Mining Industry Overview

8. Consultative processes

At every phase of the life of a mine, consultation should take place between the various stakeholders. Formal structures are established to facilitate some of these processes.

Regardless of their legal obligations, it is of benefit to mine developers of any size to establish constructive working relationships with surrounding communities and indeed with the population at large, from the very earliest phases. In doing this, it is important to gain a clear understanding of local and traditional leadership structures. Mine operators can gain tremendous goodwill by constructive, sincere engagement with communities and by providing them with legitimate, tangible benefits. These relationships can lead to savings far exceeding their cost to the company. It is essential that any promises made are real and are fulfilled; failure to do so can quickly destroy relationships and lead to costly, protracted disputes.

Various mechanisms can be set up for community relations and may already exist prior to the advent of a mine.

Public relations

Large companies often have departments responsible for public relations, whose functions include media relations and distribution of material promoting the image of the company. Websites are set up at relatively low cost to publicise the positive achievements of the organisation. Annual reports to shareholders of public companies tend to contain prominent sections devoted to corporate governance issues: health and safety, environmental protection, climate, biodiversity, community engagement, indigenous relations, gender diversity and similar, topical matters. Companies publish separate, glossy reports on these matters and, again, use websites to highlight them further.

Structured communications towards workforces

Mines tend to employ very large workforces and, once again, a structured system for communication and consultation is very desirable. Legislation often requires formalised consultation with worker representatives, especially on health and safety matters. Some countries, e.g. Zimbabwe, have legislated complex consultative arrangements between employers and employees. Once again, the sincerity of company managers in their dealings with worker representatives is essential to mutually beneficial relationships.

Effect on share prices

Company boards of directors put considerable thought and effort into releases of information to the media, ever conscious of the effect that an announcement can have on the share price and therefore the company’s market capitalisation. Market capitalisation is a measure of the value of a company obtained by multiplying the prevailing share price on the stock exchange by the number of shares in issue and is a key indicator.

Relationships with unions

Unions can play a very constructive role in industrial relations but can also create difficulties due to unrealistic expectations of the employer, often due to ignorance of reality on the part of union officials. Governments sometimes have to intervene in disputes to ensure that, on the one hand, the genuine rights and aspirations of employees are protected, and on the other hand that the viability of the operation is not put at undue risk due to excessive demands by unions. Union leaders often have political aspirations and areas of dispute with employers can become politicised and attract unwanted, negative exposure.

Sharing expertise

Vehicles for consultation between mine operators are many and varied. In many countries, mining associations have been established to facilitate this process, to mutual benefit. Representation might be at multiple levels. Technical associations might exist as a forum for exchanges of information between different mines and mining groups, and these associations often engage in close dialogue with senior officials of the ministry of mines over regulatory matters. The Association of Mine Managers of South Africa (AMMSA) and its Zimbabwean counterpart, the AMMZ, have similar objectives of sharing expertise between mines, especially through visits and presentations of technical papers, and maintaining close ties with the ministry of mines. These associations give comments and recommendations on regulations and assist the ministry with conducting examinations for statutory certificates of competence including blasting licenses. They also participate in management of mining educational institutions, e.g. the Zimbabwe School of Mines and in co-ordination of mine rescue teams.

These associations are chaired by active mine managers.

In both countries, the Chamber of Mines exists for liaison at a higher level and also to represent the industry in liaison and negotiations with the government and with trade unions.

The chambers are usually chaired by the chief executives of major mining groups.

The annual general meetings of all of these organisations are important events in the local mining calendar, usually attended and addressed by the minister and reported on in the media.

Professional institutions

Professional institutions exist at local and international level, e.g. the Institute of Materials, Minerals and Mining (IMMM or IOM3, again acting as a forum for exchange of expertise between professionals in different disciplines. The IOM3 also acts as a professional registration body and corporate membership is considered a qualification.

Any country in which a significant mining industry is emerging is likely to derive great benefit from the formation of similar organisations and the time and expertise offered freely by senior industry officials can assist the ministry of mines substantially in all of its objectives.