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S.Africa's mining towns fight for survival

A South African gold field   
March 17, 1998
Web posted at: 11:35 a.m. EST (1635 GMT)

From Correspondent Catherine Bond

WELKOM, South Africa (CNN) -- South Africa's gold mining industry has been hit hard by a drop in gold prices on world markets, and many formerly prospering mining towns are now struggling for economic survival.

The mining town of Welkom in the province of Free State is exemplary of towns that prospered during decades of a relatively stable world gold market, but are now trying to fight an economic decline that could effectively turn them into ghost towns.

Catherine Bond reports on the decline of gold mining in South Africa
icon VXtreme streaming video (2:34)

While the drop in gold prices left about 50,000 miners nationally without a job last year, Welkom experienced the closure of about a quarter of the mines in its region.

The laying-off of so many workers has dramatically aggravated the unemployment situation and further added to an already troubling crime rate.

Illustrating that point, one woman in Welkom told CNN recently that -- the day before talking to CNN's reporter -- burglars had broken into her house and carried away whatever they could.

Unemployed queues get longer

Employment lines
People wait in line outside an employment agency. Some have waited months or years for a new job.   

Those who were laid off are adding to the long queues outside Welkom's unemployment agency.

"I'm waiting for a job. I'm looking for a job to be a mineworker," one man told CNN. Others like him have been waiting for a new job for months, some even for years.

The reality of South Africa's immediate economic future, however, may mean that the only option for many unemployed is self-employment.

"I want to be a trader, so here I will look at information of being a trader," said another man at Welkom's unemployment agency.

His job future hangs in the balance, just like that of Welkom overall, where some analysts fear that the unemployed may simply leave and thus turn the formerly prosperous town into a ghost town.

"It's easy for those employees (who have been laid off) to just pack their bags and leave because they have no investment in the region," said Dawid Ver Meurlen of Free State Gold Development Center. icon (118K/9 sec. AIFF or WAV sound)

Last year's retrenchment put nearly 50,000 of South Africa's miners out of work   

As South Africa's mining industry has become the most cost intensive in the world due to higher labor cost in a post-apartheid work environment and more capital-intensive gold mining, Welkom is now desperately seeking outside investment.

It is hoped that there will be some investment in manufacturing coming from Britain, which has traditionally had strong links with South Africa.

Increasingly, however, the government is now also looking to China. "China is attractive to South Africa because they have struck that very good balance between mechanization and manual labor," explained Ver Meurlen.

But his development center admits that attracting international investment is an uphill struggle and that it may well be some time before Welkom finds its next pot of gold.


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