HomeCentral AfricaWhen mines close, options are created for employees

When mines close, options are created for employees

SRK Consulting says mine closure has often led to mass job losses and associated socio-economic challenges, but better engagement and planning can help to put employees on a stronger footing so they can transition into other livelihoods.

According to Jessica Edwards, senior social scientist at SRK Consulting, many mines struggle with finding a practical starting point to initiating effective strategies. Indeed, many consider that their role ends with the payment of a retrenchment package.

This article first appeared in Mining Review Africa Issue 7, 2020
Read the full digimag here or subscribe to receive a print copy here

“It is not uncommon for retrenchment pay-outs to be quickly squandered due to financial illiteracy and poor financial planning,” says Edwards.

“Structuring these pay-outs so that employees are incentivised to withdraw less up-front and delay withdrawals over time is a valuable idea.”

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The issue of personal debt is often overlooked, for instance, but poses a significant threat to workers’ livelihoods after retrenchment. While earning a regular income, mineworkers in South Africa often take on overwhelming levels of debt – and it is common for retrenchment packages to disappear into debt repayments.

“Closure planning could therefore consider debt counselling well in advance of closure, allied with broader financial management training,” she notes.

“This can help employees improve their personal financial position in the years leading up to closure, making them more resilient after the inevitable retrenchments take place.”

Mines can also create opportunities for how those retrenchment packages are invested. Mine closure plans will include alternative land use strategies, among which have been income-generating ventures like renewable energy projects.

Employees can be offered the option to invest part of their packages in these enterprises, which can deliver long-term value as an investment.

There is also a broader range of skills development measures that mines can consider. A primary consideration is the timing, she adds, as effective closure planning cannot be done at the last minute.

“Equipping employees for viable employment or entrepreneurial options after mine closure generally takes years, rather than months,” she states.

“There are resources within the business which can be leveraged over time, to be invested in skills development and preparation for alternative livelihoods.”

While mines generally invest in training that feeds into the direct needs of the business, the skills development imperatives for social closure must be broader.

Employees can also be encouraged to take up this training by being given time during working hours.

With the funding resources available through the mine’s skills development levy – as well as human resources allocations in the Social and Labour Plan – workers can be trained in a range of skills.

These skills, such as computer literacy, could be relevant to mining, but could equally be applicable in completely different industries.

“Early engagement with employees and their trade unions is a vital part of the process to address the social impact of closure,” she points out. “Finding out what preferences and options they have is an important starting point.”

A skills audit among employees is a useful baseline to inform mine strategies and decisions, and can help to identify the right training opportunities for improving future employment prospects.

This goes hand-in-hand with building a closer and ongoing relationship with employees to encourage their ideas and feedback for the future.

“In our experience, many workers want to stay in the mining industry – so the assistance they need may require some engagement between the mines in the vicinity to identify future opportunities,” she highlights.

In a project in central Asia, many employees wanted to learn English; allowing them to look beyond the country’s borders in considering jobs at other mines. In mining regions such as South Africa’s platinum or coal mining areas, employees could be registered on an unemployment database – to be shared between nearby mines for mutual benefit.

“Alternatively, it may be possible for some skills or trades to be deployed in other sectors, and mines could help with guidance on this.” Identifying potential for employment in these sectors is one avenue, but there is also scope to partner with government agencies that support small businesses locally.

“This could assist employees to start up their own income-generating initiatives after retrenchment, or could generally build the capacity of local enterprises to absorb retrenched workers.”

A useful foundation for engaging with employees is a social transitioning communication plan, which mines can develop to prepare employees to adjust to the idea of closure.

This provides an important channel for suggestions and input that help identify and prioritise needs.

“Mines can then better communicate their retrenchment policies and procedures, so that each worker has clarity on what they are likely to qualify for on closure,” Edwards outlines.

“Getting closer to employees’ concerns and aspirations is valuable when designing initiatives.”

She reiterates that effective social transitioning through mine closure demands time and resources, and should be seen as a vital aspect of mitigating the potentially devastating social impacts of mine closure.

This article is the fourth in a series of five, in which experts from SRK Consulting share experience, lessons and insights that contribute to resolving this inevitable challenge. This article focuses on how mine employees can be launched into new avenues outside of direct mine employment.

By way of context, the first article in this series argued that sustainable social transitioning begins with a paradigm shift in corporate thinking – moving away from seeing communities as beneficiaries and rather appreciating the assets that exist in the community as resources for building sustainability.

The second article considered what this means in practical terms, with a focus on some of the lessons learnt by mines in helping create self-sustainable community projects.

The third article highlighted the importance of economic diversification in the local economy of a mine – and how mines can promote such diversification through the way they manage their supply chains and other resources.

In the fifth and final article in the series, the experts tackle the conundrum of how a mine should engage transparently with community stakeholders about mine closure.

SRK Consultinghttps://www.srk.co.za
SRK is an independent, global network of consulting practices in over 45 countries on six continents. Its experienced engineers and scientists work with clients in multi-disciplinary teams to deliver integrated, sustainable solutions across a range of sectors – mining, water, environment, infrastructure and energy.