A mining subsidiary of the giant General Electric Co. is contemplating a major new investment in a coal field in South Africa, a company official has revealed.
If carried out, the coal project by Utah International Inc. would run contrary to a strong trend among U.S. banks and corporations to curtail new investment in South Africa because of that nation's apartheid racial policy.
A spokesman for the South African embassy confirmed that representatives of Utah International have discussed their proposal with South African officials, and he said there would be "no obstacle, of course," from the South African government.
Utah International, based in San Francisco, has been a wholly owned subsidiary of General Electric since 1976. Its extensive coal and uranium mining operations accounted for $1.72 billion of GE's $27.2 billion in revenues last year, according to company figures.
William W. Grant, Utah International's Washington representative, raised the subject of the proposed South African venture this week at a seminar on church-state-corporate relations sponsored by the public relations firm of Burson-Marsteller.
He told members of the panel, which included outspoken religious critics of the U.S. corporate investment in South Africa, that his company was considering a major undertaking in the booming South African coal industry, and was sounding out public and governmental reaction.
Utah International, he said, regards itself as an enlightened employer, as shown by the fact that 80 percent of its miners in New Mexico are Navajo Indians who, he said, are earning an average of more than $30,000 a year. Investment in South Africa by his firm, he suggested, might be beneficial to that country's blacks, who provide most of the labor force in the coal fields.
But he was warned by Timothy Smith, executive director of the Interfaith Center on Corporate Responsibility, which monitors corporate performance on social and environmental issues for the National Council of Churches, that any new investment would be taken as a "nod of approval" by the South African government.
Black coal miners can make up to $500 a month, which compares favorably with wages paid to blacks by other sectors of the South African economy.
Grant declined to provide any details of the proposed coal venture, saying through an associate that it would be premature to discuss it. Larry Vaber, a spokesman for GE, said that "obviously any commitment in South Africa would require consideration and approval at the corporate policy level, and such consideration and approval have not been given." GE is already one of the largest U.S.-based investors in South Africa.
In assessing the position his group would take on the proposed investment, Smith said, "I would set up an imaginary balance in my mind. I would look at the positive contribution they would make, through paying a living wage and trying to minimize discrimination and so on, against the political impact a sizable investment would make at this time. I think at this time it would do more to strengthen the forces of white minority rule in South Africa than to undermine them."