Abstract
The mining sector plays a big role in building the economy of different countries. The contribution of the mining industry to the gross domestic product in South Africa has declined over the years due to different challenges such as risks and uncertainties. The industry still however contributes to the South African economy and still benefits thousands of South Africans. The main purpose of the study was to identify the external risks affecting the mining industry in South Africa as well as external risks mitigation strategies. The two research questions used in the study are: What are the external risks affecting the mining sector in South Africa? What are the strategies that can be used to mitigate those risks? The researcher used the inductive research approach because the researcher had no hypothesis before the commencement of the research. The findings and conclusion of the study were derived from the data collected. A survey was used as a research strategy, and an online questionnaire with both qualitative and quantitative questions was used to gather data. Cronbach’s alpha and exploratory factor analysis were used to determine the reliability and validity of the questionnaire. A total of 67 participants out of 108 (62% response rate) from 21 South African mines took part in the study. The operations covered are from 6 provinces, namely: Gauteng, Limpopo, Free State, Mpumalanga, North West and Northern Cape. The commodities covered in the study include gold, platinum, coal, copper, iron ore and diamond, with most participants from gold mining. The external risks affecting mines globally identified from the literature review include fluctuation of commodity prices risk, volatility of exchange rates risk, political risk, environmental risk, health risk and pandemic risk. The survey that used the external risks identified globally from literature as a basis for identifying external risks in South Africa revealed that South African mines are also faced with similar risks. Additional risks affecting the South African mining industry identified through the questionnaire include illegal mining, high competition and decrease in global demand, attracting and retaining skilled labour, cyber-attacks, socio-economic challenges, load shedding, HIV/AIDS, and contractor labour unrests.
M.Eng. (Engineering Management)