The Randlords

The Randlords

Deep-level mining changed the whole system of gold mining on the Rand. It made mining very expensive. Today, it costs R60 million to start a gold mine - and that is before the first gram of gold is mined. People needed huge amounts of money to start mining the gold which they would then sell at a profit. Money used in this way is called capital. A capitalist need not be a mine-owner. He can use his capital to start factories, shops or other businesses. But in this section we are talking about the early capitalists of those deep-level mines. Who were they and where did they get their capital?

CAPITAL FROM THE DIAMOND MINES

The discovery of diamonds brought a great deal of capital to South Africa. People came from England and Europe with capital to buy land and dig for diamonds. Some people made fortunes from the diamonds that they and their workers mined. The diamonds were sold for high prices in Europe and the money came back to the mine-owners in Kimberley.

As the diamond mines grew bigger and deeper, the richer mine-owners bought out more and more of the smaller mines. Because they had the capital, they could pay experts to work out how to mine diamonds deeper down. They could also afford to buy machinery from Europe. Prospectors who had less capital and know-how could not compete with them.

Fifteen years after the discovery of diamonds, a few capitalists controlled the richest diamond mines in Kimberley. They joined together to form a powerful company, De Beers Consolidated Mines. De Beers controlled diamond mining in Kimberley.

When deep-level mining started on the Witwatersrand, the richest diamond mine-owners moved into gold mining. They brought with them considerable capital and experience of mining. They also brought ideas on how to control mine-workers in order to increase production, as you will see in this section.

CAPITAL FROM OTHER COUNTRIES

The Kimberley mine-owners brought a lot of capital to the Rand, but it was not enough to start this new industry of deep-level mining. So they started mining companies.

They invited people from other countries, especially Britain, to invest capital in their companies. These people then became shareholders in the companies and shared the profits from the mines.

But the richest capitalists, the ‘Randlords’, made sure that they owned most of the shares in their companies. In that way they never, lost control of the gold mines.

THE CHAMBER OF MINES

The mine-owners did not only need capital to control the gold mines. They also needed careful organisation. They realised that South Africa must change in important ways if their mines were to be as profitable as they wanted them to be. To bring about these changes, the mine-owners needed a great deal of power.

A large part of this document is concerned with the ways in which the mine-owners gained the power and the profits they wanted. In doing so, they brought about far-reaching, in fact revolutionary changes in South Africa.

In the early years, the companies started many different gold mines.

Some struggled to make a profit because their ore was of poor quality, while other mines were doing very well. Some mines were having problems getting skilled miners; others could not find enough unskilled labour. The mines had different managers, and different management policies. Some mines were able to offer higher wages to unskilled workers, while other mines went short of labour.

It seemed clear to many mine-owners that one system was needed for all the gold mines. The mining companies needed to co-operate with one another in order to get the most from their mines.

In 1887, the big mining companies formed a kind of mine-owners’ association called the Chamber of Mines. The Chamber of Mines became a powerful organisation serving the mining companies and getting them to agree to common policies on wages, finding workers and how to deal with the government.

In later sections we shall see many examples of how the Chamber of Mines used its power for the benefit of the gold mines and their owners.

GOVERNMENT SUPPORT

Because the mine-owners controlled the gold mines, they also had power over the different governments of South Africa. (South Africa was divided into four states at the time; the Transvaal, Natal, The Cape and the Orange Free State.) The governments did well out of the gold mines, directly or indirectly, so it paid them to help the mine-owners to increase profits.

The Transvaal government benefited most of all from the gold mines. In 1884, for example, it was a desperately poor state - with only a few cents left in the bank! Five years later it had more than R3 million from the mines in taxes, stamp duties from land and property sales, and mining and trading licences. The Cape and Natal governments more than doubled their income from taxing the ports and charging for transport on the railways. Even the Orange Free State benefited from the mines. Farmers were doing well and the value of their land rose.

The gold mines were vitally important to all the governments. The governments were prepared to help those who controlled the mines - the Randlords.

Some mine-owners held important positions in their governments. They could even change government policies when they wanted to.

One of the most powerful mine-owners, Cecil John Rhodes, used his power to help the mine-owners’ interests.

• The Randlords were a small group of powerful mine-owners with experience of the Kimberley diamond mines.
• They were able to gain control of the gold mines with the capital they had gained from diamonds.
• They made themselves and the gold mines even stronger by forming the Chamber of Mines to look after their interests.
• Their control over the gold mines also gave them government support. Some mine-owners such as Cecil John Rhodes even had direct political control.

In later topics we shall see how the powerful mine-owners and their organisation helped to bring about revolutionary changes in South Africa so that the gold mines could remain profitable.

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