A critical examination of risks disclosed by South African mining companies' pre and posts Marikana event

This paper sets to critically assess the risks disclosed by South African listed mining companies in pre and post the Marikana incident. Using the content analysis to code the categories of risks disclosed by mining companies in the annual reports, it was noted that the main issue that has been prevalent in the public discourse which is the labor relations (poor employee relations)/wage negotiations was not that high on the risk agenda of mining companies. Given prominence of industrial action (sometimes coupled with violence), it was expected that this risk will feature high on the list of risks that were reported by mining companies. The implication of this is that this risk may not necessarily be receiving attention. The main downside of this risk not being in the strategic agenda is that companies may not have conducted scenario analysis including the business impact assessments that could be useful in modifying the impact of this risk. The paper argues that the non-disclosure of this risk in integrated reports by most of the listed mining companies is possibly distorting the risk profile of organizations concerned. Even though investors are supposed to be aware of the market information, those who rely on the integrated reports of companies to make informed decisions about the sustainability as well as the riskiness of certain companies could end up with the distorted risk profile. Investors with no appetite for this type of risk could end up investing with a view that the company does not have this type of risk or that this risk is very low.