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Home is where the mine is

Gold miners put workers’ accommodation high on the agenda.

South Africa’s gold mining sector has spent R1.5 billion on creating accommodation for workers over the last ten years. This is Gold – an initiative which provides insight into the South African gold industry, consisting of AngloGold Ashanti (AngloGold), Sibanye Gold (Sibanye), Goldfields and Harmony Gold (Harmony) – presented an update Thursday on the progress made towards addressing the living conditions of mineworkers.

The Mining Charter dictates that the sector provides a stable housing environment for those living on mine property or in adjacent communities and is one of the biggest transformation challenges confronting the industry.

Martin van Heerden, general manager of property development at Harmony, said the company had already spent R211 million converting hostels to single accommodation (one person per room) in the last two years, while it had already committed to converting another two hostels into some 1 100 family rental units by end of 2015 at a cost of R350 million.

“We’ve spent about R600 million on housing and accommodation since 2006,” said Dawie Mostert, senior VP of operational effectiveness at Sibanye, who believes housing and accommodation is among the top five priorities for the industry. “The key focus for us going forward is affordability, both for the companies at large, as well as for the employees. We are fortunate at Sibanye because we’ve got a healthy stock of houses that we can sell to employees.”

Accommodation built by This Is Gold initiative since 2005

Company

Name

Single Quarters (built or converted)

Housing units for family accommodation built

AngloGold Ashanti

8 817 rooms

5 453 units

Goldfields

845 rooms

1 148 units

Harmony

8 500 rooms

1 825 units

Sibanye

12 281 rooms

6 740 units

Source: This Is Gold

AngloGold spent almost R420 million between 2005 and 2014 to achieve a 98% single accommodation rate, while all residences that were previously classified as redundant have been converted into family units. Goldfields has also made progress, spending R75 million since the unbundling from Sibanye in 2010.

“We have achieved the one person per room target … and are now looking at adding rooms for visiting wives. The focus for us is to encourage and facilitate home ownership in some of these developments.” said Sven Lunsche, VP of corporate affairs at Sibanye.

Still many challenges

This Is Gold listed a number of concerns and challenges that stem from the deficit in housing due to many people migrating to mining areas in search of jobs, putting enormous pressure on those municipalities’ resources. Providing decent accommodation for growing numbers of people is especially difficult under current conditions, given the age of the mines, the life expectancy of mines and size of mines.

There is also the challenge of striking a balance between providing housing for ownership and rental accommodation. Some of the workers come from far-away places where they are already paying mortgages and are not necessarily looking to buy new houses, said AngloGold’s VP of human resources Ian Heyns.

Indebtedness has also caused distress within the sector and resulted in the inability of many employees to access credit due to bad credit records, preventing them from achieving home ownership. Furthermore, there is the issue of the living out allowance (LOA) – an additional stipend (minimum of R2 000 since September 2014) provided to employees opting to live outside company-provided accommodation, which has had unintended social consequences with many mineworkers not using it as it was intended, but instead supplementing it with their wages, and using to service debt or to send money home to their families in rural areas. Because of this, the gold miners are now considering a review of the LOA.

Mining Charter

When the Mining Charter was reviewed in 2009/10, the new version set more specific targets, some of which were for mining companies to convert or upgrade hostels into family units, attain the occupancy rate of one person per room, and facilitate home ownership options for all mine employees in consultation with organised labour – all of which was to happen by the end of 2014.

By the end of this month, mining companies and their operations will have to submit their annual progress report on Social and Labour Plans (SLP) to the Department of Mineral Resources detailing how they plan to achieve compliance with these conditions and other aspects of the mining charter, which are a pre-requisite for the granting of mining rights.

Progress towards reaching 2014 targets

mining charter

Source: This Is Gold

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