Wage stagnation, increased polarisation & foreign accumulation: case study evidence from the DRC on the distributional effects of contemporary gold mining transitions in African LDCs
(London School of Economics)
Paper short abstract:
While a transition from artisanal to industrial gold mining in the DRC has increased productivity, a narrow managerial class captures most of the gains accruing to labour, while the remaining value has flowed primarily overseas, and local attempts to mechanise production have been suppressed.
Paper long abstract:
A rising gold price and World Bank-structured neoliberal mining reform have stimulated a process of foreign-controlled gold sector (re)industrialisation in many African LDCs. Located within a set of theoretical debates around which groups and regions stand to benefit from the productivity gains induced by gold sector (re)industrialisation, the proposed paper seeks to explain how the arrival of MNCs into local LDC artisanal gold mining economies influences the distribution and use of productivity between and within different groups of labour and capital, and the effects of this redistribution on processes of class formation and domestic accumulation. Through a typical case study of the Canadian MNC Banro's Twangiza gold project in the DRC, the paper argues that while Banro's arrival has increased productivity, it has also unleashed new processes of domestic polarisation and marginalisation. Industrial workers' wages have demonstrated a tendency towards stagnation, while a narrow, externally-oriented managerial class captures most of the productivity accruing to labour. The remaining value has flowed primarily overseas, to foreign firms, management and shareholders. Further, Banro's arrival has excluded artisanal miners from the best deposits, and local attempts by an emergent class of artisanal shaft managers to mechanise production have been suppressed. Productivity, then, has been diverted away from a domestic and industrialising capitalist class, and towards foreign fractions of industrial, merchant and financial capital. These findings suggest the need to re-think the theoretical foundations of the African 'minerals consensus', and to reorient African LDC gold mining policy towards greater domestic retention of the sector's productivity.
Natural resources and global inequalities: the African experience (Paper)