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Gold pirates wage a dirty, underground war

Section: Daily Dispatches

By Dan McDougal
The Times, London
Sunday, September 27, 2009

We move cautiously into a narrow gap in the mineshaft and cross from the orange dusk of the South African veldt into absolute darkness. Beneath us is a subterranean realm that plunges more than a mile into the earth's core, a hellish place where touch eclipses sight and the rule of law is handed down by desperate men, armed with home-made grenades and machetes.

From deep within this abandoned gold mine comes the distant hack-hack of heavy drilling. "Zama Zama," says our guide, clutching his old Mauser rifle. "Gold pirates." His eyes bulge with fear.

The suffocating air smells of diesel fuel and ammonia in a shaft that has not seen natural light since it was sealed by its owners nearly 20 years ago.

The tunnel stretching before us winds down and splits into two. "If we take it, can we make it back?" I ask our guard. Gripping his woefully inadequate weapon, he puts his index finger to his mouth and whispers: "They are right beneath us."

His face is a mask of terror as we hear the distant crack of a pistol. "They are warning us. They will move up the shaft and kill us. It is time to go."

Imagine an existence in the bowels of the earth where, for up to eight months at a time, there is no fresh air. The temperature between the walls that close in on you is a stifling 38C. There is no day and night as you drill for gold for 12 hours a shift. At your side is a weapon to protect yourself from the authorities and your fellow miners. To extract gold, you handle mercury so toxic that it can be absorbed through the skin, attacking the kidneys and brain.

This is the life of South Africa's gold pirates, a band of tens of thousands of unemployed men whose numbers have increased sharply in the past year with the soaring price of gold, a traditional haven for investors in a financial crisis.

They break into some of the most dangerous mines on earth, many armed with commercial explosives rammed into bottles. They will emerge months later with their muscles wasting away and their eyes sinking into their sockets.

Here in the goldfields region of South Africa's Free State province, their prize is a lump of crudely processed gold, barely the size of your palm.

Some of it is smuggled to Switzerland and traded on to European countries, including Britain, in a black market worth £300m a year that begins with unimaginable suffering and ends on the high street.

Last week The Sunday Times gained a rare insight into the lives of the Zama Zama -- literally "Let's have a go" in Zulu -- and the burgeoning illicit businesses that supply them with everything from cola and hamburgers to prostitutes up to a mile underground.

Many of the miners never resurface. In June the bodies of 91 Zama Zama were recovered from the closed 5,250-foot Eland mineshaft in the former goldrush town of Welkom. The authorities believe as many as 1,000 illegal miners have died underground in the past year, killed by toxic fumes, fires and each other.

"Going under is the hardest thing you will ever do," Masahe, an illegal gold miner, told us in a shebeen near his home in the shadow of Welkom's No 6 mine.

“After a few days you start panicking, especially at night. You lose track of time. You start to feel crushed, imagining that the walls are collapsing into you. I would curl up into a ball beside my drill, convinced the earth was coming down on me.”

Masahe is dirty and frail and stinks of booze. But he still holds menace -- and a weapon he threatens to use against us if we identify him. As we talk his heavily scarred face is contorted by hacks and coughs. He says he works for a syndicate that includes legal miners, shift managers and security guards helping illegals to operate in unsupervised areas of their mine.

It pays him about L2,500 for a four-month stint underground, a fortune in a South African township, and, according to Masahe, it is more sophisticated than most.

"A businessman in Welkom with police and mine contacts sends us down for up to six months," he said. "With trained miners losing their jobs, we have managed to get more equipment. We steal it from the mine companies or take it at gunpoint. Now we use fake IDs and pay the shaft operators to take us down."

Using maps and walkie-talkies, they descend a legitimate shaft. Then, Masahe says, they walk anything up to 18 miles underground to their chosen point. He sits in a pit full of boulders and crushes the stone into smaller pieces. "Sometimes I work the mercury, using chemicals on the rocks to leach out the gold flakes."

Supplies are vital but expensive. "A loaf of bread or a bottle of Coca-Cola costs us L5, all on credit which we have to pay when we get out. A smuggled hamburger can get more than L30. Many of the transactions are made in gold. Cigarettes go for between L10 and L20 a pack of 20. Oude Meester brandy from L50 and Fish Eagle whiskey for L30. A tab of everything we eat and drink is kept on the surface.

"Women are being brought down now. They will do a round for a week, having sex with us all -- they are getting very rich from the Zama. They are dressed as men and taken down the shafts in hard hats."

Masahe claims a war is going on a mile beneath the surface of Welkom. "There are rival syndicates and battles are being fought underground. We are fighting each other to get to the richest seams. Our syndicate captured a rival and we decided by committee to take retribution. We cut him open with a blowtorch and threw his body down a shaft. There are so many bodies down there." Other Zama Zama said the official death toll from the Eland disaster was at least double the official toll of 91: they perished after an inferno ripped through an illegal camp.

Outside Welkom more than 100 paupers' graves bore testimony to the young men killed. Many were migrants from Mozambique and Lesotho, attracted over the border by the latest gold rush. "We have no names on our graves because we don't exist," Masahe says.

The fact that the men are virtually impossible to identify makes the police battle against them all the harder.

Sweating in the stifling heat, we take a deep breath in the back of a South African police pickup moving in a convoy into G-Hostel, a sprawling, apartheid-era block of concrete chalets. There is panic everywhere as the locals hide stashes of drugs. Brothels are shuttered and Zama Zama melt into the township walls.

Approaching 24 hours earlier, a Sunday Times reporter and photographer were threatened with guns and told they would be shot if we went any further.

Now the police, hands shaking, clutch pistols and rifles as we run into the squatter camp. The smell of burning coal and mercury pervades the air. In the back alleyways are the smouldering remnants of small-scale chemical works used to leach out gold.

The centre of Welkom's illegal gold mining industry, G-Hostel is a place where police officers are seldom seen. The sewer alleys provide cover for Zama Zama middlemen to run illicit operations, breaking ore and grinding the pieces to powder. It is melted at temperatures of more than 1,064C to extract the molten metal that is passed on to smugglers.

In the past four years, 1,734 men and women have been arrested in this area in connection with the Zama Zama, mainly for being part of their supply chain and processing the gold ore. The gold pirates themselves remain largely elusive.

"These guys are serious criminals," says the police officer leading the raid. "We have seen them with AK-47 assault rifles. There is a lot of money at stake and there is an endless procession of young men willing to do this."

With gold prices close to record highs at nearly $1,000 an ounce, the black market -- which also employs children to haul ore -- is expected to continue its rapid growth.

According to Anton van Achterbergh, a legal adviser at the South African Chamber of Mines, cracking down is virtually impossible. "The area between Johannesburg and Welkom is like Swiss cheese," he said. "We're talking about a few thousand [kilometres] of tunnels underground. Gold can be mined fairly easily so how do we stop it growing?"

The mining industry has tried to protect its interests by beefing up security measures and firing corrupt employees who supply illegal miners with food and equipment. Yet illegal gold flooding out of the country is estimated to account for up to 10 percent of South Africa's exports of the metal.

According to the World Gold Council, defining the primary source of metal used to make a particular piece of jewellery on the high street remains virtually impossible. It means consumers cannot tell whether a product contains gold that has been mined illegally, with all the human misery that entails.

Campaigning groups such as Oxfam believe it is time for the gold industry to be monitored in same way as the diamond trade. "Dirty gold" should be unacceptable, they say, like the "blood diamonds" mined to finance conflict.

"Consumers are being short-changed when it comes to gold and this is something that is being grossly overlooked," said Keith Slack, a senior policy adviser for Oxfam. "With 10 percent of South Africa's gold industry controlled by a growing black market, then a considerable amount of illegal gold ends up in the UK and America, just as blood diamonds did.

"When you consider the massive human and environmental toll gold mining brings with it, this is shocking." Oxfam wants an independent body to certify that gold comes from ethical sources.

This weekend Signet Jewelers, the parent company of H Samuel and Ernest Jones, Britain's two largest jewellery chains with more than 550 stores in the UK between them, acknowledged the difficulty of tracing the origin of their gold.

"We have no manufacturing capability," said Tim Jackson, a spokesman. "The gold used in jewellery we sell is obtained by manufacturers from the international markets. As an individual company we have very limited influence."

Jackson said that Signet, a founding member of the Responsible Jewellery Council, recognised that these were "difficult issues." "We very much wish we could move faster but we are realistic about the rate of progress that can be achieved." The industry should work to improve standards "on a worldwide basis," he added.

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