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4 Africa All that glisters in South Africa is not gold. Diamonds came first with the discovery in 1866, by children playing with a 21-­ carat stone, of the tremendously rich diamond pipes at Kimberley . Within five years, 50,000 men were living in squalor and digging like prairie dogs to extract the precious stones from the rocky soil. Those squeezed out by chaos and competition packed their gear and headed northeast to Transvaal, where gold had been discovered at Witwatersrand in what would become the greatest goldfield on earth, stretching 170 by 100 miles around today’s Johannesburg. The gold and diamond camps were initially run by “diggers’ democracies ” in which private claims and individual initiative prevailed. But as shallow mining along visible outcrops gave way to deeper underground mining requiring shafts and heavy equipment, these were soon replaced by partner­ ships, organized mining groups, and companies that could marshal the necessary resources and technology. The reefs, or veins, at Witwatersrand are among the deepest in the world and could only be mined on the largest possible scale. Enormous amounts of capital were required, but if successful, enormous profits could be reaped. As mining became a corporate enterprise earlier than in North America, it took on a distinctly South African look. Veins could thin out, prices could fall, and without the benefit of today’s exploratory drilling, sampling, and analysis, costly shafts could be put in the wrong place. Mining was too risky to put all one’s eggs in one basket. So instead of individual companies owning individual mines, a system of cross-­ investment was developed where enterprises owned shares in several mines as well as non-­ mining ventures. It was like insurance companies spreading the risk, or for that matter like Newmont itself, except that companies that might be considered competitors also ended up as major shareholders in each other’s ventures. 46 chapter four The two men most responsible for the growth of these mining groups and two of the most powerful figures in South African history were Cecil Rhodes and Ernest Oppenheimer. Rhodes, the son of a British vicar, was sent to South Africa in 1870, at age seventeen, for health reasons and soon joined the pursuit of both gold and diamonds. Always the scholar, it was said that when he first went prospecting, he carried with him “a pick, two spades, six volumes of the classics and a Greek lexicon.”1 In less than twenty years he had rationalized Kimberley, consolidating 3,600 mining claims into about 100; created the giant De Beers Consolidated Mines, which established a worldwide diamond syndicate controlling both the production and marketing of the precious stones; and, after buying up a number of Boer farms on the Rand, established Gold Fields of South Africa in 1887, as the country’s first major gold-­ mining house. Oppenheimer, a generation younger, was German born but British educated and had become a British citizen by the time he went to South Africa as a representative of a London diamond house in 1902. His arrival coincided with the end of the Boer War, which raised the Union Jack over all of South Africa, and the death of Rhodes in March of that year. Out­ doing Rhodes, it took Oppenheimer only fifteen years to wrest control of several gold-­and diamond-­ mining enterprises. In 1917 he launched Anglo Ameri­ can Corporation, which would become the largest gold producer in the world with a hand in most South African mining and metals pies, including holdings in both De Beers and Gold Fields. It was a subsidiary­ company, AngloGold, that Newmont bested in 2002 to become the world leader in gold. It was also Newmont that put the “Ameri­ can” in Anglo Ameri­ can. The London Times of September 28, 1917, reported that by taking a 25 percent founding interest in Oppenheimer’s venture, initially capitalized at one million pounds sterling, Newmont and its associates had provided “the first occasion on which a definite arrangement has been made for the employment of Ameri­ can capital on the Rand.”2 From the outset, the Kimberley and Rand mines were built on British capital. Many mining houses, including Gold Fields, were incorporated in London. But with the onset of World War I in August 1914, the London markets ran dry, at least in their willingness to finance overseas mining ventures. New deposits were being found on the Far East Rand, but with [3.21.231.245] Project MUSE...

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