Document Type Master's Dissertation Author Mwamba, Alain Donatien Tshiamala firstname.lastname@example.org URN etd-07282012-193818 Document Title Transaction costs in the mining sector in South Africa Degree MBA Department Gordon Institute of Business Science Supervisor
Advisor Name Title Mr M Holland Supervisor Keywords
- price discrimination and outsourcing
- vertical integration
- economics of organisation
- transaction costs
Date 2012-03-08 Availability unrestricted AbstractThe present research identified transaction costs in the mining sector in South Africa and provided means for mitigation. A review, discussion and evaluation of theories related to transaction costs such as vertical integration, outsourcing, price, long and short terms contracts was undertaken under literature review.
A qualitative study, with two research questions, on eight companies of which four precious metals and minerals, two metallic minerals and two non-metallic minerals, was performed and provided among other results:
• Cost of doing business in South Africa is high.
• Site specificity and physical-asset specificity are the most influential specialised investments in the mining sector.
• Long term contracts are the most appropriate to mitigate transaction costs.
• Costly bargaining is the most important implication for all specialised investments.
• Exchange rates, Mining Charter, BEE, legislation, taxes, royalties, fuel and electricity increases are cited as reasons for high transaction costs.
• The small sample is a big concern as it does not allow generalising the results to over all mining companies.
The South Africa’s government, as a regulator and a major stakeholder should revisit the mining charter and therefore the B-BBEE act as this clearly appeared to be a barrier to the development of mining companies.
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Please cite as follows:
Mwamba, ADT 2011, Transaction costs in the mining sector in South Africa, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-07282012-193818/ >
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