The Impact of HIV/AIDS on the South African Mining Industry

Transcription

1 The Impact of HIV/ on the South African Mining Industry CEO and Senior Consultant, The Health Monitor Company I will give you some insight into HIV/ as a disease and its pathogenesis; some figures on the South African epidemic and the general epidemic; a little bit about the actuarial model that was used to produce this; the actual results and predictions for about 80% of gold mining employees in South Africa and 90% of the platinum mining employees; and a few conclusions. The first point is the clinical picture. It takes a few weeks from the transmission of HIV/ before you develop antibodies and become HIV positive. There is then a period of five to seven years during which the person is relatively well before he starts getting sick, because the virus has over that time systematically destroyed his immune system. That gradually then progresses into serious opportunistic infections and cancers, which is popularly known as, and then the person has a very short life expectancy. going down. I do not have time to explain to you why epidemics are all S-shaped curves, but they are. Because of this long incubation period, the real impact in terms of disability and death follows a number of years after the peak of the HIV prevalence epidemic. HIV PREVALENCE RATES (ASSA 2002) 35.0% CLINICAL PICTURE AND PATHOGENESIS OF HIV/ 30.0% 25.0% 20.0% 15.0% PRIMARY PROCESS SECONDARY PROCESS Symptomatic 10.0% 5.0% 0.0% HIV transmission Antibodies develop Antinatal Adults Population Window period Incubation period Mild to moderate opportunistic infections Severe opportunistic infections & cancers 4 6 weeks 5 7 years 6 36 months months TIME (Average 6 12 years) This is the picture without access to antiretrovirals, but antiretrovirals makes this picture too complex. The essence of talking about the impact of HIV/ is such that you must think in terms of a life expectancy of six to 12 or 15 years. If we turn to the South African predicted estimates from the Actuarial Society of South Africa, we now estimate that somewhere between 20-25% of the adult population is HIV positive. The important point is that the national epidemic is probably at a plateau and will start Comparing the predicted normal deaths, or actuarial deaths, with the HIV/ associated deaths predicted over the future shows that for once the actuaries and the doctors more or less agree that either last year or this year we would see an equal number of -related deaths in South Africa to all other causes of death put together. This fact hides, of course, the age impact of this; thinking about the death of people in the productive ages of 25-45, people would have gotten infected eight or nine years earlier. Although the country seems to be past the worst part of the HIV epidemic, the impact in terms of death and disability is still to come. The LBMA Precious Metals Conference 2005, Johannesburg Page 39

2 1,400,000 1,200,000 1,000, , , , , YEAR 2002 DEATHS s Normal s What you then do, once you know the numbers in each transition, is to start looking at the conditions of employment and simply add that to these transitions; for example, retrenchment packages, death benefits and disability benefits. You also look at things like absenteeism, and reduced productivity. Over the last 15 years, we have built up the knowledge base of knowing that somebody in this stage on average would be absent from work five days more often than anybody who is not HIV positive at that point. HIV/ MONITOR III What I developed years ago when I was still at the Chamber and then later on with the actuaries was a multi-state model that combines the medical knowledge with that of the actuaries and predicts this in an employment environment. Employed HIV+ HIV/ MONITOR I Progression Infection Start Late Late Stop Stopped Volunteer Wellness Start Age retirement Not Employed Retired Retrenched Disabled Taking all the information that is available, the model predicts a workforce that is 70% HIV negative; some are asymptomatic, and so on. It also shows the transitions from age retirements, retrenchments, deaths, disability, and so on. When we do an actual mines prediction, it takes life of mine into consideration, as well. Employed HIV+ Progression Late Infection Start Late Stop Stopped Volunteer Wellness Start HIV/ MONITOR II Not Employed Retirement benefit Age retirement Retired package Retrenched benefit benefit Disabled Employed HIV+ Progression 25 days p.a. Start Late Late 11 days p.a. HIV- HIV- HIV- Infection 4 days p.a. Stop Stopped 25 days p.a. Volunteer Wellness 5 days p.a. Start 10 days p.a. Age retirement Not Employed Retired Retrenched Disabled By combining these two, you can then develop the impact on a specific company. As I have said, I have taken about 85% of the gold mining employees in South Africa and reduced this to a per 10,000 employee number. The popular one is always HIV/ prevalence rate, the best estimate of which is a rate of somewhere around 30%. Gold mining is almost certainly well past the top of the plateau and is predicted to decrease to about 17% in 15 years time. As we also said, the important part is not really HIV prevalence, but the resultant death and disability; that will lag a little bit; the new infection rate is declining. If we combine the money impacts with this, we consider hospital costs, paid sick leave, disability, productivity, and highly active antiretrovirals to develop the total cost, and that equates across the industry to roughly 7.5% of payroll as we stand today. That is predicted to increase to just under 8% in a few years time, after which it will also decline. To give you a feeling in dollars per ounce produced, depending on which mine and which mining company you are talking about, you are somewhere between $4-7 per ounce produced. The bulk of costs is lost productivity, and then, of course, medical costs. The model is very flexible, and I could have shown you cost benefit analyses on providing antiretrovirals, but seeing that everybody provides those it is water under the bridge at this stage. The LBMA Precious Metals Conference 2005, Johannesburg Page 40

3 The picture and the methodology are exactly the same in the platinum industry. The latest aggregated prevalence rate of the three major producers is somewhere between 16 and 19%. The decline in the prevalence rate will be a bit slower, and the number of sick and disability cases will increase for the next five to six years. If we then go to the costs for the platinum industry, the cost factors are different, but that is because the conditions of employment and labour agreements are different. However, the bottom line is that the total costs in platinum make up just under 3% of labour costs at this moment in time, which will increase to about 3.6% and then to gradually decline. As we carry on, the makeup of the costs are also slightly different. The mining industry has been aware of the epidemic and started preparing in the late 1980s. The impact is already significant, but it is not catastrophic. I think the most important aspect here, especially for the analysts and the other people, is that the productivity and medical costs I showed you for 2005 are already absorbed in the financials of the producers. All the major mining houses have very comprehensive programmes ranging from prevention right through to terminal care and some social investment, certainly treatment programmes. The future marginal increases from 2000 onwards would certainly be manageable with something of a few dollars per ounce produced in both the industries. Thank you very much. Results: Gold Mining (Epidemiology) Number of employees % of employees number of related number of related number of new HIV infections Year Per Number of employees to be HIV+ to be HIV+ deaths disabilities ,000 3,000 30% ,000 2,908 29% ,000 2,771 28% ,000 2,648 26% ,000 2,538 25% ,000 2,456 25% ,000 2,364 24% ,000 2,290 23% ,000 2,205 22% ,000 2,121 21% ,000 2,033 20% ,000 1,950 19% ,000 1,875 19% ,000 1,793 18% ,000 1,732 17% The LBMA Precious Metals Conference 2005, Johannesburg Page 41

4 Results: Gold Mining (Costs) cost Hospital Costs Terminal Care Clinic Costs Paid Sick Lost Productivity Funeral Training & replacement Medical incapacitations costs of HIV/ attributable to HIV/ as % of Payroll Year (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R000) % ,799 1, ,985 23, ,201 3,213 47, % ,254 1, ,683 25, ,117 5,482 50, % ,186 1, ,866 25, ,056 7,366 50, % ,498 1, ,277 25, ,871 50, % ,965 1, ,803 25, ,112 49, % ,607 1, ,581 25, ,005 50, % ,462 1, ,601 26, ,639 51, % ,406 1, ,617 26, ,049 52, % Tot: 45,178 10, , , ,688 7,466 69, ,482 - Results: Platinum Mining (Epidemiology) Year Per Number of employees Number of employees to be HIV+ % of employees to be HIV+ number of related deaths number of related disabilities ,000 1,570 16% ,000 1,529 15% ,000 1,457 15% ,000 1,370 14% ,000 1,270 13% ,000 1,172 12% ,000 1,075 11% , % , % , % , % , % , % , % , % number of new HIV infections The LBMA Precious Metals Conference 2005, Johannesburg Page 42

5 Paid Sick Lost Productivity Training & replacement Results: Platinum Mining (Costs) Medical incapacitations Group Life and Hospital Medicine Costs Costs Costs costs of HIV/ Year (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R000) % ,822 11,372 3,512 2,717 8,539 5,419 8,190 1,453 29, % ,210 12,827 4,182 3,218 9,428 6,275 8,566 2,325 32, % ,273 13,576 4,658 3,558 9,831 6,807 8,655 3,044 35, % ,099 13,709 5,058 3,884 9,983 7,061 8,544 3,510 35, % ,741 13,264 5,129 3,919 9,660 6,985 8,170 3,737 35, % ,289 12,500 5,158 3,933 9,222 6,720 7,693 3,773 33, % ,835 11,600 4,998 3,770 8,605 6,337 7,212 3,615 31, % ,418 10,667 4,775 3,606 8,024 5,921 6,749 3,350 29, % 44,687 99,515 37,470 28,605 73,292 51,525 63,779 24, ,208 - cost attributable to HIV/ as % of Payroll Results: Platinum Mining (Costs) Paid Sick Lost Training & Medical incapaci- Productivity replacement tations Group Life and Hospital Medicine Costs Costs Costs costs of HIV/ cost attributable to HIV/ as % of Payroll Year (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R'000) (R000) % ,075 9,827 4,526 3,390 7,464 5,496 6,305 3,058 27, % ,784 9,110 4,325 3,213 6,997 5,121 5,895 2,813 25, % ,565 8,561 4,145 3,068 6,633 4,845 5,629 2,604 24, % ,401 8,136 4,014 2,954 6,356 4,634 5,440 2,413 23, % ,261 7,761 3,857 2,829 6,090 4,445 5,267 2,245 22, % ,171 7,513 3,833 2,787 5,957 4,330 5,176 2,133 21, % ,112 7,344 3,696 2,708 5,820 4,274 5,135 2,078 21, % 69, ,769 65,866 49, ,611 84, ,626 42, ,924 - % 16.10% 36.78% 15.36% 11.55% 27.65% 19.74% 23.93% 9.83% - - The LBMA Precious Metals Conference 2005, Johannesburg Page 43

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