The Mineral Revolution
Mineral discoveries in the 1860s, the 1870s, and the 1880s had an enormous impact on southern Africa. Diamonds were initially identified in 1867 in an area adjoining the confluence of the Vaal and the Orange rivers, just north of the Cape Colony, although it was not until 1869 to 1870 that finds were sufficient to attract a "rush" of several thousand fortune hunters. The British government, attracted by the prospect of mineral wealth, quickly annexed the diamond fields, repudiating the claims of the Voortrekker republics to the area. Four mines were developed, and the town of Kimberley was established. The town grew quickly and became the largest urban society in the interior of southern Africa in the 1870s and the 1880s. Although the mines were worked initially by small-scale claims-holders, the economics of diamond production and marketing soon led to consolidation. Within two decades of the first diamond find, the industry was essentially controlled by one monopolistic company--Cecil Rhodes's De Beers Consolidated Mines.
The diamond industry became the key to the economic fortunes of the Cape Colony by providing the single largest source of export earnings, as well as by fueling development throughout the colony. Whereas the Cape's exports in 1870 had been worth little more than £2,000,000, with wool providing the bulk of earnings, by the end of the century the value of exports had risen to more than £15,000,000, with diamonds alone accounting for £4,000,000. There was also substantial growth in population, much of it from immigration. As a result, there were close to 400,000 resident Europeans in the Cape Colony by 1900, twice the number who had lived there in 1865.
Gold soon eclipsed diamonds in importance. Africans had mined gold for centuries at Mapungubwe (in South Africa, on the border with Zimbabwe) and later at the successor state of Great Zimbabwe, and they had traded with Arabs and Portuguese on the east coast of Africa. In the 1860s and the 1870s, Europeans made a number of small finds of their own, but the major development took place in 1886 when potentially enormous deposits of gold were found on the Witwatersrand (literally, "Ridge of White Waters" in Afrikaans, commonly shortened to Rand--see Glossary) near present-day Johannesburg. English-speaking businessmen who had made their fortunes in the diamond industry quickly bought up all the auriferous claims and established a series of large gold-mining companies that were to dominate the industry well into the twentieth century.
Rhodes, who had succeeded in monopolizing the diamond industry, was much less successful on the Rand, where his companies proved to be poorer producers than those of his competitors. In the 1890s, he sought to compensate for his lackluster performance by carving out a personal empire in present-day Zimbabwe, original site of the fifteenth-century gold industry of Great Zimbabwe. There he ruled the Ndebele and the Shona people through his British South Africa Company.
Although beset by a number of technological problems in its early days, gold mining on the Rand grew rapidly, with output increasing from £80,000 in 1887 to nearly £8,000,000, or one-fifth of the world's gold production, in 1895. By the end of the century, more than £60,000,000 of capital had been invested in the gold industry, most of it by European investors, who thereby continued the pattern developed at Kimberley that southern Africa received more foreign investment than the rest of Africa combined. The gold mines employed 100,000 African laborers, five times as many as did the diamond mines, and drew these men from throughout southern Africa, although most came from Portuguese-ruled areas of Mozambique. Johannesburg, the newly established hub of this industry, had a population of 75,000 Europeans by the end of the century, which made it the largest city in southern Africa.
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