term decline 
in production and jobs in and around the gold district center of 
Welkom.  The planned city of Welkom is left with many derelict 
tailings dumps and mine shaft headgears, emblematic of the economic 
strain.  Major local miner Gold Fields was unsuccessful in 
negotiating with the mining union on maintaining production on the 
April 22 election day, despite setting up two polling stations on 
the mine site.  Polling stations exhibited strong turn-outs and 
smooth voting, despite cold weather.  End Summary. 
 
------------------------------------------ 
Free State Gold Fields - Long Term Decline 
------------------------------------------ 
 
¶2.  (SBU) Minerals/Energy Officer and Specialist visited major 
producer Gold Fields' Beatrix Mine south of Welkom in the Free State 
Province on April 21.  Acting Mine Operations Manager Sias Botha 
hosted a visit to some of the Number 3 shaft underground facilities, 
including water "settling" and recycling facilities and ore loading 
and tipping facilities below- and above-ground.  Beatrix processes 
gold ore from 500-2,200 meters underground from four shafts.  The 
mine's special challenges are to mine and process low-grade gold ore 
(4 grams per ton) and to contend with high methane emissions.  They 
are aiming to tender for a company to process the methane for energy 
production.  Beatrix employs almost 12,000 workers, including 
contractors, of which about half are foreigners from Lesotho and 
Mozambique.  The mining pidgin language Fanagalo is the lingua 
franca.  Mine management estimates HIV prevalence to be 25-30 
percent. 
 
¶3.  (SBU) The Welkom area comprises a southern extension of the 
world-renowned Witwatersrand deposit first discovered near 
Johannesburg in 1886.  The Free State gold fields were discovered in 
1946 and Welkom was a planned city based on gold-mining.  The Free 
State gold fields flourished for forty years.  A mining pump 
supplier (and DA polling party agent) told Minerals Officer that in 
its glory days, "Welkom supplied one quarter of the free world's 
gold."  Economic deposits have slowly depleted over recent years, 
leading to mine consolidation and closures.  The Embassy's Minerals 
Specialist worked for one of the early mines in Welkom, St Helena, 
in the 1960's, but the mine is now closed and the associated Welkom 
neighborhood where he lived appeared in decay.  The Embassy team 
observed many unrehabilitated tailing dumps, one generating a dismal 
dust storm north of town.  There were many derelict mine shaft 
headgear towers in and around Welkom.  Interlocutors were generally 
cautiously optimistic about Welkom, but admitted that the municipal 
government was not planning adequately for sustainable 
Qgovernment was not planning adequately for sustainable 
diversification.  Nevertheless, the central business district 
appeared reasonably vibrant and clean. 
 
¶4.  (SBU) Gold Fields and Harmony Gold are still successfully 
operating a number of mines in the area, so some reduced level of 
gold-mining is likely to be sustained.   Many Welkom interlocutors 
expressed concern about the independent, "black-empowered" Pamodzi 
President Steyn mines which comprise part of a troubled, provisional 
liquidation.  The potential liquidation also involves their Orkney 
mine in the adjacent Northwest Province.  These interlocutors were 
moderately optimistic that new capital would be sourced to keep the 
threatened mine and associated employment in operation.  Gold mining 
is slowly declining throughout South Africa because of the problems 
of depletion of economically mineable resources, deeper mining, 
power shortages, safety concerns, and government regulation.  But, 
most gold analysts are bullish on gold prices - which have not 
suffered in the global downturn - and are expected to rise over the 
 
PRETORIA 00000842  002 OF 002 
 
 
coming year. 
 
-------------------------------- 
Union Forces Gold Fields to Stop 
Production on Election Day 
-------------------------------- 
 
 
¶5.  (SBU) Gold Fields Beatrix Mine Manager - Mine Planning and 
Resource Management - Gerhard Becker told the Embassy team that the 
mine had gained preliminary approval from local National Union of 
Mineworkers (NUM) officials to maintain production on Election Day 
by establishing two on-site poll stations.  Local union officials 
subsequently succumbed to pressure from the Congress of South 
African Trade Unions (COSATU) to have April 22 declared a general 
non-trading public holiday (although rejected by the ANC 
government).  Despite mine management's earlier negotiated 
arrangements, members were barred from work, effectively shutting 
down the mine on Election Day, as occurred generally at mines 
nation-wide.  Mine management anticipated that 80 percent of staff 
would have come to work, happy to earn time-and-a-half holiday pay. 
The Embassy team visited the polling station at the Beatrix Number 4 
shaft staff housing hostels.   At mid-morning there was a calm queue 
of 150 male miners.  The female Presiding Officer told Minerals 
Officer there were 1,200 registered voters, of which more than 
one-quarter had voted by that time.  The polling station met the 
same standards as others observed in and around Welkom.  National 
media SABC reported that at the other Beatrix polling station, the 
tent serving as the polling station had blown down in the previous 
night's high winds.  The IEC had reportedly scrambled to put it back 
up and have everything ready for the 7:00am opening.  The presiding 
officers at two nearby rural polling stations (one farm garage and 
one tent) said the mining company had assisted with transport for 
voters. 
 
¶6.  (SBU) Comment: The Embassy team was struck by the apparent 
normalcy of black and white voters calmly queuing and voting 
together in and around Welkom.  Voters, poll officials, and party 
representatives prosecuted the voting process with good humor and 
grace, both in the all-black Thabong township and in mixed Welkom 
proper precincts.  Eight out of nine polling stations visited had 
female presiding officers.  Early turn-out was high despite frigid 
temperatures.  The team noticed no significant problems.  Welkom 
transitioned and integrated since 1994 under considerable economic 
strain and it was inspirational to witness democracy on display in 
this corner of post-apartheid South Africa. 
La Lime