The impact of these redundancies on the former black homelands such as the Transkei, where 1,000 ERPM workers face the sack, is devastating. Neighbouring countries are also hit by the crisis. Seventy thousand miners are migratory workers from Mozambique. Lesotho's main source of income, after foreign aid, comes from the money sent home by miners in South Africa's gold mines. The Gold Crisis Committee is made up of government, employer and union representatives and was set up to regulate the process of retrenchment in the mining industry and defuse its political impact.
Mining remains the basis of the South African economy.
Its prolonged decline, which dates back to the 1960s, is the main reason for the 50 percent unemployment among black workers. When it first came to power the government expected to attract foreign direct investment and to develop the economy on the model of the so-called Asian tigers. Even this high level of growth would only have absorbed the new entrants into the labour market and would not have reduced the present levels of unemployment. But the Asian crisis exposed the growth and job creation targets set out in GEAR to be completely unrealistic. In fact South Africa lost more than 71,000 jobs in 1996 and 116,000 in 1997, and by late 1998 they were 700,000 jobs behind the GEAR estimates.