Determinants of viability in junior mining companies in the Witbank region of South Africa

Abstract

An exploratory survey was undertaken in order to explore the underlying causes of bankruptcy in junior mining companies operating in the Witbank region of Mpumalanga Province based on data gathered from 120 highly experienced employees of junior mining companies operating at Witbank. Perception on barriers to productivity in junior mines was measured based on a scale introduced by Henisz, Dorobantu and Nartey (2014). Data was gathered on 24 socioeconomic variables. Data was analysed by performing logit analysis. The key finding of study was that 74.17% of respondents believed that their mines were profitable and productive. Productivity of mines was found to be undermined high cost of transport [OR = 4.51; P = 0.003; 95% CI = (2.26, 7.58)], low demand for mine products [OR = 2.65; P = 0.009; 95% CI = (1.86, 6.14)] and inability to improve the public images of junior mining companies [OR = 2.53; P = 0.015; 95% CI = (1.80, 5.76)].

Keywords

• Junior mines
• Logit analysis
• Productivity
• Viability
• Witbank