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Human Resource Development and Social Betterment

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6.2.2 Human Resource Development and Social Betterment

South Africa

Initiatives to develop the skills of employees have been undertaken mainly by the large onshore mining companies who employ a significant staff complement of mainly low-skilled workers. Onshore human resource development initiatives by large companies include the establishment of trusts to fund training; sponsorship of community needs (such as clinics); conducting skills training at mining towns; and developing alternative land uses. Training on mines has been fragmented, however, and qualifications are not nationally standardised, leaving most employees with little improved chance of finding jobs.
DBCM, for instance, together with Anglo America, contribute to the Chairman’s Fund, which is the largest corporate contributor to educational and social development in South Africa. In 1997, the fund made donations totalling over R56 million of which De Beers contributed R18.5 million. Most of the funding is invested in education.

To improve financial viability of mining, extend the life of the mines, and create jobs, some of the larger companies are investigating, or are already undertaking, alternative land use activities. Alexkor has mariculture and farming projects underway, and have further plans for mariculture expansion. The company, in conjunction with the Northern Cape Government, is also investigating tourism and other land use development options with a view to providing up to 700 jobs (if all plans reach fruition). DBNM are awaiting approval to start abalone cultivation and harvesting of Gracilaria and are considering other projects such as hemp cultivation and other agricultural projects. It appears that mariculture ventures undertaken by diamond mining companies in their processing dams would not otherwise be financially viable and can be considered a positive spin-off. It is not known whether these ventures would remain viable after mine closure, however. Unfortunately, the success of many of these projects will depend largely on the availability of fresh water - a scarce resource along the Namaqualand coast.


Namibia’s Minerals Act, 1992, requires holders of any mineral licence to: give preference to Namibian citizens with appropriate skills; carry out training programmes to promote the development of Namibian citizens; make use of products, equipment and services produced and available within Namibia, and co-operate with Namibians involved in the mining industry to promote skills development.
Namdeb took initiatives with Namibian small contractors in 1990 after pressure was exerted to expand shallow water operations in Namibia, similar to those that had been operating in Namaqualand since the 1980s. However, many small contractors operating from the beach south of Lüderitz failed to make a profit because of adverse working conditions and operational problems. Larger-sized “small contractors” operating from boats (e.g. Yam Diamonds) and others produced over 132 500 carats in 1994. Small contractors employ roughly 250 people, most of whom live in Lüderitz.
In line with government policy and to prolong the life of the mine by reducing overhead costs, Namdeb has privatised most non-mining activities in its mining town of Oranjemund, which are now run mainly by black entrepreneurs. The diamond industry has also benefited the local economy of Lüderitz (which houses its Elizabeth Bay mine) through the payment of wages (estimated at N$8 million), local sponsorship and direct business (N$3 million).

6.3 Socio-economic Environment – Negative Impacts

6.3.1 Shifting Emphasis from Onshore to Offshore Mining

The intensity of onshore diamond mining in the coastal zone is in decline with a shifting emphasis to offshore operations. This is likely to have far reaching implication for aspects such as employment and skills training in both South Africa and Namibia.

Impact on Employment: The number of employees in South Africa’s onshore diamond mining industry as a whole has declined from over 19 500 in 1992 to less than 15 000 in 1997 (a rate of approximately 2.5-3% per annum). Alexkor and DBNM have been scaling down onshore operations and will continue to do so over the next 25 and 10 years respectively, as diamond reserves are depleted. Between the two companies, a minimum of 1800 jobs has been lost since 1992. The majority of employees in onshore diamond mines are from Namaqualand, about 80% of which are low-skilled workers. Mine retrenchments will therefore exacerbate the already dire unemployment situation in Namaqualand unless alternative employment sources are found. The unemployment rate in rural areas of Namaqualand has been estimated at 60% - a problem that has been compounded by the decline of the fishing industry, particularly the rock lobster industry.
Loss of jobs due to downscaling is not restricted to South Africa. Downscaling through natural attrition, facilitated by retirement and voluntary retrenchments, is ongoing in Namibia, and will continue over the next two decades exacerbating the already high unemployment rate in this region (estimated at about 34%).

The decline in onshore mining has occurred in parallel with a rapid growth in marine mining. Onshore mining companies are shifting the focus of their activities towards marine mining, and other companies have entered the diamond mining industry (e.g. Ocean Diamond Mining, Nautical Diamonds, BENCO). Marine mining is a highly specialised activity, requiring high capital inputs in the form of purchasing, maintaining and equipping mining vessels with technical processing equipment. Relative to onshore mining, marine diamond mining requires lower inputs of low-skilled labour - up to 10% (in contrast to the 80% in onshore mines). With the present lack of alternative job sources in Namaqualand, the majority of workers retrenched from onshore mines in the next decade have little chance of finding work in the offshore industry. Furthermore, because a high level of skills are required for offshore mining, the majority of staff is recruited from urban centres overseas and in South Africa, particularly impacting Namibian employment. DeBeers Marine, for instance, employs qualified British Marine Officers because of the lack of qualified South Africans or Namibians. This is set to increase, as more mining vessels become operational – DeBeers Marine, ODM and Namco are all planning to augment their mining fleets by one vessel in the next two years.

In the absence of alternative employment in Namaqualand, many retrenched workers will, in all probability, relocate southwards to Cape Town or Saldanha (the centre of the West Coast Investment Initiative), attracted by the prospect of industrial expansion and job creation. For those that remain in Namaqualand, the loss of jobs and financial hardship that this will create may cause greater dependence on the natural resource base. This may include increased pastoralism and resultant overgrazing of sensitive coastal vegetation as well as increased collection (largely through poaching) of coastal shellfish resources (abalone, mussels and rock lobster).
Impact on Skills Training: With continued job losses due to downscaling of onshore mining activities, fewer training and skills enhancement opportunities will be available for unskilled workers thereby compounding the unemployment and poverty problem in rural mining areas. Migration of workseekers to other urban centres is likely to erode the economic support base of the former and compounds the unemployment problem in the latter. Offshore mining also provides fewer training opportunities for low-skilled employees, limited mainly to sponsorship of students to study engineering-related courses.
Mitigation: There is no direct mitigation that can be undertaken to stem the loss of jobs resulting from declining coastal reserves. Investment in training and investigation of future landuse options, however, are indirect means to provide opportunities for self-help.

Onshore and offshore mining companies are implementing training programmes that target upgrading of skills which will improve the chances of employees obtaining secure jobs in the post-mining environment. These companies should allocate a certain proportion of annual turnover to training and sponsorship for education. In line with the new Minerals Policy and Mine Health and Safety Act, which gives employees the right to education and training, the South African government has undertaken to promote Adult Basic Education and Training (ABET), and in particular, to ensure that people in the minerals and mining industry have access to quality education and training. The South African Qualifications Authority Act is also working towards standardising, at a national level, the qualifications achieved by training on mines.

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