‘Not Wholly Justified’: The Deferred Pay Interest Fund and Migrant Labour in South Africa’s Gold Mining Industry, c.1970–1990

Abstract

A little-known feature of the vast migrant labour system that supplied South Africa's gold-mining industry was the Deferred Pay Interest Fund. For much of the 20th century, a portion of the wages owed to African mine workers was deferred and remitted to them only at the end of their contracts. This is well-known, but what happened to the interest that accumulated on these deferred wages remains virtually unknown. Mine workers did not receive this interest; it was, instead, deposited into a fund controlled by the mining industry. This article examines the operations of this fund in the Transkei in the context of the crisis in the migrant labour system precipitated by newly independent states refusing to supply further migrant labour to South Africa. This prompted the Chamber of Mines to reorient labour recruitment towards the South African bantustans, and the Transkei quickly became the most important source of labour for the mines in the 1970s and 1980s. Although the fund had a mandate to spend on welfare projects in labour-sending regions, we argue that patterns of spending clearly show how it was used to support the reproduction of the migrant labour system. Payments were used as patronage for local elites, upon whom recruitment depended, and for distributing propaganda for the mining industry. In contrast, payments were consistently directed away from education for able-bodied students, because education would reduce the pool of unskilled labour on which the gold industry relied. Money that, arguably, rightfully belonged to mine workers from the Transkei was used to perpetuate their dependence upon migrant labour to the mines.

Legacy Gold Mine Sites & Dumps in the Witwatersrand: Challenges and Required Action

“…Over time, the gold mining activity attracted unskilled labourers from rural areas within South Africa and migrants from the neighbouring Southern African countries looking for economic opportunities, resulting in rapid population growth and informal settlements in the Witwatersrand [10]. Both formal and informal settlements created around current and closed gold mining areas developed a dependence on the gold mining value chain through local secondary economies until mining activities ceased.…”