5. Government
Natural Resources – $2.5 trillion
Mining – 20% of GDP
Mining & Other Industries
Mine Workers – 1 Million
High Inequality & Unemployment
Increased Role & Political Will
6. Mine Workers
Poor Working Conditions
Low Wages
High Incidence of Disease
Migrant Lives
Lack of Community
"It's difficult. I don't make a lot
of money here," Mthembu, miner.
7. Mining Companies
Human Rights Violations
Environmental Negative Externalities
Loss of Production - $1.2 Billion
Opportunity in South Africa
8. Planned Course of Action: Four-Prong
Approach
Labor
Health
Housing/Community
Environment
10. Key Components of the Work Environment
Internal
Organization
Skills Work
Pay Structure
Development Environment
Non-
Monetary
Benefits
11. Addressing Internal Organization
Dialogue throughout the workforce
Ensure multiple Solicit the Conduct routine
Meetings
Emphasize Small Teams
Initiate Leadership
Enable Feedback
levels of feedback of all meetings
responsibility, workers on their among all team
allowing growth superiors and leaders and
within the reportees, to management, to
company and promote encourage
opportunities to accountability transparency
be awarded by throughout and trust
advancement
13. Non-Monetary Benefits
Incentives, requiring minimal financial input, serving to increase employee satisfaction
Identify Common Values of Workforce
Change Values into Feasible Benefits
Award Benefits Based on Merit
14. Skills Development
Building more skilled, productive individuals and teams
• Communication Trainings
• Cross – Training between
employees
• Leadership Training
• Life skills training
• First aid training
• Incorporate ICT (Innovation
Slide).
15. The Bogawantalawa Plantation Success
Situation Intervention Strategies
Rigid hierarchical management Formation of Self-Managed Groups
system (5-7 employees) with elected SMG
Low work motivation Leaders
Poor communication skills of Assessment of leadership capabilities
supervisors of employees through secret ballots
Lack of ownership sense among Introduction of a wage system tied to
workers output
Out-migration for more attractive
Distribution of additional work-
employment
safety equipment
Frequent strikes over wages and
poor conditions Life skills trainings
Worker absenteeism as high as 50% Creativity and ownership exercises
17. The Bottom Line…
A positive work environment empowering individuals has been
shown to increase productivity and worker satisfaction
Though, in an environment that has a history of discrimination,
transparency and consistency are crucial for trust building
19. Increase Health Care Access and
Availability
Government intervention
Governmentfunding of medical infrastructure
Company bears cost of worker’s health care
Emphasis on primary care; TB treatment; HIV ARVs
Oversight: Department of Health
Yearly inspections
Continued monitoring and feedback for infection rates
and work-related injuries
20. Increase Health Care Access and
Availability
Government provides incentives
Taxbreak for successful health programs
Worker retention
Lowers TB infection rates.
Eliminate loopholes
Cannot fire a miner because of illness
Miner termination comes with a 6 month pay package
and health costs are covered by company for 18
months.
21. Detection/prevention of TB and HIV
Enforce mining company responsibility
TB and HIV screening as prerequisite for renewing mining license
Improved infrastructure of work conditions
Mine ventilation, gas masks
Government Funding and Oversight
Government funding of HIV and TB awareness campaigns
Private-public partnership of funding housing
Oversee company responsibility setting five-year benchmark and ten year
benchmark
Research promotion
Transparency of disease incidence of miners
Cross-border migration analysis – urban sprawl led to commuting and long-
distance commute from home->work (apartheid laws)
22. Short-term cost over two years
$900 million medical infrastructure
$15 million tax breaks
$17.6 million for oversight, awareness, research
TOTAL $923 million
23. Total cost over ten years: $3.1 B
$2.9 B medical infrastructure
$195 million tax breaks
$41 million for oversight, awareness, research
25. Community Investment by Mines
Royal Bafokeng Nation
150,000 residents
High standard of living
Quality housing
Company-driven
Royal Bafokeng
Holdings
$2.92bn in holdings
Spent $69mn in 2010
for community services
27. Current Housing Problems
Decreased Productivity
Unaccommodating to families
Encourages continued migration
High levels of TB transmission
Housing allowance not effective
Lack of urban planning
29. Community-centered Housing
200,000 units for
$2bn
Affordable and
Cost-effective
1 person per room
Family-friendly
Public-private funding
Integration
31. Who and What AMD effects?
Not only a consumption issue.
32. Immediate Problems to address with
Acid Mine Drainage
Abandoned Mines
Prevent Decanting (Over Flow)
Pumping water out
Monitoring current AMD
33. Where are the immediate areas of
concern?
Gauteng Province:
•Western Basin
•Central Basin
•Eastern Basin
34. Immediate Costs (Years 1-2)
(Detailed in Appendix)
Pumping
Capital Costs:
Pumps: $ 550,000
Pump Installation: $ 920,000
Operating Costs:
Running Costs: 2.8 Million dollars per/year = $5.6 Million (2yrs)
Monitoring Costs of Basins
Ground water monitors, shaft level monitors, surface water quality
monitoring, surface water monitoring, data compilation.
3.3 million per/year =$ 6.6 Million (2yrs)
TOTAL IMMEDIATE (SHORT TERM) COSTS: $13.7 Million
35. Med/Long Term Investments
•Medium Term Solution:
-Neutralizing Treatment Plants
•Long Term Solutions:
-Water Reclamation Plants (e.g. eMalahleni)
36. Med/Long Term Investment Costs Years (3-10)
(Detailed in Appendix)
Neutralization Treatment Plants
Capital Costs: $9M per mine/basin
Operating Costs: $2.3M per mine/basin per yr
5
years = $20.5M USD per mine/basin
Water Reclamation Plants
$35M USD per mining site
TOTAL Med, Long COSTS for 14 Mining Sites: $780M USD
for years 3-10
TOTAL Short, Med, Long COSTS: Approximately $800M
USD over 10 years
38. Opportunity for South Africa
In Gauteng Province by
2015, water demand
will outstrip supply.
eMalahleni water
reclamation plant
produces 24 Million
Liters of potable water
a day.
39. Innovation – “Digital Miners”
By Miners For Miners using Information Communication Technology (ICT)
Miner Group
Formation
Video Production
Feature a “star” miner
Video Dissemination
through small
projectors.
Job training
Health habits
Social issues.
40. Digital Miners – Cost/Benefit
Cost $1.1M USD per yr = 11 Million over 10 years
(Appendix for details)
Benefits:
Capacity building of miners.
Group dynamics created.
Health education simplified and cost effective.
Dissemination of information and training are
standardized.
41. Execution: Budget
Item Cost
Labor 4
Health 3.1
Housing 2
Environment .8
Innovation .01
TOTAL 10 Billion
45. Appendix: Investment Fund Budget
Year Mining Company Investment Public assistance Total holdings
2013 100,000,000.00 50,000,000.00 150,000,000.00
2014 100,000,000.00 50,000,000.00 300,000,000.00
2015 100,000,000.00 50,000,000.00 450,000,000.00
2016 100,000,000.00 50,000,000.00 600,000,000.00
2017 100,000,000.00 50,000,000.00 750,000,000.00
2018 100,000,000.00 50,000,000.00 900,000,000.00
2019 100,000,000.00 50,000,000.00 1,050,000,000.00
2020 100,000,000.00 50,000,000.00 1,200,000,000.00
2021 100,000,000.00 50,000,000.00 1,350,000,000.00
2022 100,000,000.00 50,000,000.00 1,500,000,000.00
Total Public Cost 500,000,000.00
Assumption: Mining companies will increase community investment because of tax
benefit. Most spend around $5mn per year in 2012.
46. Appendix: Housing Goals
Case Study – Upgrading of South African AngloGold Ashanti
residences (2008)
“The key objectives for the near future are for AngloGold Ashanti to:
speed up home ownership by constantly improving or redevelopment
of new Home Ownership Models;
increase formalisation;
initiate community re-integration programmes;
manage the rising demand for residences; and
enter into joint ventures with public and private partners in an
attempt to source sufficient accommodation for its employees.”
http://www.anglogold.com/subwebs/informationforinvestors/reports08
/ReportToSociety08/f/upgrading_AGA_res.pdf
47. Appendix: Housing Strategy
Encourage and fund housing developments that are affordable, safe, and lower costs of social services. Formal urban planning lacks in many mining towns. Many
miners choose to build informal housing, using the housing allowance for other needs. Promote family dynamic, curbing negative effects of familial isolation.
Implementation type: Public-private partnership. For some mines, public will take full responsibility. For others, private required to do more in order to reach Integrated
Development Plan of community.
Time Frame: Begin needs assessment immediately. Within 6 months begin design. First wave of construction starts in Year 3. Second wave starts Year 8.
Feasibility: Firms such as Affordable Living Solutions Africa already begun building in mining communities housing designed for individuals that make $170-$1,700 per month.
AngloGold Ashanti admits one of key priorities is to “enter into joint ventures with public and private partners in an attempt to source sufficient accommodation for its
employees.”
Limitation: Difficult to prevent workers from living in informal housing.
Examples:
Lonmin is already working to convert hostels to single and family units
Multiple mines have stated 1 person per room as goal (Lonmin, Anglogold Ashanti)
Anglogold Ashanti provides $137 monthly housing allowance
Innovation: Miners permitted to use housing allowance on already subsidized government-sponsored housing. Provide tax incentives for private sector development.
48. Appendix: Housing Budget
Year Unit Cost Units Built Yearly Cost
2013 8,000.00 10,000.00 80,000,000.00
2014 8,444.80 20,000.00 168,896,000.00
2015 8,914.33 30,000.00 267,429,926.40
2016 9,409.97 40,000.00 376,398,707.08
2017 9,933.16 30,000.00 297,994,856.39
2018 10,485.45 30,000.00 314,563,370.41
2019 11,068.44 30,000.00 332,053,093.80
2020 11,683.84 10,000.00 116,838,415.27
USD Total 1,954,174,369.35
Inflation rate assumed to be constant at 5.56%
Housing cost estimation: http://openarchitecturenetwork.org/projects/10x10_housing
49. Appendix: references
Prokopenko, J. (1999), Productivity Management: A Practical Handbook, Geneva, International Labour
Office.
ILO. 2004. Social Dialogue at Enterprise Level: Successful Experiences. Available online
www.ilo.org/public/libdoc/ilo/2005/105B09_252_engl.pdf (accessed 09 November 2012).
United Nations OHCHR. 2011. A Guide for Buisness: How to Develop a Human Rights Policy. Available
online http://www.ohchr.org/Documents/Publications/DevelopHumanRightsPolicy_en.pdf (accessed 08
November 2012).
54. Appendix: Digital Miners
Digital Miners is a concept based on Digital Green (www.digitalgreen.org), which
works on improving agriculture development and health development by
incorporating ICT. All assumptions on budget above are based on prior experience
by a consulting member in this organization.
57. Appendix: Community Investment
Strategy
Portion of profits can be used for mini sovereign wealth fund, but unlike RBN, an elected local
board should decide on allotment. Limit administration cut to under 10%, not 25% of RBN.
Implementation type: Company, possible gov’t partnership
Time Frame: Effective immediately. Provides funding for other interventions we discuss.
Feasibility: Many companies already spend millions for community development. This provides more
structured model.
Limitation: How much local power you want to give over funding provided by government. Given
power to local authorities on how funding is used may lead to corruption/mismanagement
Examples: Royal Bafokeng Holdings
Anglogold Ashanti - only $3.2mn in 2010
(http://www.anglogoldashanti.co.za/subwebs/InformationForInvestors/Reports10/supplementary-
information/communities-community-investment.htm)
Lonmin - about $4mn in 2011
(https://www.lonmin.com/Lonmin_Annual_Report_2011/Root/business_review/sustainability_revie
w/key_sustainability_performance_statistics.html)
Innovation: Government supplements company’s contribution to fund. Provides tax incentives (i.e. no
taxes on profits that are contributed to fund)