Platmin Mining: Managing Your Stakeholders in Developing Economies

Author :

Albert Wocke, Robert Grosse

Pages :

17

Product Type :

Case

Reference # :

9B11C012

Teaching Note :

8B11C012

Institute:

Ivey Publishing

Setting:

South Africa, Large

Year:

2009

Keywords:

Business and society; Developing countries; Industrial relations; Government and business; Stakeholder management, Organizational Behaviour/Leadership, General Management/Strategy

Summary/Abstract:

This case deals with the problems that Platmin faces as it heads toward full production at a new open-cast mine in the Pilanesberg area in South Africa. Platmin is caught in a very difficult situation that is affecting the viability of the operation: the main issue is the timing of the production - investment in mining is typically heavy in the beginning, but when the mine starts producing, payback of loans is usually substantial. Any delay in production has an exaggerated effect on the payback period and, by extension, the viability of the mine. The second major issue is the economic downturn, which has seen the price of platinum decline substantially; however, this may benefit Platmin because it is a low-cost producer, and the downturn has led to some competitors leaving the industry or mothballing operations that are not viable at the current platinum price. On the other hand, while Platmin is seeing a shakeup in the industry, it is experiencing pressures on its margins, and this also has an effect on its capital funding. Learning Objective: This case has been used successfully at the MBA and executive education level in courses in human resource management and international business. The human resource (HR) course focused on the context of HR management and stakeholders involved in HR decisions. The international business application of this case concerns doing business in emerging markets; specifically, it involves exposing students from developed countries to the tensions and nuances of doing business in emerging markets with different rules and regulations.