Context:
An international mining company was evaluating the acquisition of an operational mid-tier mine in South Africa. While the financials and geological assessments were favourable, the company required a deep socio-economic and political risk analysis to inform its decision.
Challenge:
The mine was located in a region with a history of labour unrest, regulatory scrutiny, and high community dependency on mining jobs. Additionally, unresolved land claims and informal artisanal mining activities posed potential risks.
Solution Provided:
Applying Emerging Dynamics, we conducted:
- Cultural & Political Risk Assessment: Analysing local governance, labour union influence, and historical tensions in the area.
- Stakeholder & Policy Mapping: Identifying key stakeholders, including municipal authorities, traditional leaders, and regulatory bodies, to understand risks related to policy shifts and compliance.
- Community Sentiment Analysis: Assessing local expectations, past grievances, and potential areas of conflict that could arise post-acquisition.
- Social & Labour Planning Assessment: Evaluating workforce dynamics, retrenchment risks, and skill levels for workforce optimisation.
Outcome & Impact:
The due diligence report identified hidden risks, including pending regulatory disputes and potential labour disruptions. The acquiring company renegotiated certain acquisition terms, allocated resources for proactive stakeholder engagement, and adjusted its social investment strategy. This de-risked the acquisition, ensuring a smoother transition with minimised operational disruptions.