PAR’s Excellence in Community Engagement & Labor Relations

Pan African Resources (PAR) is a gold mining company operating a portfolio of mines in South Africa. It also conducts several gold exploration projects in Sudan. The company has the capacity to produce more than 200,000 ounces of gold annually from its Barberton and Evander mine operations and tailings reprocessing plants in South Africa.

PAR is expanding its operations with additional projects and is currently constructing a new tailings retreatment plant in the Mogale area of the Gauteng province. The tailings reprocessing project will increase PAR’s output, improve profitability, and reduce its environmental impact as it strives for sustainability.

Apart from government permits, mining companies in South Africa also need public acceptance or a ‘social licence’ to operate in the right environment. This article explores how PAR manages its relationship with its workforce and host communities and how this helps the company maintain its social license to operate and create long-term value for its investors.

Labor unrest is a common challenge for mining companies in South Africa. When mine workers strike, production stops and costs can soar for these companies. Frequent labor conflicts can also hurt a company’s reputation and erode its competitiveness in the market. PAR has adopted strategies that support labor harmony and operational stability.

Organized labor can be a problem for companies as many fear that unions will increase their labor costs and reduce shareholder value. This is just one way of looking at it, whereas PAR sees a solution in the organized workforce.

The company has, therefore, adopted the practice of seeking long-term wage agreements with its union workers. As an example, in 2021, PAR reached a 3-year and a 5-year wage agreement with two separate unions representing the majority of its workers at Barberton mines. However, at the Evander mines, most of PAR’s workers are not part of any labor unions due to their contractual nature.

These long-term wage agreements promote labor peace, resulting in operational stability and certainty of earning for the workers. But there is a difference between a calm workforce and a motivated workforce. While multiyear wage deals are good at promoting labor peace, PAR also works toward building a motivated workforce through effective communication practices.

A motivated team is more productive, more innovative, and more supportive towards their company. The result is that a company with a motivated workforce can improve its workplace safety and business performance. As part of this initiative, PAR’s employee compensation package includes several benefits and incentives on top of the basic salary. These benefits include life insurance, healthcare, maternity leave, retirement plans, disability coverage, and share options.

A major concern for mining companies about long-term labor agreements arises from uncertainty in business performance. PAR’s focus on sustainable mine operations has helped it overcome this challenge. With balanced production and innovations that help extend the lifespan of its mines, the company operates in a more certain environment. The company has not experienced industrial labor action at its mines in a number of years and it also maintains a stable workforce with an annual staff turnover of only about 10%.

PAR is cognisant of the fact that having the right workforce skills is important to meet operational and strategic objectives, so the company implements ongoing learnership programs to upskill its workers.

PAR spent $2.2 million on skills development and training for its workforce in the financial year to June 2023. The company delivers workforce skills development through higher education bursaries and other knowledge transfer arrangements and contributed $170,000 towards full-time bursaries for more than a dozen of its workers pursuing university degrees. The skills development and training programs also help prepare workers for career progression in the company.

PAR not only focuses on upskilling and training its workforce to meet operational needs and enhance workplace safety but also invests in alternative skills development. By sponsoring courses in sewing, welding, carpentry, motor mechanics, construction, and poultry farming, PAR prepares its employees with valuable skills for future opportunities, especially should they face retrenchment.

PAR is deeply committed to empowering the communities surrounding its mining operations, recognizing that the success of its activities is intertwined with the well-being of these local populations and also that it does not need to import skills from elsewhere. The company’s approach to community empowerment is multifaceted, focusing on improving the quality of life and addressing the long-term needs and priorities of these communities. This commitment is not just a corporate ESG (Environmental, Social, and Governance) responsibility but a strategic imperative for the sustainable success of its mining operations in South Africa, especially in small mining towns where the mine is usually the largest employer.

Contributing to community development is an effective way for a company to build strong community relations that enable a stable operating space. PAR supports various development initiatives in its host communities to care for and help their workforce. These include contributions to health, education, infrastructure, and local business development.

The company also regularly supports local NGOs including child care centres, child-headed households, frail care centers, and old age homes, many of which would not survive without contributions from the mines.

Improving access to education and healthcare is a top priority for PAR in its community development efforts. The company partners with South Africa’s health and education departments on an ongoing basis to develop education and healthcare facilities.

Contribution to Education Access

Improving school infrastructure benefits the community and the company. For example, established infrastructure for schools encourages enrolment and reduces youth delinquency, which helps reduce illiteracy levels and develops the talent pool from which mines can hire future labor. PAR has funded the building, renovation, and equipping of several schools in communities around its mines.

At the Sheba primary school in Barberton, the company funded R7.5 million towards the development of a complete school infrastructure. These included the construction of 8 classrooms, an administration block, a multimedia block, a kitchen, a dining hall, washrooms, and fencing.

The company also upgraded Ngwane Primary School in Barberton. Built in 1946, Ngwane is one of the oldest schools in Barberton. It funded the construction of several classrooms, a kitchen, a dining hall, washrooms, an assembly shelter, and fencing. It also funded the renovation of the school’s administration block.

PAR handed over these schools to the Department of Education in Barberton following their completion. Additionally, the company has supplied equipment, furniture, and uniforms to a number of schools in the communities around its mines.

Through its adopt-a-school project, the company also provides mobile libraries to several schools. At its Evander mines, the company’s mobile library program has benefited thousands of students.

PAR supports several community health projects around its Barberton and Evander mines. These include the construction of healthcare facilities and contribution to healthcare services, nutritional, and hygiene programs.

In Barberton, the company funded the construction of Cathyville clinic at a cost of about R14 million. The facility provides an 8-hour day access to healthcare to Barberton communities.

PAR also provides nutritional meals for community members, TB and HIV patients, and orphans.

As part of the efforts to improve hygiene and living standards in its host communities, PAR spent more than R7.5 million to upgrade a major sewer line serving its mining communities.

PAR has also commenced with health awareness campaigns, highlighting the causes and preventative measures to guard against the ‘lifestyle diseases’ including diabetes, cholesterol and high blood pressure. The company has also launched a running club and sponsored the training of ultra-distance marathon athletes, three of whom finished in the top ten in the 2023 Comrades Marathon. One of these runners has been appointed as a coach by Barberton Mines, where a running club has been formed to encourage sporting activities and youth participation in sports, including youth from the host communities.

PAR has supported a broad range of infrastructure projects for the benefit of its communities. At its Evander mines, the company has funded high-mast public lighting in surrounding communities to assist with safety and security at night. Recently, two school infrastructure projects (fully equipped mathematics and science laboratories) were handed over to schools in the local communities around Evander.

The company has also funded water and electricity access projects in communities around its mines. It has contributed to water tanks and assisted with the maintenance of water sources to provide access to potable water to communities around its Barberton and Evander mines.

Its other infrastructure projects include upgrading sanitation facilities at community markets.

PAR has identified skills development as one of the most impactful community development initiatives. Investing in community skills development helps in building a pool of skilled local workforce. As a result, the company can hire more of its workforce from surrounding areas, contributing to the development of local economies.

As part of its skills development program, PAR sponsors high-achieving but disadvantaged students from its mining communities through high school, better preparing them for tertiary education. It provides fully funded bursaries for higher education to qualifying students in communities around each of its operations. The bursaries cover tuition fees, accommodation, textbooks, and a monthly stipend.

The bursary students pursue various courses, including engineering, science, and management, at Johannesburg, Pretoria, and Wits universities. Many of these bursary students get jobs with PAR after they complete their studies and qualify professionally for open positions.

Apart from sponsoring higher education programs for community students, PAR supports entrepreneurial skills training for community members. The skills training helps community members set up businesses that service the mine.

In Evander, the company runs programs that provide training, mentoring, and financial assistance to local startup businesses so that they can access supplier opportunities at its mines, and also become employers of community members. Moreover, skills training helps people in the community who may not want to work directly in the mines.

Through investing in advanced technologies and working with specialist independent service providers, PAR seeks to give its mines the longest life possible. However, mines have a finite life and they eventually have to close.

A mine closure can result in the loss of jobs and economic opportunities for the host communities. While many of its mines have many years of remaining mine life, PAR works in advance to prepare its communities for the future beyond mining.

PAR has initiated several sustainable development projects that will benefit its host communities long after the life of its mines have come to an end. These projects include a solar power plant in Evander mines and a blueberry farm in Barberton. The blueberry farm in Barberton is a massive agricultural project initially covering 15 hectares of land with the potential to expand into a 45-hectare farm. The farm aims to produce 300 tons of blueberries annually for domestic export markets in Europe, the Middle East, and Asia. The project provides jobs and skills transfer opportunities for community members.

These projects make use of the company’s resources such as water and land to create jobs and business opportunities outside mining operations, thereby supporting sustainable local economies beyond the mine life. In light of developing sustainable communities, PAR also supports programs to help people around its mines obtain portable skills and business opportunities. It sponsors training workshops for community members on practical skills such as clothing manufacture, carpentry, welding, construction, and motor mechanics.

For a mining company, appreciating and supporting local cultures is an important part of nurturing the social license to operate. To deliver meaningful social benefits to its host communities, PAR has made it its business to respect and support its mining communities’ cultures, customs, and values.

The company is planning to build a social hall for a community in Barberton. The hall will provide a safe indoor meeting space for community cultural, art, and other events. The hall can also be hired out for private functions to generate income that can go toward its upkeep.

PAR has also sponsored several sports, art, and cultural initiatives. In sports, they provide financial support to football associations in their mining communities to go toward identifying, nurturing, and developing soccer talents. They also sponsor art workshops to nurture music, the production of several films, and video art talents in its communities. The films include a national television series focusing on social issues around health, gender-based violence, and illegal mining.

By supporting sports and arts talent initiatives, PAR contributes toward developing talents, providing job opportunities outside mines, and reducing crime in its communities.

PAR continually innovates to improve its mining practices and results. Its use of advanced software technology in geological exploration leads to more efficient and effective exploration activities.

By investing in advanced technologies in its exploration and mine operations, PAR has expanded its skills demand, resulting in more job opportunities for professionals in its communities. Moreover, leveraging advanced technologies in its operations has helped the company improve its production yields, improve workplace safety, reduce operating costs, and prolong the life of its mines.

Additionally, advanced technologies are also helping the company to minimize the environmental impact of its operations. As a result, the company can provide stable jobs for its workforce and contribute to more community development projects.

Maintaining good relations with the workforce and communities supports operational stability. PAR invests in transparent communication of its achievements and by building strong labor and community relationships as part of its sustainability efforts. Multiyear wage agreements contribute to labor stability and community development contributes to the license to operate. These benefits flow back to investors through long-term returns. Since the mineral resources of a mining operation are not infinite, PAR pursues long-term value for its investors and simultaneously works to leave behind sustainable communities.