Issue 14

A More Qualified Solution: Raising education levels helps improve mining productivity in South Africa

By Tom Dale
Managing Director, Gold Fields Ltd

It’s like trying to take the filling out of sandwich.

That simile explains why South African gold has never been easy to extract. The ore deposits run in a series of thin layers deep underground and only rarely break the surface. It was not nuggets of gold, but diamonds, that originally drew prospectors to the country in 1871. When an outcrop of gold was discovered on a farm just outside Johannesburg about 15 years later, it was only the tip of a well-hidden iceberg.

The thin reefs running throughout the Witwersrand Basin in a curve around Johannesburg were deposited between 3,000 and 2,700 million years ago. They typically plunge at a 25-degree angle to depths of 5,000 metres (three miles) or more - bottom has not been reached. The deposits average 25 centimetres (a little less than a foot) in width, and the underground excavations used to mine them are called stopes. What makes it even more difficult to extract the gold layer is that this is a sandwich with extremely stale bread - the rock surrounding the deposits is quite hard.

Despite these changes - the depth and narrowness of the deposits and the hardness of the bedrock - South Africa has grown into the world' s largest producer of gold before the turn of the century, a position it still holds today. However, its share in a growing world market has been declining steadily for a number of years as its production costs have risen to become among the highest in the world. Whilst falling grades and the ongoing complexities of deep hard-rock mining have been contributing factors, the major reason has been that increases in labour costs have not been matched by increases in lab our productivity. About half the cost of producing gold in the Wits Basin is payroll related. During the last decade, periods of a flat rand gold price combined with escalating costs have led to higher pay limits (break-even grade) and shrinking ore reserves.

Meeting the Challenges

The industry's main response to the challenges it faced in order to survive was to reduce the scale of operations (tonnages mined and milled) and to increase ore grades, leading to substantial job losses. Although reducing jobs led to statistically improved productivity based on gold produced or tons mined per employee, it did not improve productivity at the core of the business.

The only way to address that issue is to use a holistic approach, calling for a number of initiatives to restructure the business and the jobs and roles of people. Given training and development, coupled with appropriate reward systems, employees can work effectively in new ways. Gold output can increase, pay limit s can be lowered and investor confidence increased, bringing about real gains in international competitiveness.

Increasing Productivity

To briefly outline the mining process in South Africa, permanent roadways are constructed through the waste rock to reach the stopes themselves, which must be kept low in height in order to minimise accumulation of waste rock surrounding the thin deposits. They average only a metre in height - slightly higher than an office desk. Within this opening, holes approximately four feet deep are drilled into the end wall, packed with explosives and remotely detonated. The broken ore and waste rock are cleaned out and transported above ground to be processed. A support system must then be constructed before the process can start over again.

Each miner was traditionally responsible for 500-600 feet in area, consisting of several stopes, and blasting occurred once every three days. If the frequency of the blasts could be safely increased, there would be enormous potential to improve productivity. The key lay in educating more workers who could then potentially b eco me miners, thus allowing the area of responsibility for each to be reduced.

Improved supervision allows for better control over each area, and it then becomes possible to safely decrease the time between blasts, our goal being to have daily blasts. It also means better control over the Mine Call Factor - maximising the grade of ore coming out of the stopes.

Raising the education and training levels of previously illiterate workers not only improves productivity but also reduces accident s and provides career path s for those previously disadvantaged. Formerly, conditions were characterised by poor education, legal restrictions on qualifications for many, wide geographical supervision spans, excessively large work teams and privileged opportunities and remuneration for a few. This resulted in tall vertical hierarchies. Now education, training and qualification based on merit, the concentration of a high density of skills at the rock face and smaller supervision spans have resulted in a vertical hierarchy that has been virtually halved.

Education and training

This strategy will not be achieved overnight, but progress is being seen. ln 1994/95 a survey of 40,000 employees was carried out to assess literacy and numeracy levels in the former Gencor gold mines. Ninety-seven per cent of the population possessed sub-grade 3 levels of numeracy (about the level of a 10-12-year-old) , and 91% possessed sub-grad 3 English literacy. An adult education programme was then implemented with the full involvement of the National Union of Mineworkers and expand d into the new and larger Gold Fields. Fully six per cent of all employees are in part and full-time training, distributed between the lower numeracy/literacy levels of training, and the advanced training of grade 9 candidates and mining and engineering candidate.

To date, 800 qualified miners from the formerly disadvantaged employee group have entered the programme, with a further 400 such miners to be trained per annum. Seven miners have already progressed to become candidates for aspiring manager ranks as trainee Mine Overseers.

Many of the principles embodied in the above types of restructuring have been tested successfully in the former Gencor. The lessons learnt will be employed to optimise the process in Gold Fields and to sustain the benefits achieve d in both costs and efficiency.


Gold Fields believes that South Africa can regain its competitive edge, and it is vital that it does so. Given the environment of a growing global market, the industry offers the greatest single employment opportunity of any in the country for those that can successfully meet the challenges posed by international competitors and the dynamic gold price and currency exchange rates.

The industry must urgently focus on safety and productivity at the face, and on overall cost-effectiveness, which will lead to re­ establishing an international competitive edge. Genuine productivity increases that result in a lowering of pay limits with a consequential increase in ore reserves, a lowering in the cost of capital and infrastructure - all underpinned by the development of people - represents the only way forward.

Tom Dale is a managing engineer who has worked for 22 years in the South African gold mining industry. He also spent four years as a mining analyst with a Johannesburg stockbroker. He became Managing Director of Gengold in July 1995 and was appointed Chief Operating Officer of Gold Field Limited on the formation of the company in January in 1998. He became Managing Director of Gold Fields Limited in May 1998.