Piet Croucamp, Jannie Rossouw
Abstract
This paper shows that South Africa faces structural challenges in its quest to improve economic growth on a sustained basis, aimed at eradicating the problem of persistent unemployment. As neither the political environment, nor the economic environment, are conducive to an acceleration in economic growth, an alternative strategy to enhance growth is required. As a major producer of minerals, the preferred alternative for accelerated growth is an increased focus on local beneficiation of mining production, rather than ore exports. Such a strategy has multiple implications, but it is shown in this paper that guaranteed uninterrupted supply of electricity is a precondition for success. The primary research methodology is to operationalise the political risks which precedes the policy endeavour of economic beneficiation in South Africa’s chrome industry.
The results of the research show that the responsiveness of management to a particular policy regime is a function of the estimated or envisaged risks. Such a response occurs depending on the extent to which risk can be mitigated and the likeliness of policy formulators being pragmatic about the conditionalities embedded in the policy regime. This research will assist managers to understand the political risks of economic or industrial activity and inform not only about the key policy risks but also the infrastructural impediments impacting on the endeavour to mitigate risks.