The document outlines a four-pronged approach to improving the mining sector in South Africa. It discusses challenges facing government, mine workers, and companies. Key aspects of the plan include improving labor conditions, health care access, housing and community development, and addressing environmental issues like acid mine drainage. The plan estimates it will cost $800 million USD over 10 years to implement initiatives across these four areas, with a focus on increasing productivity, health, and building sustainable communities.

1. MINING FOR GROWTH
AUSTIN JASPERS, ERINMA KALU,
cture: 2011 African ArgumentsKEVIN GANDHI,
JESSICA BONTHIUS,
MICHAEL PALISANO, RAVI GUPTA

2. Overview
 Current Climate of Mining Sector
 Planned Course of Action
 Execution
 Conclusion

3. Current Climate

4. Stakeholders
GOVERNMENT
MINERS COMPANIES

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

9. Work 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

12. Pay Structure
Providing attainable incentives
Attendance Initiative
Quantitative
Qualitative
Efficiency Output Confidence Attitude

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

16. Results – Increase in Labor Productivity

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

18. Health Care

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

24. BUILDING COMMUNITY
THROUGH HOUSING

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

26. Community-based Investment Funds
 Portion of profits
 Public assistance
 Tax Incentives
 >10% Administrative

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

28. Community-centered Housing
Present Future

29. Community-centered Housing
 200,000 units for
$2bn
 Affordable and
Cost-effective
 1 person per room
 Family-friendly
 Public-private funding
 Integration

30. Water as a
Human Right. S.A.
Constitution

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

37. Stakeholders: NGOs, Gov’t, Companies

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

42. Execution: Challenges
 Migrant Workers
 Persistent Racial Segregation
 Frayed Relationships
 Entrenched Systems / Inertia
 Consistent Enforcement

43. Conclusion
 Increasing Productivity
 Increasing Longevity
 Building Community
 Mining as an opportunity for all South Africans

44. THANK YOU.

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).

50. Appendix: Projected Government Healthcare Expenditures for Mining
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Medical .05 .04 .04 .04 .03 .015 .015 .015 .015 .015 .015
infrastructu
re
Oversight .001 .001 .001 .001 .001 .001 .001 .001 .001 .001 .001
Tax breaks .005 .10 .20 .20 .20 .20 .20 .20 .20 .20 .20
Research .002 .002 .002 .002 .002 .002 .002 .002 .002 .002 .002
promotion
Awareness 0.76 0.76 0.76 0.76 0.76 0.76 0.76 0.76 0.76 0.76 0.76
campaigns
Total .51 .41 .42 .42 .32 .17 .17 .17 .17 .17 .17
Cost/year
Total Cost 3.1
*All Values in billion USD

51. References
 "South Africa: Preventative TB trial disappoints | SAfAIDS." Welcome to
SAfAIDS | SAfAIDS. N.p., n.d. Web. 10 Nov. 2012.
<http://www.safaids.net/content/south-africa-preventative-tb-trial-
disappoints>.

 BMW South Africa HIV/AIDS Project Budget, World Economic Forum, 2002.

 WHO-Choice Unit Cost Estimates for Service Delivery Estimation, 2007-
2008, South Africa.
http://www.who.int/choice/country/country_specific/en/index.html

52. Appendix: Picture Citations
 Water Picture: ghidularadean.ro
 Miner 2 Pic: businessinsider.com
 Hands at pump Picture: fullcircletravel.co.uk
 Acid Drainage: personal.psu.edu
 Girl with Water: Pbs.org
 Prometej.info
 Clinic Picture: Clintonfoundation.org

53. Environmental Appendix

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.

55. Environmental Appendix

56. Environmental Appendix
Capital Costs:
Pumps: 4800000 $551,724.14
Pump Installation 8000000 $919,540.23
Operating Costs: $0.00
Running Costs 25000000 $5,747,126.44
$7,218,390.80

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)