Renée Bonorchis

Gold’s Impact on South Africa Inextricably Linked With Its History and Enduring Inequality
By Renée Bonorchis

There are geologists who believe that South Africa has abundant gold reserves because of a meteorite that hit the Free State more than 2 billion years ago. The impact, which created the Vredefort Dome near Parys, is said to have been so fast and so hot that it caused the earth to ripple and rocks to melt with liquid gold being pushed closer to the surface of the earth.

Similarly, molten gold oozes across Robert Hamblin’s images and reminds us of the changeable nature of the things we take for granted.

For example, it’s possible that without that meteorite, the gold rush in the 1800s would never have happened. Maybe then the wars over this country’s land wouldn’t have taken place and maybe no one would have imposed a system like apartheid. Migrant labour issues and sprawling mining complexes with inadequate housing might not have become the reality.

Then again, without gold, South Africa may not be the continent’s most developed economy. It may not have had sophisticated financial markets, large road networks, numerous ports, telecommunications, a strong civil society, a functioning judiciary and an active labour movement.

While the riches that originally flowed from gold have been used to develop the country’s infrastructure, South Africa ’s Gini coefficient, a measure of income inequality, rose to 0.63 by 2009 from 0.59 in 1993, making it one of the world’s most unequal societies.

In 2012 the average total pay package for the chief executive officers of the top 50 South African companies came to almost 49 million rand, according to the book “Executive Salaries in South Africa: Who Should Have a Say on Pay?” which was published by Jacana this year. That means top chief executives are paid the equivalent of 110 kilograms of gold each year, if you use 443,984 rand per kilogram as the average rand price for gold in 2014.
Maybe these are the men in suits, waist deep in gold in Robert’s evocative photographs.

At the same time, South African miners who risk their lives underground have been asking for pay of 12,500 rand a month. Even at that rate, a year’s compensation would only buy them about 300 grams of the precious metal.
For millions of investors, whose goal is profit, the gold price and gold companies are little more than numbers on a screen that can be bought or sold in less than a split second and market crashes, threats about ending capitalism, extra regulations and global economic crises haven’t changed that.

None of which is to say that there aren’t those who want change, who want investors to be more emotionally connected to the trading decisions they make. Of course, there has been the Occupy Wall Street movement, which caught Robert Hamblin’s attention. Protest is one way to try to change the system. The United Nations’ Principles for Responsible Investment is another way. It started in 2005 and has more than 1,200 signatories, with over $45 trillion in assets, who say they’re committed to sustainability and care about environmental, social and corporate governance issues.

Movements like these have grown quickly in the past decade. One day, maybe, responsible investors will outnumber those who are not committed to sustainable initiatives. Maybe then there will be less disconnect between human reality and the prices on a trading screen. Maybe then a human life will be worth more than 300 grams of gold.

-Renée Bonorchis is a financial journalist who works for Bloomberg News in Johannesburg.