Responses to mine downscaling: Evidence from secondary cities in the South African Goldfields

The Extractive Industries and Society 4 (2017) 163–171

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Original article

Responses to mine downscaling: Evidence from secondary cities in the South African Goldfields Lochner Maraisa,* , Deidre van Rooyena , Etienne Nela,b , Molefi Lenkaa a b

Centre for Development Support, University of the Free State, Bloemfontein, South Africa Department of Geography, University of Otago, Dunedin, New Zealand

A R T I C L E I N F O

Article history: Received 12 October 2016 Received in revised form 9 January 2017 Accepted 9 January 2017 Available online 19 January 2017 Keywords: South Africa Mine downscaling Resource curse Economic revitalization

A B S T R A C T

Mining has globally been a key catalyst in economic development. That said, as mines inevitably move from boom to bust, there are significant local consequences for the mining towns and their populations when downscaling occurs. Gold mining has played an important historical role in the development of South Africa. Two secondary cities that have been particularly affected are Matjhabeng (Free State province) and Matlosana (North-West Province). This paper, in that it is based on primary document analysis (basic data and qualitative interviews) and on secondary research, investigates the nature of mine downscaling, the resultant policy and economic responses to the downscaling and the associated economic restructuring that is currently occurring in two secondary cities in South Africa. It is the result of a mismatch between government support and what is really required at the local level, and moreover that the approach to social licensing in South Africa through social and labour plans does not assist in the creation of either collaborative planning. Mining has created some local benefits (refuting the theories of the resource curse and the Dutch disease) and that the two secondary cities are managing to buffer mine downscaling by means of performing regional service functions. © 2017 Elsevier Ltd. All rights reserved.

1. Introduction As a theme, the impacts of mine downscaling on mining towns and on communities have internationally risen to prominence both in academic research and in policy debates (Barr, 1969; Haney and Shkaratan, 2003; Robertson and Blackwell, 2015). When the mining cycle has run its course, there is a loss of once-significant economic mainstays and mining centres commonly fail to spawn economic diversification. This, in all too many cases, leads to population out-migration, dereliction, unemployment and a host of other social and economic challenges (Robertson and Blackwell, 2014). From a theoretical perspective, when areas are subjected to the forces of capitalist-driven change and restructuring (Harvey, 2006, 2015), the often predictable and unavoidable decline of mining areas lends itself to analyses grounded on the concepts of uneven geographical development and path dependence. Add to this the fact that the implications of well-established critiques of the risks associated with mining dependence – the resource curse and Dutch disease – are aggravated in this context because the skewed and restricted nature of local economies is dealt what

* Corresponding author. E-mail address: [email protected] (L. Marais). http://dx.doi.org/10.1016/j.exis.2017.01.004 2214-790X/© 2017 Elsevier Ltd. All rights reserved.

often can be a fatal blow, when a narrow and dependent economic base loses one of its few mainstays (Ross, 2001. Examples of the impacts of mine downscaling and the responses of mining communities and countries are both detailed and extensive. Barr’s early work (1969) on the UK is even provocatively entitled ‘Derelict Britain’, to capture the magnitude of the economic and employment loss occasioned by mine and industrial closure. Significant subsequent work from different countries has likewise emphasised both the negative outcomes and spatial implications of these processes (Bowes-Lyon et al., 2009; Smith, 2015). It is however noteworthy that there is growing recognition of the fact that mining companies need to factor eventual closure into their planning and that measures to diversify economies to forestall single-sector dependence are moreover critically important from an early stage in the mining cycle (Acquah and Boateng, 2000; Boschini et al., 2013; Robertson and Blackwell, 2014). Failure to have done so in the past has had negative implications for many communities (Haney and Shkaratan, 2003). Within this context, it is important to analyse responses to mine downscaling because they are able to shed light on future policy

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choices. In this paper, we specifically seek to detail the nature of both the economic and the demographic change that results from mine downscaling in two South African secondary cities1 before we turn to assessing the nature of national and local responses and of the changing economic fortunes that are due to mine downscaling. Essentially, we argue that the regional function of the two secondary cities provides some form of buffer to mine downscaling – a point often not valued in policy responses. This regional role of towns associated with mining is often neglected in research (see Robertson and Blackwell (2014) as an exception). Four main methods were used in this research. First, a narrative literature review was completed using mine downscaling, resource curse, local impacts and secondary cities as key words. We next completed 26 interviews with key informants in government; business and the third sector and subjected the interview data to a thematic analysis. Third; using basic demographic and economic data; we compared changing trends. Finally; we conducted a document analysis of national government policy approaches and local planning strategies to gauge the extent to which the notion of ‘planning for downscaling’ has featured in planning. 2. Mine downscaling and secondary cities The local impacts of mining have featured prominently in research conducted since the 1950s. The first reflections emanated from Canada and then later from the US. The theoretical frameworks associated with this work have varied from economic to social theories. One of the first economic theories, namely staple theory, had its origins in work done in Canada and was subsequently also applied in the US (Watkins, 1963). This theory provided a framework for development in the midst of the reality of the export-led growth associated with minerals. The problem with this theoretical approach was that despite there being largescale benefits at the country level, the mines themselves were found to “make no contribution to the development of [small towns], nor . . . [did] . . . they receive any flows from their surrounding environments” Robinson, 1962, p. 118). These original thoughts prepared the way for dependency theories and, more directly related, for the Dutch disease and for the resource curse theory. Proponents of the ‘resource curse’ thesis argue that mining brings many ills. They say it increases a country’s levels of corruption, weakens its institutions (Ross, 2001), slows down economic growth (Smith, 2015), causes underinvestment in human capital, discourages general investment and increases the likelihood of civil war (Miller, 2015). The ‘Dutch disease’ thesis, in similar negative vein, says that mining inhibits economic diversification and discourages exports other than mining exports because mining exports improve exchange rates (Gylfason, 2001; Smith, 2015). Though there may be some truth in these negative views, the beneficial effects of mining should not be underestimated. Some even suggest that the binary approach to the resource curse is not helpful (Brueckner et al., 2014). Positive views have for example been expressed on some aspects of the relationship between mining, urbanization and development (Grill, 1984; Jike, 2004), the value of gold mining in Ghana and elsewhere in Africa (Bloch and Owusu, 2012; Bryceson and MacKinnon, 2012), the contribution of mining to local trust between role players (Miller, 2015) and the positive relationship between mining and GDP growth per capita in many countries, especially non-OECD countries (Smith, 2015). The original work on the resource curse focused on the country level and then mainly on

1 Secondary cities are the second-tier cities outside the main metropolitan areas – usually defined in terms of size, function and location (see Marais et al., 2016).

the resource curse associated with mine development. There is increasing evidence that these theoretical frameworks are now being used in respect of local communities and that the present focus is on mine downscaling (Obeng-Odoom, 2014). Obeng-Odoom (2014) notes that the local negative consequences of mining growth have received research attention and are commonly referred to as the ‘social disruption thesis’. Most of this work comes from the 1970s and 1980s (for example, Wilkinson et al., 1982), but continues well into the 2000s (Amundson, 2004; Lawrie et al., 2012). Resource booms are associated with the breakdown of social systems, increased alcohol abuse (Bowes-Lyon et al., 2009), conflict between locals and migrants, cultural conflicts, and pressure on settlements to accommodate large numbers of migrants (Smith, 2015; Wood, 1986). Mining can also exclude those not dependent on mining (Steel, 2013). Local governments often have to deal with the negative effects of mining but can do little because mining is usually under national government control (Kabamba, 2012; Obeng-Odoom, 2014). A longitudinal survey of mining towns in Australia has indicated that, while original disruption tends to become less prominent over time (Smith et al., 2001), impacts also vary across locations, mining companies and the specific resources involved (Wilson, 2004). Social disruption has however seldom been used in the minedownscaling context (see Ntema et al., 2017 as an exception). The effects of globalisation and of neo-liberalism in the mining industry have also left their mark on mining towns. These effects are apparent in a greater emphasis on the reduction of the role of the state, increased privatisation, outsourcing, shift work and in the presence of multinational corporations in the mining environment (Bryceson and MacKinnon, 2012). Neo-liberalism has also resulted in smaller state funding allocations to mining towns (Haslam Mckenzie, 2013). Mining companies have moreover reduced their spending on mining towns. In Australia, outsourcing and shift work have been complemented by fly-infly-out arrangements (Haslam McKenzie, 2011). This has ultimately also reduced the long-term consequences of mine downscaling in mining towns. The underspending in mining towns as a result of fly-in-fly-out arrangements has however not gone unnoticed (Haslam Mckenzie, 2013). There is concern that an overemphasis on market principles and international competitiveness could serve to negate social cohesion, underplay long-term planning and sustainability, and fail to support local participation. In reaction to the initial trends associated with globalisation, a new body of work has developed in terms of the ‘new natural resource agenda’, one that emphasises responsible mining, sustainability, partnerships, collaborative planning, planning for closure and for a social licence to operate (IIED, 2002; ArellanoYanguas, 2008).This new body of work has however not escaped criticism. Recent contributions have questioned the application of the terms responsible mining (Bice, 2016) and sustainability (JarvieEggart, 2015), have challenged the concept of a social licence (Prno and Slocombe, 2012; Bice, 2014), and have been critical of partnerships (Hamann, 2004). Furthermore, despite some emphasis on planning for closure and downscaling, good practice is limited. Lawrence (2005) neatly sums up the lack of interest in the last stages of a mine: ‘The excitement and fanfare that surrounds the opening of a new mine is never present when it finally closes.’ The literature on mine downscaling or closure seldom refers to the resource curse, and it deals with socioeconomic issues far less than with environmental and technical issues. Early work on the socioeconomic consequences of mine closure is from the global north (Bradbury and St-Martin, 1983; Neil et al., 1992). Since the 2000s we have begun to see case studies on developing countries (Acquah and Boateng, 2000; Haney and Shkaratan, 2003; Jackson, 2002; McGuire, 2003; World Bank, 2002), some of them by authors

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from those countries. The local demographic implications of mine downscaling or closure most commonly reported in the international literature are ageing populations and depopulation (Petrov, 2010), increases in artisanal and illegal mining (Hilson, 2010), loss of production and capital (Bradbury and St-Martin, 1983), declining living standards for ex-mineworkers (Haney and Shkaratan, 2003), community instability (Jackson, 2002) and negative health implications for mineworkers and the communities left behind (Holton et al., 2002). Having a diverse economy helps to mitigate the economic effects of mining decline (Andrews-Speed et al., 2005). But mining communities are generally inappropriately trained for work outside the mining environment (Bowes-Lyon et al., 2009). Mine closure has had specific negative implications for high-tech companies in the Arctic region because skilled people left the region (Petrov, 2010). Areas of mine downscaling have generally lacked mitigation programmes designed to assist with economic development (Andrews-Speed et al., 2005). Where mine closure regulations have been put in place, they have mostly been aimed at environmental rather than socioeconomic rehabilitation. Increasingly, mine downscaling studies conclude that planning for downscaling and closure should start as early as possible (Stacey et al., 2010). Stated differently: mine closure should be part of the mine planning cycle (Veiga et al., 2001). The creation of appropriate skills and business partnership programmes outside mining is also commonly suggested as a way of addressing the inevitable downscaling (Bowes-Lyon et al., 2009). Calls for collaborative planning and partnerships have become a big part of the rhetoric on mining communities (Warhurst and Naronha, 2000). But Hamann (2004) notes that where local government is weak, mine-government partnerships are commonly dominated by the mining companies, many of whom have shifted their collaborative planning responsibilities onto corporate social responsibility. The result is a focus on short-term efforts that ignore longer-term planning responsibilities. Many secondary cities are closely associated with mining (Wood, 1986), as a result of which they developed either partially or fully as secondary cities. The international research on secondary cities can be divided into two phases, the 1970s and 1980s and more recent work since the 1990s. The latter emphasises the vulnerabilities and opportunities associated with globalisation, particularly for local economies dominated by a single economic sector (Bolay and Rabinovich, 2004), the institutional shortcomings and the tendency to develop inward-looking local economic development (LED) strategies (Rodriguez-Pose and Fitjar, 2013). The initial research conducted in the 1970s and 1980s emphasised the importance of secondary cities not only for managing urbanization but also for developing rural hinterlands (Hardoy and Satterthwaite, 1986; Rondinelli 1983). The emphasis on rural-urban linkages has been gaining momentum over the past two decades. Bolay and Rabinovich (2004, p. 408) note that ‘intermediate cities are a privileged environment for regional planning’ because they create ‘a positive dynamic between the urban and the rural’. Ironically, as we show later, our two case study areas tend to ignore this regional service role because, like other secondary cities, they seek to compete with the main metropolitan areas. Extending this argument further, in line with the reasoning of Boschini et al. (2013), we would suggest that the resource curse can, at least partially, be ‘reversed’, provided that there is proper engagement with the regional role. Larger centres and secondary cities appear to be more resilient and, given their larger economies, may be better placed to diversify their economies. Despite much focus on aspects such as partnerships, social licences and planning for mine downscaling, there is very little evidence of the practical operationalisation of these terms.

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Because of the negative local impacts on local communities of mining and mine downscaling, fly-in-fly-out arrangements resulting from neo-liberal responses have also restricted the development of mining towns (especially in Australia). However, many secondary cities have developed precisely as a result of mining and have assumed certain regional service functions. Later in this paper we argue that, in some selected cases, there is indeed a point at which the development of these regional service functions can assist in countering mine downscaling in larger mining towns. 3. National government response to mine downscaling Despite the growing body of literature on mine downscaling in South Africa (Binns and Nel, 2002; Marais, 2013a, 2013b; Marais and Cloete, 2013; Marais and Nel, 2016; Marais et al., 2005; Nel and Binns, 2002; Nel et al., 2003; Winde and Stoch, 2010), the notion of mine downscaling is not embedded in the country’s policy approaches. While policy approaches have, on the one hand, emphasised permanent settlements in direct opposition to fly-infly-out arrangements, on the other, very little attention has been devoted to appropriate responses to mine downscaling. We now briefly assess the national responses to mine downscaling by means of a document analysis of three policy initiatives: the Mining Charter, social and labour plans and the strategy on the revitalisation of distressed mining towns. Central to South Africa’s Mining Charter (2015), which is largely based on the premise that the economic inequalities associated with colonialism and apartheid must be redressed, is the increased participation of historically disadvantaged South Africans. The Charter’s vision is ‘to facilitate sustainable transformation, growth and development of the mining sector’ (Department of Mineral Resources, 2010, p. ii). It lists three objectives aimed at achieving this, only one of which concerns the living conditions of mineworkers and mine communities. This objective is ‘to promote employment and advance the social and economic welfare of mine communities and major labour sending areas’ (Department of Mineral Resources, 2010, p. 1). Important elements of the charter are ‘mine community development’ and ‘housing and living conditions’. To improve living conditions, the emphasis is on reducing density in the existing hostels and upgrading them, and creating homeownership for mineworkers. Social and labour plans, to be developed by mining companies, became a requirement of the Mineral and Petroleum Resources Development Act (No. 28 of 2002) (Department of Minerals and Energy, 2006). The Act deviated from previous mining legislation in that it had a specific social agenda in terms of which social and labour plans had to contribute to local development. To some extent, these plans have become the social licences of mining companies. The supporting guidelines say the plans require ‘applicants for mining and production rights to develop and implement comprehensive human resources development programmes including employment equity plans, local economic development programmes and processes to save jobs and manage downscaling (Department of Minerals and Energy, 2006, p. 4). “Regeneration of mining economies” and ‘provision of adequate living conditions and housing’ are essential terms in the guidelines. The detailed proposals associated with these two elements say the mines should be involved in practical development and their plans should be integrated with the municipalities’ strategic plans, known as Integrated Development Plans or IDPs.2 Local

2 All local municipalities in South Africa are required to develop five-year strategic plans. In theory, social and labour plans and IDPs had to be dovetailed. In practice, a number of concerns remain and it has proved difficult to achieve significant levels of coordination.

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development and improvements in the living conditions of mineworkers have become mainstream approaches in order to ensure the continuation of the social licence. However, as we shall show later, planning for mine downscaling features nowhere. The South African government’s strategy on the revitalization of distressed mining areas, introduced in 2012 after the Marikana3 incident, has five objectives: to ensure the rule of law, peace and stability; to strengthen labour relations; to improve the living and working conditions of mineworkers; to provide short-to-mediumterm measures to support growth and stability; and to identify long-term measures to support growth and stability (Tshangana, 2015). The emphasis on living conditions and stability should be noted. No mention is made of mine downscaling or managing decline. The poor socioeconomic and living conditions of mineworkers as an underlying cause of the unrest in the Platinum Belt that led to the Marikana massacre has received attention in literature (Cronje, 2014). A living-out allowance (a way of getting rid of the compound or ‘hostel’ system historically associated with mining in South Africa, where miners were accommodated on mine property) has not necessarily resulted in better living conditions for mineworkers – a point already made in the mid2000s (Marais and Venter, 2006). Furthermore, living-out allowances encouraged the growth of informal settlements and shifted the burden of infrastructural provision from the mines to local government. Although mineworkers in the platinum industry had, by mid-2014, managed to negotiate salary increases, there is not much proof that their living conditions have changed or are set to change in the near future. The events of August 2012 have focused government attention on the challenges that mining areas face as a result of poor living conditions and potential mine downscaling, with huge loss of jobs. Matjhabeng and Matlosana are two of fifteen local municipalities identified to benefit from this strategy. In addition to government funds, mining companies have also pledged substantial sums. Our contention here is that the government strategy is flawed in three respects: it views all mining areas or sectors as similar, it overemphasizes settlement and housing issues, and it is largely silent on creating post-mining economies and does not suggest what such an economy would look like (it assumes growth). The assumption is that, as poor living conditions contributed to the Marikana tragedy, fixing the living conditions will fix the problem. We argue that this strategy is seriously flawed. We accept that living conditions are a large part of the problem, but the problem cannot be fixed simply by fixing living conditions, particularly not by increasing and improving settlements in an area where there is serious job loss because of mine downscaling. Many mining areas in decline simply do not need more settlement infrastructure. Rather, they require innovative ways of reducing their dependence on infrastructure that they would find difficult to maintain in the long run and they need proactive strategic support to diversify their economies. Social and labour plans represent South Africa’s version of ensuring a social licence for mining companies. Yet, the guidelines pertaining to these plans suggest that very little attention is actually devoted to mine downscaling. The brief assessment of the policy environment suggests that planning and government policy directives focus on creating appropriate living conditions prevalent in mining towns, this as a result of the historical living conditions in mining compounds (single-sex hostels). Planning for downscaling or planning in a way that would assist downscaling receives limited attention. Given the industry’s protracted history of using

3 The Marikana tragedy occurred in August 2012. The South African Police Services killed 34 mineworkers following local protests near the mining settlement of Marikana, in the North West Province.

migrant labour (a bus-in-bus-out system), a fly-in-fly-out solution – such as the one used in Australia – is not an option South Africa’s policy direction is therefore quite the opposite of that used in Australia. Although this could create settlements in places where these might not be desirable, it also means that the regional development role of cities and towns created through mining could – in selected places – be considered as a means of buffering mine downscaling. 4. From mine development to mine downscaling and closure in Matjhabeng and Matlosana When gold was discovered in the Free State during the Second World War, Odendaalsrus was the only town in the area. From 1945 the new towns of Welkom, Virginia and Allanridge were established in the Free State Goldfields region (now the City of Matjhabeng) to accommodate the mining population. Klerksdorp (now part of the City of Matlosana) was established in 1872 mainly as a regional services centre, as it was situated more or less halfway between the Witwatersrand gold mines and the Kimberley diamond mines. Gold mining started on a small scale in the Matlosana area in the 1880s, but it was not until the early 1930s that sufficiently large deposits were discovered to justify largescale commercial development. Orkney and Stilfontein were established as mining towns in the area during the Second World War, but Klerksdorp remained the economic hub. Large-scale commercial mining only got underway towards the end of the Second World War. The difference between the two areas, put simply, is that the Free State Goldfields’ towns, Welkom, Virginia and Allanridge, came into being after gold mining had been established, while Matlosana’s main town, Klerksdorp, was already there before gold mining was established (Orkney and Stilfontein came later). Of the 44 shafts in the Free State Goldfields (Matjhabeng), 22 were developed before 1972. Figures for 1962 suggest that the two areas developed similarly: the Free State Goldfields had 10 mining companies with 17 shafts and employed about 45,000 and Matlosana had 10 mining companies with 18 shafts and employed about 50,000. When the USA went off the gold standard in 1972 this caused a spike in the price of gold: within eight years it rose from about 50 USD per fine ounce to nearly 600 USD. In response a further 22 shafts were sunk in the Free State Goldfields between 1972 and 1993. At the peak of mining development in 1988, about 180,000 mineworkers were employed in the Free State Goldfields and about 120,000 in Matlosana. The rapid increase in the gold price extended the life of mines that were already at risk of becoming marginal by the end of the 1960s. In 2013 seven mines (two uranium and five gold) were still operating in Matlosana. Both areas were hard hit by the initial downscaling in the early 1990s. The decline had started earlier, between 1989 and 1996, but we do not have data on that period. The first major blow to Matjhabeng came with Rand Mines’ closure of the Harmony mine in 1991, which resulted in 10,000 jobs being lost (Ryan, 1991). The closure of the Stilfontein Mine in Matlosana in 1992 resulted in the loss of 24,000 jobs (Urban Foundation, 1994) (Fig. 1). Table 1 shows data for 1996, 2001 and 2011. Five mining-related similarities between the two areas are evident. The two were similar in economic size and structure in 1996: Matjhabeng with a GDP of R14.9 bn and Matlosana slightly lower at R14.6 bn. They had a similar economic structure in 1996, with employment in mining in both areas being well over 50% and GVA originating from mining also over 50%. Their annual economic decline between 1996 and 2001 was similar: -4.1% per annum in Matjhabeng and -4.5% per annum in Matlosana. Their dependence on mining by 2011 was likewise similar, with the percentage employed on the mines having dropped to 29% in Matjhabeng and 31% in Matlosana. And

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Fig. 1. Location of the two study areas.

Table 1 Socioeconomic attributes of Matjhabeng and Matlosana. Attributes

Matjhabeng 1996

2001

2011

472,281

408,170 2.8

406,461 0.4

335,114

359,203 1.4

398,676 1.0

HDI Gini co-efficient Unemployment rate

0.50 0.49

0.49 0.57

0.56 0.55

0.56 0.55 12.9

0.55 0.61 25.6

0.63 0.62 19.6

% employment in agriculturea % employment in mining % employment in manufacturing % employment in utilities % employment in construction % employment in transport % employment in trade % employment in finance % employment in services Total mining employment

5.3 55.6 4.4 0.4 3.9 1.8 9.3 7.8 11.5 97,914

8.4 31.0 7.8 0.3 3.3 2.4 18.1 9.6 19.2 36,505

3.7 29.4 6.1 0.5 5.5 3.4 17.4 10.4 23.6 27,494

4.6 63.4 3.4 0.6 2 3.3 8 3.6 11.1 73,945

6.9 48.3 3.1 0.9 2.2 3.4 10.4 5 19.8 41,488

6.1 31.2 3.8 0.8 3.4 4.0 14.6 8.1 28.0 24,704

0.7 52.4 3.3 0.8 1.3 9.6 5.6 11.7 14.6

0.8 40.5 3.6 0.7 1.4 11.0 7.3 15.0 19.7

0.9 34.4 2.0 0.6 1.5 11.3 7.7 16.3 25.4

0.8 58.8 2.3 1.0 1.6 7.9 6.2 9.4 12.6

0.7 52.3 2.4 0.6 1.2 7.7 7.4 10.5 17.2

1.0 29.4 3.4 0.4 2.0 11.0 13.2 17.7 21.8

14,956,207

12,078,134 4.1 4,504,980 8.9 3.6

12,989,289 1.4 4,260,445 1.3 4.6

14 624 144

11,623,881 4.5 6,074,988 6.6 4.3

12,397,796 0.07 3,644,952 5.0 5.2

GVA GVA GVA GVA GVA GVA GVA GVA GVA

contribution by agriculture contribution by mining contribution by manufacturing contribution by utilities contribution by construction contribution by trade contribution by transport contribution by finance ontribution by services

GDP (2005 constant figures in millions) Annual GDP decline since previous period (all sectors) GVA of the mining sector (2005 constant figures in millions) Annual GVA decline for mining since previous period (all sectors) % population older than 65 a

7,277,985 2.7

2011

Matlosana 1996

Population Population growth rate since previous period

% % % % % % % % %

2001

8,552,846 3.2

Employment within households was excluded for this exercise.Sources: Matjhabeng – Global Insight (2014); Matlosana – South African Cities Network (2013).

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they both had considerably higher percentages employed in services and trade in 2011 than in 1996. On this last point, although many factors could have been responsible for the increased employment in these sectors, our view is that these two areas have benefited from their growing ‘regional’ function. The most obvious difference between the two areas, as Table 1 shows, is in population growth and decline. In Fig. 2 we trace these patterns back to 1951. Our estimates suggest that the 1951 populations for the two areas were more or less similar. Matjhabeng’s economic decline has been accompanied by population decline since 1996. After an original steep increase, between 1960 and 1970 the area’s population figures levelled out. The substantial increase between 1970 and 1991 was mainly attributable to mine development related to the increase in the price of gold. The same steep increase can be seen in the case of Matlosana. The main difference between the two areas can be seen in the population figures after nine decline. Matjhabeng’s population dropped from 472,000 in 1996 to below 410,000 in 2001, a decline of -2.8% per annum over a five-year period. This negative trend continued between 2001 and 2011, with the population declining at -0.4% per annum. Matlosana’s population, by contrast, has continued to increase, growing by 1.4% per annum between 1996 and 2001 and 1% per annum between 2001 and 2011. The figures for Matlosana largely match the population growth rate for South Africa overall. A point to note (not shown in Table 1) is the growth in informal settlements in mining areas and the increase in the number of households (Marais, 2013a). In Matjhabeng the number of households has increased despite the decline in the population and in Matlosana household numbers have increased faster than the population. The increase in households could be because most of the household heads are former mineworkers who have had to leave the mine accommodation and are staying on in the area (mostly in informal settlements) in the hope of finding employment, and either creating new households or bringing their families from labour sending areas. The question we are interested in is why the population of one area has increased while the other has decreased. In the mid1990s, it was already being argued that mine downscaling had prompted the Matlosana area to reclaim its role as a regional services centre (Urban Foundation, 1994). Recent research by Van Rooyen and Lenka (2016) confirms this. Another probable reason for this success is Matlosana’s close proximity to the Platinum Belt and the West Rand, the areas it services. The available data on Matjhabeng suggest that it is also this regional services role that is keeping Matjhabeng from falling apart economically. As the

mining economy has decreased over the past 25 years, regional services have helped to create a new economic equilibrium through the growth of a small manufacturing sector and trade and services (partly owing to the decentralization of government services in the Free State). Local gains include better provision of regional health, education and retail services and a conscious effort on the part of local manufacturers to market their products regionally and nationally following the contraction of the once important local mining industry market. The development of a large regional shopping centre in Welkom and successful efforts by local engineering companies to supply metal products and engineering services regionally and nationally are testimony to the economic reorientation taking place locally. 5. Responses by local government and mining companies Local strategic planners seem hesitant to acknowledge mining decline and mine closure. While the exact nature of each response is conditioned by specific local realities, from an international perspective, the challenges that local planners and businesses have faced and how they have responded are of interest because they form part of a quest to respond more effectively to the development challenges faced by declining mining centres. Neither municipality has stated what this will mean or described a post-mining economy in its development plans. Mine closure is mentioned only twice in Matlosana’s 2013 IDP (City of Matlosana, 2013) and not at all in its latest version (City of Matlosana, 2015) or in Matjhabeng’s (Matjhabeng Local Municipality, 2014). One of the two references to mine closure in Matlosana’s 2013 IDP is in a section about the implications of mine closure for municipal revenue: ‘The harsh realities of the closure of mines, resulting in an increased unemployment rate and in people living below the poverty line, continue to impact negatively on payment for services’ (City of Matlosana, 2013; 206, emphasis added). Our earlier research, conducted in Matjhabeng mentions the same problem (Marais, 2013a). Historically, the mining houses owned substantial properties for housing their workers. Downscaling meant that these properties were privatized and this, in turn, has meant that the municipalities are increasingly at risk because payments for services now have to come from increasingly impoverished people and decreasingly from the few remaining mining companies. The other reference is to subsidized houses having been abandoned ‘due to mine closure’ (City of Matlosana, 2015). Matlosana’s current LED strategy, revised in 2012, seeks to improve the business environment for selected economic nodes by introducing catalyst projects (City of Matlosana, 2012). It supports

Fig. 2. Population growth in Matjhabeng and Matlosana, 1951–2011. Source: Statistics South Africa (2013), estimates based on assumed boundaries prior to 2001.

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black economic empowerment by way of the municipality’s procurement policies and the promotion of small, medium and micro enterprises (SMMEs). It highlights performance areas in terms of economy-friendly municipal procedures and regulations, promotes identified economic sectors, mainstreams economic activity into the formal economy and facilitates a cooperative programme. The LED strategy of the Dr Kenneth Kaunda District Municipality (in which Matlosana is located) seeks to diversify the district’s economy by gaining competitiveness in new areas of development. It identifies five ‘thrusts’: agricultural expansion and diversification, industrial development, development in utilities and construction, SMME development and support, and tourism development. The documentation is less clear on how decisions were taken to arrive at this list. During a SWOT (strengths, weaknesses, opportunities and threats) analysis of the City of Matlosana in 2013, the Dr Kenneth Kaunda Economic Development Agency noted that the projects implemented by the municipality were not high-impact projects (KKEDA, 2013). Consequently, ten high-impact projects to the value of R10 bn are now in the planning phase. The most pressing projects seem to be an SME manufacturing or industrial plant and a meat-processing plant. The economic logic for these projects remains unexplained. The LED strategy document conveys the impression of a strong belief that large catalyst projects – such as a freight airport – are viable and should be located in the area. As already noted, the Matjhabeng Municipality’s IDP does not refer to mine closure. It does, however, provide a list of mining mitigation and redevelopment projects, apparently to be implemented by the mines in terms of their social and labour plans or through their corporate social responsibility programmes. The document does not state the criteria for these projects or say how they fit into a vision of a post-mining economy. It is difficult to assess how far these projects would contribute to a post-mining economy, but there are a few that might help to decrease Matjhabeng’s dependence on mining, such as manufacturing for the mining industry (but with a Southern Africa market in mind) and expanding small-scale mining. Matjhabeng’s economic development function, like Matlosana’s, is managed by a development agency at the district level. The agency’s main aims are sustainable development and job creation, and developing the region as an important commercial hub (Lejweleputswa Development Agency, 2015). The notion of the commercial hub is interesting in that it builds on the regional services function, but unfortunately the IDP says little about this aim or how it might be realized. The agency has recently shifted its focus to project identification and feasibility studies (South African LED Network, 2015). When we interviewed agency representatives in April 2014, little progress had been made. Rather, the agency was crippled by continued political infighting, the lack of an overarching vision and below-par management. In the interim, the Harmony mining companies in Matjhabeng have appointed development consultants to draft a ‘master plan’ for Matjhabeng’s post-gold economy. At the time of writing, this plan had not circulated beyond the mine management, and the notion of collaborative planning with the municipality and the communities had been completely absent from its processes. The master plan is a noble idea, but the management is perhaps being overconfident in assuming that a turnaround strategy is possible and that it has the institutional capacity to manage it. Furthermore, much talk during our interviews in the Goldfields was about the possibility of creating a secondary film studio linked to the Cape Town studios in the area. The main feasibility studies were still in process at the time of writing, and the subsidies required to get this project off the ground seemed considerably more than the Cape Town film industry is currently receiving. We find it highly improbable that Matjhabeng will secure a share of the film industry.

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Though the introduction of social and labour plans holds potential for collaborative planning between the mines and local government, this is hardly being practised. The reasons for this are complex. The poor quality of the IDPs hampers the process and the historical intent of mining companies to provide corporate social investment further stands in the way of collaborative planning. To complicate the issue, our qualitative interviews suggest that the interference by the Department of Mineral Resources, a department that has very little institutional history in social and economic planning, is not proving helpful. Frequently, mines and municipalities agree to a common list of projects without having a shared vision of a post-mining economy. More often than not, the mines get to foot the bill for some of the unfunded projects in the IDPs. Furthermore, municipalities are unwilling to take over responsibility for and maintenance of projects that the mining houses have developed, and an approach of this kind cannot automatically be viewed as collaborative planning. Longer-term economic planning is also jeopardized by the failure to collaborate. A further problem is that the relationship between the mines and local government in a period of mine downscaling is more complex than in a boom period because downscaling usually means changes in mine ownership (as has happened in both Matlosana and Matjhabeng), which hampers partnership development and diminishes overall responsibility. Weak and unstable local government often means that mines play a dominant role in projects. This in itself generates conflict. Because social and labour plans are not public documents, it is impossible to assess them within the framework of collaborative planning. However, mining companies routinely report on their annual activities, which include social and economic investments. We managed to access the reports for AngloGold-Ashanti and Harmony. Although both companies frequently use the term ‘local economic development’ in these documents, their projects are in many cases social and infrastructural investments. The issue of post-mining economies does not feature. And the principal idea of collaborative long-term planning remains rather vague. Local responses miss the obvious. The literature pertaining to secondary cities suggests that consideration should be given to these cities’ regional development role. But the local government development strategies of Matlosana and Matjhabeng reflect mostly on the trading element of this regional role. Both say it is important to expand their business function by constructing new malls and trading spaces. The emphasis on trade is also apparent from the fact that trade’s share of the economic cake has been on the increase in both municipalities since 1996 and has been instrumental in creating jobs. But they have other regional functions in their portfolios, such as providing local educational facilities. The fact that the most prominent schools in both cities have boarding facilities has been instrumental in developing this regional role. Some examples in Matjhabeng are the Harmony Sports Academy, established as a niche school, the Further Education and Training College, which is the best-performing college of this kind in the Free State and one of the best in South Africa, and a campus of the Central University of Technology. None of the benefits of these educational facilities are acknowledged in the strategic planning documents. Both cities have a small though not insignificant manufacturing sector, important in both cases for servicing the rural hinterlands. The fact that local planning documents do not prioritize the maintenance of local and regional roads is a matter for concern and suggests that they do not take their regional role as secondary cities seriously. No mention is made in the local strategy documents of the possibility of hosting decentralized government services. Both Matjhabeng and Matlosana have increased their share of employment in services. Although such employment would not contribute

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much to economic growth, it would go some way towards reducing economic hardship and job loss. Historically, decentralized government services in the Free State were directed to Kroonstad (now known as Mokhaka) but since the dawn of democracy some provincial departments and even the national Department of Mineral Resources have relocated their offices to Matjhabeng. 6. Conclusion The paper is set against the international literature on the ‘resource curse’, Dutch disease and the principles associated with the New Resource Agenda. It describes two local case studies related to mine downscaling and closure – a topic that has not received sufficient attention globally. The history of mine development and mine downscaling in the two areas has been similar, with the difference that Matjhabeng’s population grew more rapidly than Matlosana’s during the growth phase, and that when mine decline began at the end of the 1980s, the former lost many more people than the latter. The economic problems caused by mine downscaling in the two areas have, however, been very much the same. We assessed the responses from local and national government and the mining houses. We saw very little attention being paid to collaborative strategies or planning for a post-mining economy. South Africa’s version of a social licence (social and labour plans) have failed to create collaborative planning (partnerships) and planning for a post-mining economy. More prominent in the responses was the aim of improving living conditions. We do not deny that what happened at Marikana cannot be separated from the problem of mineworkers’ poor living conditions (Cronje, 2014). But a more thoroughgoing approach is needed for areas of mining decline. The planners’ mindset needs to change: instead of planning for growth, they must plan for decline. We argue that areas suffering from mining decline do not need increased settlement infrastructure; rather, they may need to close down some infrastructure. We criticize in particular the blanket approach that views all mining areas as similar. Each area’s particular trajectory of mining growth and decline must be taken into account. In sum, the following are our main concerns about South African planners’ attempts at managing areas threatened by mine downscaling and closure. First, the notion of planning for mining decline is not conceptualized in policy, and practical plans are not made to deal with it. Many of the distressed mining areas will never be revitalized, not even if they are supported by the government’s current strategy (Tshangana, 2015). Second, the planners overemphasize living conditions. Improving housing and developing settlements in these declining areas could well result in households being locked into locations with very little economic viability. It could lead to unused infrastructure and empty settlements and an increase in the longer-term risks associated with maintaining civil infrastructure. Third, the national and local government and the mining companies neglect the notion of a ‘post-mining economy’ – the term seldom appears in their documentation. Fourth, the important regional services functions that our two case study cities originally performed are overlooked and post-mining strategies do not include ways of supporting this function. And finally, little effort goes into creating an environment that would encourage real collaborative planning between local, provincial and national government and the mining companies. Overall, the problem we see is that planners fail to take a long-term view. Short-term projects may tick the right boxes, but they are unlikely to provide for a community’s economic needs once the mines are gone. Given both the international and the theoretical context, the most positive economic outcomes are the extent to which the

private sector in both cities has responded, either through industrial diversification or by seeking regional and national markets for their services and products. In a sense, this reflects important conclusions regarding the extent to which Dutch disease or resource curse has not succeeded in creating ‘lockins’ in the larger mining cities (as compared with the often negative fate of mining towns) and has in fact resulted in economic diversification led by the private sector. It also demonstrates that fostering rural-urban linkages can be vitally important for the economic continuity and survival of secondary cities (Bolay and Rabinovich, 2004) and that the resource curse can indeed be reversed (Boschini et al., 2013). On a broader level, this study indicates the vital necessity not only of anticipating eventual closure but also of diversifying economies in the mining cycle in the initial stages of mining development (Robertson and Blackwell, 2014). As regards the international policy context, the two case studies suggest two important findings. First, the notion of a social licence – despite enjoying legislative prominence in South Africa – has not assisted in creating collaborative planning. It has also not provided a planning framework for mine downscaling. Thus, despite much lip service to planning for decline, there is very little evidence that the social licence is being used to plan for a post-mining economy. In fact, it is essentially being used to reinforce or perpetuate settlement patterns that could, in the long run, inhibit mobility. The second lesson pertains to the relationship between mining and secondary cities. Unlike Australia, South Africa has, since its democratic dispensation, reinforced settlements. Throughout history, some of the larger urban settlements have developed as a result of mining. These settlements, either originally or as a result of mining, have developed regional functional roles. We argue that, in addition to not developing too many permanent settlements around mining, careful consideration should also be given to secondary cities and other towns that do have a regional functional role. Such a regional functional role could well assist in buffering mine downscaling. References Acquah, P., Boateng, A., 2000. Planning for mine closure: some case studies in Ghana. Miner. Energy 15, 23–30. Amundson, M., 2004. Yellowcake Towns: Uranium Mining Communities in the American West. University of Texas Press Houston, TX. Andrews-Speed, P., Ma, G., Shao, B., Liao, C., 2005. Economic responses to the closure of small-scale coal mines in Chongqing China. Resour. Policy 30, 39–54. Arellano-Yanguas, J., 2008. A Thoroughly Modern Resource Curse? The New Natural Resource Policy Agenda and the Mining Revival in Peru. Institute of Development Studies, Brighton, UK (IDS Working Paper no. 300). Barr, J., 1969. Derelict Britain. Penguin, Harmondsworth. Bice, S., 2014. What gives you a social license? An exploration of the social license to operate in the Australian mining industry. Resources 3, 62–80. Bice, S., 2016. Responsible Mining: Key Principles for Industry Integrity. Routledge, London. Binns, J., Nel, E., 2002. The village in the game park: community response to the demise of coal mining in KwaZulu-Natal. South Afr. Econ. Geogr. 79, 41–66. Bloch, A., Owusu, G., 2012. Linkages in the gold mining industry: challenging the enclave thesis. Resour. Policy 37, 434–442. Bolay, J., Rabinovich, A., 2004. Intermediate cities in Latin America: risk and opportunities of coherent urban development. Cities 21, 407–421. Boschini, A., Pettersson, J., Roine, J., 2013. The resource curse and its potential reversal. World Dev. 43, 19–41. Bowes-Lyon, L., Richards, J., McGee, T., 2009. Socio-economic impacts of the nanisivik and polaris mines, nunavut, Canada. In: Richards, J. (Ed.), Mining, Society, and a Sustainable World.. Springer, Heidelberg, pp. 371–396. Bradbury, J., St-Martin, I., 1983. Winding down in a Quebec mining town: a case study of Schefferville. Can. Geogr. 27, 128–144. Brueckner, M., Durey, A., Mayes, R., Pforr, C., 2014. Confronting the ‘resource curse or cure’ binary. In: Brueckner, M., Durey, A., Mayes, R., Pforr, C. (Eds.), Resource Curse or Cure? On the Sustainability of Development in Western Australia. Springer, Heidelberg, pp. 3–23. Bryceson, D., MacKinnon, D., 2012. Eureka and beyond: mining’s impact on African urbanisation. J. Contemp. Afr. Stud. 30, 513–537. City of Matlosana, 2012. Local Economic Development Plan City of Matlosana. City of Matlosana, Klerksdorp.

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