Essays on International Business History: Development of Mining in South Africa Case Study

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The paper "International Business History: Development of Mining in South Africa" is a good example of a business case study.   South Africa is endowed with a wide range of minerals. The country is hailed for being the principal world reserve for various minerals such as platinum group metals, gold, chromium, manganese, alumino-silicates and vanadium. Other minerals found in South Africa include coal, iron ore, uranium, nickel and diamond. It is estimated that mining contributes to over 5% of the country’ s GDP. The mining industry in South Africa has been one of the major employers of people of southern and central Africa in over a century.

It was reported that the industry employed over 600,000 people in 1992. Main employees in these mines are black migrants hailing from rural districts. Development of mining in South Africa Archaeologists have reported that mining of minerals in South Africa dates back to middle Stone Age where various minerals were used for decoration purposes. It is also reported that 19th-century  records indicate that black people obtained minerals from the surface and mined them by making holes in the surface of the earth.

True mining in South Africa is reported to have started in A. D. 770. Excavation by archaeologists indicates that there are dozens of mines that represent vertical or inclined shafts containing galleries that lead to solid rock cut into which dates back to this period. It is reported that during this time, Iron Age people acquired iron ore exposed by soil erosion for smelting and that mining involving sinking only evolved when the population increased (Mason, 1982). Gold It has been reported that from ancient times to 1989 over 40% of all gold ever mined came from South Africa.

Earnest mining in South Africa began in 1887 and it is at this time that Johannesburg began to fill with settlers. By 1970, South Africa accounted for more than 70% of gold production among the non-communist world. However, the production of gold fell drastically between 1970 and 1990 mainly due to technical problems and high costs, which were attributed to labour-intensive methods and deep mines (Wilson, 2001). The drop in gold prices in 1999 to a low of $250/oz was bad news to South African companies, gold miners and government.

Although this rose to $290/oz in 2000, the gold industry had undergone dramatic changes in both South Africa and globally (Jones, 2010). The empowerment of blacks in South Africa mainly focused on the gold industry. This resulted in a change of ownership structure in the industry. Harmony Gold Mining Company has led the empowerment movement and it recently merged with ARMgold that was owned by African Rainbow Minerals. Although South Africa is the largest gold producer in the world, its production is estimated to have fallen by 6.5% in 2003 (Jones, 2010).

In spite of this, gold export still accounted for approximately 37% of dollar export revenue. Most of the gold mines in South Africa are underground operations and stretch as deep as over 3.8km. The grades of gold in these mines are declining, mining depths are increasing and the gold prices are sliding and as a result, the cost of mining has increased (Miller, Desai and Lee-Thorp, 2000). Consequently, there has been a steady fall in gold production in South Africa. In order to cut costs, many mining companies have restructured themselves and consequently resulting in massive layoffs of employees.

It is argued that increased productivity of gold in South Africa is the main determinant of this industry’ s future.


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