AFRICAN GOLD, INC.

MEMBERS:
ALEJO, JANICA
DELOS SANTOS, BEATRICE
PABALINAS, JENCY
RAMOS, KYLE
I. INTRODUCTION / BACKGROUND OF THE
STUDY

• African Gold, Inc. is a mining company in South Africa, where 49 % of its shares had been
recently acquired by US-based company, Newton Mining Inc. As part of the acquisition,
Newton has designated some of its staff to work in the management and technical division of
the South African office to ensure increase in gold production and global acquisition of gold
properties.
• One of the major challenges that the new management team is faced with is the increasing
number of employees who are dying of HIV/AIDS-related diseases, cause of which is
identified not to be related to mining.
II. POINT OF VIEW

• Harry Goldstone / head of human resources for African Gold, Inc.

III. STATEMENT OF THE PROBLEM

• What course of action should African Gold Inc. take to balance the interests of
its stakeholders, in light of the criticisms against it regarding its human
resource policies on HIV/AIDS infected workers, without compromising its
profit within 1 year?
IV. STATEMENT OF THE OBJECTIVE

• To assess the existing health benefit package of African Gold Inc. employees, and consequently, identify
whether there is a need to revise the package in due consideration of the HIV/AIDS infected personnel
of the company.
• To assess the underlying costs and benefits in the current health benefit package offering of African
Gold Inc. in relation to HIV/AIDS infected personnel of the company.
• To establish the stand of the company regarding its role in protecting the legal rights of its employees
and diminishing the impact of HIV and AIDS within the workplace.
V. AREAS OF CONSIDERATION

Strengths:
• Provides for transport, coffin, and funeral costs for employees who die from non-mining-related causes
• Provides education programs to employees to increase awareness on HIV/AIDS
• Newly acquired colleagues from Newton Mining Inc.
V. AREAS OF CONSIDERATION

Weaknesses:
• Does not have exact figures of prevalence of HIV/AIDS present among workforce
• Increase in the costs of the company’s medical aid and disability programs due to HIV/AIDS-related
diseases
• Profits are deteriorating
• Depletion of funding course
• Increased number of deaths of the employees working for African Gold Inc.
V. AREAS OF CONSIDERATION
Opportunities:
• South Africa has some of the largest gold reserves in the world
• May purchase shares from other mining companies to acquire more gold properties
• Creating new HR policies may ensure that their obligations in the environment and society is also their
top priorities.
• Deal with Newton Mining Inc. may help build management and technical skill capacity in African Gold
Inc.
V. AREAS OF CONSIDERATION

Threats:
• Protest of the National Union of Mine Workers against African Gold Inc.
• Negative media coverage
• South Africa has one of the fastest growing HIV epidemics in the world
• The price of gold in rand terms fell 6 percent over the last few quarters
VI. ASSUMPTIONS

• It is not clear whether African Gold Inc. makes the right decision or not since
it depends on the law within the country.
VII. ALTERNATIVE COURSES OF ACTION

ACA 1:
The company should carry on with its current policy, without any change/policy revisions. For
example: there will be no reinstatement of benefits.
Advantages:
• Profits will be maximized as a result of reallocating finances that originally covered non-mining related
deaths/illness.
• Since Africa Goldstone is a small company, existing negative media does not provide as much coverage
as against other large players in the mining industry, thus negative media will not be sustained.
VII. ALTERNATIVE COURSES OF ACTION

Disadvantages:
• Employees continue to be under the health threat of contracting HIV/AIDS.
• Employees’ morale may be affected, and result in increased resignation.
• Possible legal issues initiated by the National Union of Mine Workers.
• Costs are projected to increase as a result from high work absenteeism, leading to productivity costs.
VII. ALTERNATIVE COURSES OF ACTION

ACA 2:
The company will reinstate the benefits to include financing of non-mining related deaths/illness.
Advantages:
• The company will have a positive image as perceived by its external and internal stakeholders.
• No negative media.
• This could lead to increased employee motivation.
• Decreased chances of being faced with legal issues.
VII. ALTERNATIVE COURSES OF ACTION

Disadvantages:
• Employees continue to be under threat of HIV/AIDS.
• Productivity does not improve significantly because employees are still faced with risk of HIV/AIDS.
• Higher spending for the company.
VII. ALTERNATIVE COURSES OF ACTION

ACA 3:
The company develops an HR policy to manage HIV/AIDS by assigning benefit caps based on occupation,
in sync with the education program on HIV/AIDS.
Advantages:
• Profit retention becomes more manageable, as costs are also manageable.
• Employee motivation might increase among regulars, and Union may stop any legal action against African
Gold.
• Interests of the stakeholders are balanced, without heavily compromising the profitability of the company.
• Employees will take more attention to health risks
VII. ALTERNATIVE COURSES OF ACTION

Disadvantages:
• Some employees may be against (especially the non-regulars), and the Union may still continue any
legal action against African Gold.
• The company still incurs unwanted cost.
VIII. CONCLUSION / RECOMMENDATION

• Given the alternative courses of action listed, it is recommended that ACA 3

should be taken, as it best balances the interests of the majority of the
stakeholders involved, while it also minimizes the negative impacts of policy
change on the company’s long term profitability.
XI. PLAN OF ACTION
Person/Unit responsible Activity Timeframe
Goldstone/HR head Re-draft a health package that 1-2 months
includes the recommended action
on benefit caps, where drafting
committee should have sufficient
representation of all stakeholders.
Committee As soon as the re-drafted health 1 month
package has undergone
exhaustive review and
subsequent approval of the
committee, this should be
cascaded to all employees.

Accounting department Plan short-term and long-term 1 month

financial sustainability, including
the costs related to this action.
XI. PLAN OF ACTION
Person/Unit responsible Activity Timeframe
Goldstone/HR head Align company policies with 1 month
national policies and related
international best practices.
Goldstone/HR head Provide educational 2 months
programs/training related to
Preventing HIV/AIDS.

Goldstone/HR head Annual medical exams for mine 1 month

workers to check on their health
conditions should be provided.
Thank you.