The two biggest challenges facing South Africa’s mining sector have been a thorn in the industry’s side for years, undermining both productivity and profitability. Unfortunately, strikes and load shedding remain a problem and the need for decisive and collaborative action from industry leaders and stakeholders cannot be overstated. Are there solutions that the mining sector can implement to start turning the tide?
Strikes: A symptom of deeper issues
Historically, strikes are often a result of unresolved labour disputes, stemming from discontent over wages, working conditions, and labour relations. The historical context of the mining workforce in South Africa, marked by socio-economic disparities and challenging working conditions, adds to the complexity of these disputes.
As we know, these stoppages can lead to a considerable loss in production, negatively impacting the bottom line and the sustainability of mining operations, which adds pressure to meeting stakeholder requirements and the ability to meet wage expectations.
However, mining is a vital part of South Africa’s economy and a large employer. As of 2022, the industry contributed R493.8 billion to the country’s GDP and employed a total of 475,561 people. With the right solutions in place, the positive impact of the sector on employment and the economy can shine through, moving away from a history of labour disputes.
Potential solutions include:
- Establishing open and transparent communication channels between mining companies and workers is crucial. This can help to build trust and foster a positive labour-management relationship.
- Reaching fair and equitable wage agreements that take into account both the cost of living and the financial health of the mining operations is essential. This requires a balanced approach that considers the needs of both the workers and the business.
- Investing in the training and development of the workforce can significantly improve working conditions and employee satisfaction. Up-skilling the workforce also adds value to the business and contributes to its long-term sustainability.
The disruptive force of load shedding
Load shedding has been a regular feature in South Africa for well over a decade. For the energy-intensive mining industry, these outages result in production delays and financial losses.
Unfortunately, it is unlikely that Eskom’s ageing grid will soon be resolved. Instead, the South African mining industry needs to find alternative energy sources and own their own energy supply chain through renewable energy solutions. The good news is that the government’s decision to increase the licensing-exemption threshold for companies to produce their own electricity from 1 MW to 100 MW, opens the doorway to exploring renewable energy solutions, which will directly impact the growth of the industry.
By adopting alternative energy sources, mining companies can ensure a more reliable power supply and reduce the risk of operational disruptions. This will also result in additional benefits, including energy independence, cost savings and environmental sustainability:
- Energy independence: Owning their own energy supply chain allows mining companies to have better control over their energy resources, reduce exposure to fluctuations in energy prices, and become more resilient in the face of supply disruptions. This can also improve the overall competitiveness of mining operations.
- Energy cost savings: Electricity prices in South Africa have been steadily rising, making energy a significant operating cost for the mining industry. By investing in renewable energy solutions, mining companies can reduce their reliance on grid-supplied electricity and benefit from long-term cost savings, as renewable energy sources like solar and wind have lower marginal costs of generation.
- Environmental sustainability: The South African mining industry, like the global mining sector, is under increasing pressure to reduce its environmental impact, including greenhouse gas emissions. By adopting renewable energy sources, mining companies can significantly reduce their carbon footprint, contribute to climate change mitigation, and meet sustainability goals and regulatory requirements.
Working with partners that understand unique mining challenges
At BLU, we have developed a contingent workforce with the specific skills required in mining. Our strong labour relations and transparency minimise disruptions and ensure that we can help mining businesses right-size their staff complements based on current contracts and business opportunities. The fact that we have an onboarded labour force to draw from means that we can deploy skills immediately. We also offer turnkey, customised and fully outsourced project team solutions to support renewable energy projects.