HIV and AIDS risk management at Rustenburg Section, Anglo Platinum

Abstract

The Bushveld Complex in South Africa continues to supply over 72% of the world's annual production of platinum. Increasing global demand has placed pressure on major South African platinum producers to develop production into the UG2 layer despite its lower platinum concentration, through utilising mechanised mining techniques. South Africa, however, is facing another pressure; HIV and AIDS. With prevalence rates as high as 25% on mine sites, intensive-labour mining methods will suffer through increased absenteeism, illness, productivity, morale and ultimately death unless the epidemic is effectively managed. Anglo Platinum has been a leading provider of effective and lasting management programmes such as antiretroviral treatment (ART), health care, orphan care and employee's family housing for a number of years. With the increasing demand to develop mechanised techniques within the UG2, the study investigated whether the costs of HIV and AIDS management associated with a smaller labour force in mining the UG2 reef alone justified a change in mining technique for platinum producers in order to increase profitability. A number of models were developed to measure the effectiveness of managing the epidemic or ignoring it completely relative to a base case (no epidemic) in both the Merensky and UG2 reefs. The analysis demonstrated that, by managing the epidemic, costs are minimal relative to the base case, reducing project value by only ∼3% for the UG2 reef and ∼10% for the Merensky reef. Ignoring the epidemic would reduce value by ∼6% for the UG2 and ∼23% for the Merensky reefs. As a result, the financial value lost on the UG2 project is significantly less than the Merensky project. However, with the continued strength of the South African Rand and surging platinum prices most platinum producers have cut back on expansion focusing on higher-grade material available within the labour-intensive Merensky reef as these two variables have a far greater sensitivity on profitability than HIV/AIDS management costs. Whilst mining and its related industries continue to provide ∼40% of South Africa's GDP they have an extensive intellectual capital with practical experience to offer the Government help mitigate the many and extensive risks associated with the epidemic.

Keywords:

• PLATINUM MINING
• HIV/AIDS
• PROFITABILITY ANALYSIS