Analysis of downscaling and its management in South Africa's mining industry with special reference to the gold mining industry
Date
2009-03-25T11:31:11Z
Authors
Ramontja, Thibedi
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Abstract
The objective of the study was to investigate downscaling in South Africa’s
mining industry and the manner in which it was managed with special reference to
the gold mining sector. In this regard the study involved literature review, data
and information gathering, participating in tripartite stakeholder forums and
soliciting opinions from several role players in the industry. Driefontein Gold
Mine, one of the largest gold mines in the world, was used as a case study to
examine management of downscaling in the gold mining industry.
Literature investigation showed that South Africa’s mining industry has always
been cyclical and labour was vital for its development. A dichotomy was revealed
in the study in that the early years of modern mining were besieged with a
continuous shortage of labour; in recent years the opposite is true as the industry
is continuously battling with downscaling and shedding of jobs. Historical data
shows that the gold mining industry has gone through three periods: the Stable
Period (Period 1: 1960-1975); Expansion Period (Period 2: 1976-1987); and
Downscaling or Crisis Period (Period 3: 1988-2004). Sufficient evidence was
presented to show that the downscaling period was triggered by a combination of
political instability of the 1980s and economic factors such as declining gold
grades and depressed gold prices.
Stakeholders followed a three-phased approach to address negative impacts
associated with downscaling. The approach involved holding two tripartite
summits; Gold Mining Summit (Phase 1) and Mining Summit (Phase 2) and
incorporating recommendations emanating from the summits into the legislative
process (Phase 3). At mine level, mines such as Driefontein managed downscaling
through a number of initiatives including productivity improvement, restructuring
and providing redundant employees with the option of taking extended leave.
Economic factors, such as gold grades and ore reserves, suggest that downscaling
will continue well into the foreseeable future and will exacerbate the existing
negative environmental and socio-economic legacies. It is against this background
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that international experiences on the management of downscaling were
investigated. The study concludes by proposing recommendations and a new
strategy to manage downscaling in South Africa’s gold mining industry. The
strategy proposes a number of measures that need to be put in place at national,
local community and mine levels.
Description
Keywords
Gold mining Downscaling