Team 9 presentation

Hope 2012 Transforming South African Mining Communities

Team 9: Greg Bilazarian Joel Sng Nicholas Elisseou Sharon Xue Si Peng Yiwen Gong

Executive Summary

Mining Industry Overview

Strategies

Stakeholders

Conclusion

• Hope 2012 Project

• Healthcare Expansion

• Open & Transparent Regulations

• People First Focus

• Economic Diversification & Investment

• Stakeholders’ Expectations • Stakeholders’ Obligations

• Existing Problems • Sustainable Mining Towns: Mission, Vision & Values

• Limitations • Budget • Strategies Review

Mining Industry Statistics

Mining Industry Overview Stakeholders Strategies Conclusions

Description

Significant contributor to GDP

Major Employer

Average Earnings

Global Impact

Direct (8.6%); Indirect and Induced (additional 10%)

Direct employees (498,141); Indirect (500,000)

US $17,156/year

World’s Largest Producer of Gold, Platinum, and Chromium

Facts

Existing Problems in Mining Industry


Problem Identification

Social Inequality

Industry Turmoil

Widening Trade Deficit

High Prevalence of Disease

Gini coefficient 0.70, 25% of population lives on less than US $1.25/day

Increased Social Unrest

Mining output contracted 8.3% platinum 17.8% gold 11.1% copper 60.2%

Largest trade deficit in 3 years ($1.6 Billion)

Incidence of TB as high as 7000 cases per 100,000 –ten times higher than the general population

Facts

Mission, Vision & Core Values

MISSION

VISION

CORE VALUES



To Better South Africa’s Mining Industry

To Build Viable Mining Communities

Social Equity Sustainability

Effective Healthcare

Social Inequality

Industry Turmoil




Bringing the hope of a better future to the South African mining community

HOPE 2012 Project

Healthcare Expansion

Open & Transparent Regulation

People First Focus

Economic Diversification & Investment

Stakeholders’ Expectations & Obligations Helps Us to Frame Our Strategies

Mining Industry Overview Stakeholders Conclusions Strategies

Government

Mining Companies

Unions Private Investors

Mine Employees

Employees’ Families


Expectations

Social Stability

Reduce Environmental

Problems

Prosperous & Sustainable Economics

Obligations

Ensure Social Stability

Reduce Environmental

Problems

Reduce Unemployment

Reduce Income Disparities

Government’s Expectations & Obligations

Economic development, reduce income disparity, social discontent, and unemployment

Mining Companies’ Expectations & Obligations


Expectations

Maximize Profits

Stable Working

Environment

Increase Market

Competency

Obligations

Improve Working

Conditions

Pay Workers’ on Time

Keep Environment Sustainable

Ensure smooth operation of mine and maintain profitability

Unions – ensure workers are treated fairly


Expectations

Gain more negotiation

power

Protect, and advance the interests of members

More Social Concern;

Less racisim

Obligations

Help Inspire and Train workers

Coordinator between Workers

&Stakeholders

Private Investors’ Expectations & Obligations


Expectations

Maximize Profits

Recover Investment

Explore and Dominate a New Market

Obligations

Diversify the Mining Towns’

Industry Structure

Provide More Job

Opportunities

Improve Residents’

Quality of Life Dominate a New Market and Maximize Profits

Mine Employees & Their Families’ Expectations & Obligations


Expectations

Better Living & Working Conditions

Higher Salary

Good Education for

Children

Greater job opportunity

Obligations

Contribute to employers

Social Responsibilities

Safer living conditions, higher standard of living, Access to Education & Brighter Future

Strategies Under HOPE 2012 Project

• Within the Whole HOPE Program

• Development & Investment Initiatives

• Infrastructures Improvement

• Enforcement – Policy • Implementation

• Emphasize primary care and health literacy

• Improve miners’ housing • Enforce existing health

regulations


Open & Transparent Regulations


People First Focus

Economic Diversification &

Investment

Healthcare Program for All Residents


Migrant Workers

Poor Working

Conditions

HIV/TB Epidemic

Expanded Primary

Care

Better Health

Literacy

Publication of HIV/TB Statistics

Improved Housing

Enforce Regulations

Open & Transparent Regulations


Developing a mining town requires implementing strict health and safety regulation enforcements with universal stakeholder buy-in

ENFORCEMENT – POLICY IMPLEMENTATION

• Stringent trigger for mine shutdown and added benchmarks to re-opening

• Incentivize/safeguard spot checking and whistleblowing

• Buy-in from unions and mines to enforce safety regulation

• Both sides invested because loss from shutdown is great

People first focus Economic diversification & investment

Development Area Methods

Infrastructure Improvement

Education/Community Development

Mining Industry Overview Stakeholders Conclusions Strategies Residential Basic Utilities Transport

School & Educational Facilities

Diversification & Investment Initiatives

Water Treatment Plant Sewage Plant Power Plant Residential Housing Access Roads

Life Skills Training Basic Education Vocational Training Center Mining Safety Training

Business Support Incentives

Retail Mining Tourism Manufacturing Small Business

Implementation

People first focus & Economic Development Specific Projects Mining Industry Overview Stakeholders Conclusions Strategies

Learning Center Initializes

Mining & Museum

Touring Project

Education Development

Project

Diversified Investment Project

Strategies & Problems Matches


Social Inequality

Industry Turmoil





People First Focus


Limitations


Social Inequality

Industry Turmoil



limitations

Scope

Incomplete Data

Mining Companies’

Self-interests

Short-term Effects

Widening this program’s intended results to all of South Africa

Incomplete data may require additional cost analysis studies and alter projections

Some new regulations might contradict mining companies' self-interests

MOSTLY focused on the long-term effects. Thus, less costly short-term remedies may need to be implemented.

Budget Estimation per Town (Revenue not included)

Programs 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E

Infrustructures Hospitals (Fixed) 15 1.00 1.05 1.10 1.16 1.22 1.28 1.34 1.41 1.48

Schools 9 0.30 0.32 0.33 0.35 0.36 0.38 0.40 0.42 0.44

Housing 30 2.00 2.10 2.21 2.32 2.43 2.55 2.68 2.81 2.95

Transportation 1.00 1.05 1.10 1.16 1.22 1.28 1.34 1.41 1.48 1.55

Healthcare Program Hospital Operating 15 15.75 16.54 17.36 18.23 19.14 20.10 21.11 22.16 23.27

per capita expenditure 3.5 3.68 3.86 4.05 4.25 4.47 4.69 4.92 5.17 5.43

Educational Programs 0.1 0.11 0.11 0.12 0.12 0.13 0.13 0.14 0.15 0.16

Specific Projects

Mining & Museum Touring Project 6.000 0.312 0.410 0.516 0.630 0.752 0.883 1.025 1.177 1.340

Learning Center Initiatives 1.5 0.90 0.95 0.99 1.04 1.09 1.15 1.21 1.27 1.33

Educational Development 8.00 4.20 4.41 4.63 4.86 5.11 5.36 5.63 5.91 6.21 Mine Safety & Health

Program 0.37 0.39 0.41 0.43 0.45 0.47 0.49 0.52 0.54 0.57

Business & Investment 0.350 0.368 0.386 0.405 0.425 0.447 0.469 0.492 0.517 0.543

Overhead & Administration 1.000 1.050 1.103 1.158 1.216 1.276 1.340 1.407 1.477 1.551

Total 437 90.82 31.10 32.73 34.45 36.27 38.17 40.17 42.28 44.49 46.82

In Millions Based on this budget, we suggest building 46 mining communities across the country

Strategy Overview



People First Focus


Appendix A: Healthcare Program Problems & Causes Analysis

High incidence of HIV/TB infection among miners in South Africa.

Causes: Overcrowded, single-sex hostels used for miner accommodation Poorly enforced safety and health regulations in the mines Health illiteracy Many migrant workers

Appendix B: Healthcare Program: Solutions (Page 1)

Expand primary care facilities Large mining towns have tertiary care centers that can treat advanced

disease. There is a lack of primary care facilities that can better identify new

infections and implement preventative measures Expand healthcare to migrant workers Standardize records in order to improve treatment compliance and reduce

risk of transmission

Better health literacy Emphasize education about spread of HIV and symptoms of TB Continue condom distribution, distribute respirator masks for people with

active infection

Publicly report HIV/TB health statistics Full transparency of the epidemic is necessary to identify trends in

infection rates and to craft appropriate solutions

Appendix C: Healthcare Program: Solutions (Page 2)

Revolutionize miner housing Abolish common residences and hostels Build new family-friendly housing that would allow wives and children

to move with mine workers. This has been proven to reduce HIV/AIDS rates, with reduction in TB risk

Enforce existing safety and health regulations Regulations concerning silicosis and ventilation exist, but are not

consistently enforced. Compensation for occupational disease is codified, but not enforced.

Strict enforcement would increase the cost to the companies, which would encourage more emphasis on primary care and prevention

Appendix D: Budget For Mining Tourism Project (page1)

Appendix D: Mineral Mining Museum Touring Project (page 2)

Background of MMM Project:

(Each mining community will build 3-4 mining museums) Tourists Expenditure in South Africa Trends by year Finance: Government support

Foreign Tourists number per year: 17,052,696 people

International Tourists Total expenditure in South Africa

6905,000,000 US Dollar (2011 from World Bank)

Investment: Fixed Investment; Maintaining Cost

Facilities & Building: Partnership with International Cooperation

Tourism: The underground tour; Exhibitions-Pithead Baths;

• Historic Buildings; Mining Galleries

Appendix E: Miner Health and Safety Investments Justification Strategic Goal 1 – Prepare Workers for Good Jobs and Ensure Fair Compensation • Increase workers’ incomes and narrowing wage and income inequality. • Assure skills and knowledge that prepare workers to succeed in a knowledge-based economy, including in

high growth and emerging industry sectors like “green” jobs. • Help mining workers who are in low-wage jobs or out of the labor market find a path into middle class jobs. Strategic Goal 2– Secure Health Benefits and, for Those Not Working, Provide Income Security • Facilitate return to work for workers experiencing workplace injuries or illnesses who are able to work. • Ensure income support when work is impossible or unavailable. • Improve health benefits and retirement security for all workers

Strategic Goal 3 – Assure the Production of Timely and Accurate Data on Social and Economic Conditions of Mining Workers and their Families • Provide sound and impartial information on labor market activity, working conditions, and price changes in

the economy for decision making, including support for the formulation of economic and social policy affecting virtually People

Appendix F: Cost Model for Mining Safety & Health Budget

Total Mining Safety and Health Budget $371,896 (Dollars in Thousands)

Mine Safety And Health Program FTE Amount

Mine Safety And Health Program 0 166064

Strengthen Coal Enforcement 597 89863

Metal and Nonmetal Mine Inspection 24 4816

Contractor Conversion 62 18251

Program Subtotal 2365 372523

Appendix G: Total Budget – Education Development Initiatives

Educational investments Schools 8 Equipments 0.5 Libarary 0.75 Personal 0.21 Educational Projects 3 Development Initiatives Retial Expansion 2.54 Mining Tourism 6 Manufacturing 8 Small Business 3 Total Buget (In Million) 104.1

Appendix H: Learning Center Initiatives

Life skills Programs that will enable people to deal with the unemployment challenges, possible future retrenchments, alcohol and drug abuse, and other forms of abuse, need to be introduced in the town.

The lack of a secondary school has been raised as a concern, as children after completing primary and junior secondary school, have to leave the town to further their high schooling in South Africa or other towns. High school Education will be provided in center.

The opportunity for the establishment of Vocational Training Centre exists. This is prompted due to the our investment of existing training facilities, where mine workers were trained. Professional engineering and technical skills are available in the town that could be deployed to train artisans.

We also Propose a Childcare Program consists of caring for Miners’ children, providing education and designing activities for the children and helping with general duties of the center, such as teaching, feeding, cooking, and caring for children and babies

Computer Training program help local children develop their computer skills. computer facilities will be invested in learning center for public use

Appendix I: Learning Center Incentives Budget Justification

Learning Center Expense Justification (In US dollar) Fringe Benefits for Project Personal (Employer , Employees Insurance) 10,000

Agency Personal liability Insurance 20,000

Equipment 9,000,000

Suppliers and Opperating Expenses 30,000

Contractual and Consulant costs 10,820

Training Expenses 9,000

Advertisement 3,200

Employment Costs 700,000

Labor Costs 57,000

Repair and Maintainance 12,000

Rental of Land, Building and other Structure 21,000

Operatioanl Leasing and Stationary 20000

Regulation Costs 1,900

Telecommunications Services 2,000

Total Budget 9,896,920

Appendix J: Business and Investment Budget Justification

Business and Investment Consulting Program

Average Salary 278990

Total Personal Compensation 21008

Advisory and assiatance 10265

Civilian personnel benefits 3400

Equipment and Office Supply 12900

Transportation of things 12000

Rental payment 2500000

Personel/Labor Cost 120000

Communications, utilities, and miscellaneous 27000

Advisory and assiatance 32000

Other services from non-Federal sources 21000

Other goods and services from Federal sources 76000

Operation and maintenance of facilities 21000

Research and development contracts 320000

Operation and maintenance of equipment 29000

Supplies and materials 10000

Total Program Budget 3494563

Team 9 presentation

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