Track: Operations Management

Abstract

The junior coal companies in South Africa are facing a number of challenges which have contributed to poor performance, resulting in some of them having to close down. The SA government developed a mining charter which encourages 26% black ownership (Broad Based Black-Economic Empowerment) in mining companies, which aims to support junior miners. In addition, Eskom has also developed a policy that enforces that 40% supply of thermal coal must come from junior miners. As a result, Richards Bay Coal terminal in conjunction with Transnet increased its capacity to boost junior coal miners. Despite this support that junior coal miners are getting, they still face operational challenges which range from finance, transportation, production, and lack of skilled personnel. This has caused a number of junior miners to shut down their operations as the taxes, royalty fees and community investments continue to be a burden. Data was collected using questionnaires as well as personal interviews. The study revealed that the most common challenge for the junior miners is lack of capital and financial support. The lack of finance has led to junior miners not being able to afford relevant industry skilled personnel.