A Report on Social Strategic Management and Development: KCM

This report provides a detailed analysis of the social strategic management and development of Konkola Copper Mines (KCM) in Zambia. It begins with an introduction to mining in Zambia and the operations of KCM, a subsidiary of Vedanta Resources Limited. The report identifies key stakeholders, including business partners, communities, advocacy organizations, competitors, and the government. It examines environmental issues such as water and air pollution, land degradation, and deforestation. The study employs SWOT and PESTEL analyses to evaluate the challenges and opportunities faced by KCM, followed by a rationale framework to assess the effectiveness of the strategies used. The report concludes with recommendations for improving social performance and promoting sustainable development, offering insights into how KCM can navigate social and environmental challenges within the Zambian context.

RUNNING HEAD: Social Strategic Management and Development
konkola copper mining industry, zambia
Social strategic management and development

Social Strategic Management and Development
Contents
Introduction...........................................................................................................................................3
Mining in Zambia..................................................................................................................................4
Konkola Copper Mines..........................................................................................................................4
Scenario around the organisation...........................................................................................................4
Vedanta Resources Limited...............................................................................................................5
Social issues with KCM........................................................................................................................7
Business partners, contractors, suppliers and the employee...............................................................7
Directly affected communities...........................................................................................................8
Advocacy organisations.....................................................................................................................8
Competitors.......................................................................................................................................8
Government and policies...................................................................................................................8
Water pollution..................................................................................................................................9
Air pollution......................................................................................................................................9
Land degradation...............................................................................................................................9
Deforestation...................................................................................................................................10
Effects on the habitat.......................................................................................................................10
Questions needed to ask about the issues related to the issues faced by the KCM...............................10
Critical analysis...................................................................................................................................11
SWOT framework...........................................................................................................................11
Pestle analysis of KCM...................................................................................................................13
Rationale.............................................................................................................................................21
Conclusion...........................................................................................................................................24
Recommendations...........................................................................................................................24
References...........................................................................................................................................26
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Social Strategic Management and Development
Executive summary
This report is designed and prepared to identify the measurement of the social performance of
KCM hold by Vedanta in Zambia. The company is a mining industry that faces the
challenges in the external environment. To identify the challenges that are causing the social
issues to the industry this report will discuss the scenario of the organisation deeply and the
control of the industry in the Zambia on the copper mining industry. This report firstly
evaluates the present scenario and the happening of the industry in the internal as well as
external environment. After the evaluation this report will use the SWOT and PESTEL
analysis and the relation of both in order to identify the challenges of the society and the
other factors that are leading the challenges with the great efficiency. PESTLE analysis in
this report will critically analyse the real problems faced by the industries and various steps
followed by the KCM in order to attain the sustainable development of the society. Rationale
framework will evaluate the importance of the used framework that meet the satisfactory
evolution of the problem and evaluate the possible solution to that problem.
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Social Strategic Management and Development
Introduction
The process of using the high machinery equipment to extract the available natural resources
and material deep under the earth, on the surface of the earth, rivers and valleys and on the
peak points of the mountains. These natural minerals or resources are a natural gift the ease
the life of a human in order to meet the basic requirements of daily needs. Nature give the
profit to the human in many ways, industries busy in mining give employments to the local
living people and also facilitate the world with the adequate supply of the essential materials
(Bernard 2017).
Basically the extraction of resources give the raw material to the construction companies to
build and develop the societies and mining industries are very valuable to enhance the
economy of a country. Country having plenty of the natural resources enjoys the high level of
the local employment and also and increased gross domestic product rate per annum based on
the extraction of natural resource (CSR 2019).
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Social Strategic Management and Development
Source: - World Copper Production (Greenspac 2019)
Mining in Zambia
One among the 16 landlocked countries of South-Africa, Zambia is situated at south-central
in Africa. Zambia is enjoying an increased GDP at 4.6% in 2019 from the GDP 3.4 in 2018.
The main backbone of the economic stability on Zambia is the plenty of available natural
resources available to extraction by the mining industries. Copper, gold, emerald, coal, lead,
silver, uranium and cobalt are main natural occurring materials are available in Zambia. As
the leading supplier of cobalt and semi-precious gemstone it holds the total 6% of the world
copper reserve (Reuters 2019).
Copper is the main metal discovered by the American scout Frederick Russell Burnham,
extraction of the copper is one of the major employing resource of the Zambia. Mining
industries in Zambia support more than 40% of the country’s revenues (KCM 2019).
Konkola Copper Mines
Scenario around the organisation
Tag line: - “Jewellery, wiring, chemicals…… We touch at least one aspect of your life with
our products”
Zambia has variety of mining industries in government and private mining companies.
Largest government industry in copper mining is Mufulira mine. And private mining
company is Konkola copper Mines, largest cooper producing company. Standing on the
largest copper producing position in Zambia KCM operate its mining operations majorly in
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Social Strategic Management and Development
Chililabombwe, Chingola, Nampundwe and Kitwe, as a subsidiary of the famous Vedanta
resources limited (Cotribution 2019).
KCM assets: - (KCM 2019)
Vedanta Resources Limited
Interested in the extraction of zinc, copper, power, oil, iron ore, silver and lead Vedanta is a
global company diversified in natural resources extraction. The history behind the long
journey is very challenging as well as based on the sustainable development of the
community and society. Model of business operation followed by the Vedanta resources
limited are focused to growth and the creation of values to give the best to the internal and
external stakeholders with the community development (Abada 2019).
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1. In the year 2004 KSM was acquired by Vedanta only with 51% of the stake and the
condition of mining life span was not above the 6 years and to improve the economy
of the country this all was in need of huge investment.
2. Sector of the copper and other resources mining faced challenges with the difficult
phase and Vedanta with KCM settled its targets to constant on the commitment with
Zambia to make the community develop and economy stable.
3. Vedanta assured to invest the large amount of US $ 48.2 million, the main aim behind
the huge investment was to make the effective development of the mining industries
and open the new areas to build the capacity of the mining process.
4. To meet the community development standards of Zambia $ 1.7 billion was invested
by Vedanta holding the KCM with the US $ 900 million to develop the Konkola deep
mine, US $ 450 million in the new smelter finding the sulphur.
5. Vedanta made a huge investment around US $ 1.3 billion of it’s over all capital
expenditure with the aim to increase the life of the KCM copper mining industries.
Hence the major steps taken by the Vedanta is to the open Pit mine that is extended
from the 2007 to 2025 and had opened the underground mining for the extraction
from 2012 to 2030.
6. In 2008 the shareholding of Vedanta increased from 51% to 79.4% making the
investment to fulfil the commitment of the continuous development of Zambia.
7. KCM had returned the Vedanta with the dividend valuing the US $ 72 million from
2004; this return is approximately 1.4% far below the norms. KCM had paid from
2006 to Vedanta in form of taxes, CEC for the power purchasing costs and also in
form of wages (Bickenbach 2017).
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8. KCM from the initial stage is continuous to express its interest to support the local
business with the aim to support the local communities and the small scale producing
units.
9. With the establishment of KCM in 2004 the employment rate per year in the KCM is
average 13,000 employs per year and this employment result the growth and stability
in the economy of Zambia.
10. KCM with the great commitment towards the community and society development
and for the welfare of the people living around has introduced various community
programs as,
 Hospital facilities for the local people
 Satellite clinics for the local
 Funding the football clubs
 Deal to provide the drinking water facility for the local living people
by digging the solar powered boreholes.
KCM is dealing the operations in Zambia with the aim to develop the community standards
and stability (Tembo 2019).
Social issues with KCM
KCM dealing in the variety of the products, the fact is that an organisation operates its
functions in the society and with the proper maintenance of the internal and external
stakeholders affecting the operations of the industry (Greenspac 2019) (Bringezu &
Bleischwitz 2017). KCM have its internal and external stakeholders affecting the social
performance and issues as,
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Business partners, contractors, suppliers and the employee
KCM as making the profit and taking part in the economic activities hence it also faces the
issues with the primary stakeholders that directly took part in the overall operations of the
mining industry. Issues with the partners includes the negotiation or operation issues,
contractors give the problems in form of the bargaining powers and employees keep
challenging on basis of the health issues and to raise the salaries and benefits. CSR policies
clarify the commitment of the KCM with the people in Zambia but the real situation of these
stakeholders is different and they face the continuous challenges and these create the issues in
the society.
Directly affected communities
Communities and local people living around the mining industries are affected highly with
the operations of the extraction and developing the copper and other products. As the copper
particle polluted the air, pollute the water and the water collected at a place creates
possibilities of the malaria and other health issues (Boutilier 2017).
Advocacy organisations
These organisations in this include the environmental and the group’s active in the
community development, these create the awareness in the communities to make the resist of
the mining process to save the living and the environment and other factors. The role played
by these organisations led the strict issues related to social development of the community.
Competitors
Issues created by the competitors point not only exist in the same industries but other
industries like agriculture and food industries, these industries led the issues to access the
available natural resources. Land, water ad workers are the main factors create the
competition inside as well as outside of the industry challenges (Demuijnck 2016).
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Government and policies
Zambia government and the regulating bodies took part in the mining industries, Zambia has
the government mining industry and the private sector is ruled by the KCM. Hence KCM
deal with the rules and regulations set by the government to carry out the operations
sometimes the rules and regulations of make the industries in difficult situation, and
sometimes amendments on the rights of people or employees led the issues for the industry
and also it create the social issues (Gupta 2013).
Copper extraction and mining is the third world mining operation that create the hazards and
issues to the health of the workers working in the mining industries and also on the people
living around them in the locality. Major issues faced by the people living around the areas of
the extraction industries. Basically these are seen as the environment pollution and causing
health issues to the community (Greenspac 2019). Some environmental issues led by the
KCM are
Water pollution
As per the CSR policies and the commitment of the Vedanta and KCM, KCM has introduced
water borehole facilities for the local living communities to reduce the risk of the health of
the people. But in the real scenario of the people is different from their commitment because
the quality of the water found and supplied to the nearby living communities is polluted by
the copper and mining particles (Spitz 2019).
Air pollution
Mining extraction and processing result the leaving of the minor particles to get dissolved in
the air and the fuel used in the process create huge pollution to the air and this all led the
issues with the contemporary communities, government and the competitors to get the
solution of the pollution issues (Thembi Sylvia 2016).
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Land degradation
Mining done on the surface of the earth or underground the earth led the high effect on the
earth and create the negative impact in form to giving birth to the natural disasters like land
degradation, earthquake and land slopping sometimes. Process of over extraction give the
negative impact on the surrounding environment and also on the land in various forms (Wach
2016).
Deforestation
Mining is getting the affection from the world wide, as the Zambia surface have copper in
high quantity hence the industries focus to develop the mining industries as fast as they can to
meet the profit for this they led the deforestation easily. The deforestation in the country
affect the total environment of the society like it result the land slopping, land sliding, soil
erosion and sir pollution at major level (Greenspac 2019).
Effects on the habitat
Natural and manmade environment collectively create the habitat for the all living organisms
including human as well. But the negative impact of the mining industry is giving challenges
to these living organisms to survive in the highly polluted environment, and the interference
of the mining industries in the nature result the major social issues (Yakovleva 2017).
Questions needed to ask about the issues related to the issues faced by the KCM
KCM in the Factsheet presented by the Vedanta in 2019 sets the solution to many issues
hence there are many areas that remains challenging for the societies and communities
remain affected high with the mining process (Helmes & Nixon 2010).
1. What efforts do the KCM made to save the interest and development of the
communities living there with a large cultural diversity in the country?
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2. What are the future efforts planned, if KCM face the economical and physical
displacement, because it needs to make the effective plans to settle the resources and
communities accordingly with safety and security?
3. What policies are decided to meet the challenges from the stakeholders including the
government, corporate shareholder, communities and the employees?
4. What are the sustainable development goals followed by the KCM in order to achieve
the sustainable development goals?
Critical analysis
To analyse the performance of the industry there are many standards, frameworks, theories
and models. The most used tools to analyse the internal and external factors including the
complete information are SWOT and PESTLE analysis. These skills influence the each
relevant aspect or factor of the industry to measure the effects of their performance in the
social and economic ways (Helmes & Nixon 2010).
SWOT framework
supportive to the social
performance of mining
industries
Unsupportive to the social
performance of mining
industries
External Factors Strength Weakness
Internal Factors Opportunities Threats
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