Identifying improvement areas within a South African gold mine using management accounting tools

Abstract

The study titled “Identifying improvement areas within a South African gold mine using management accounting tools” was motivated by the late Tom De Wet who said, “You only manage what you measure and you only measure what you value”. The South African gold mining sector, specifically pertaining to performance (gold output), has been on a downward trend pertaining to output for the past two decades. The continuous downward trend is rendering performance management increasingly important for operations to mine profitability. The study used a qualitative research methodology with a case study strategy. Harmony Gold Mine Ltd has been for this case study as it represents 63 present of all gold mines in South Africa. Two data collection processes have been exploited. The results from this study indicated internal benchmarking as a useful tool to compare and identify areas of improvement in the mine under investigation. The findings emphasise the role management accounting tools plays to improve companies’ competitive advantage by increasing efficiency and reducing cost. The study therefore recommended that South African gold mines uses internal benchmarking to compare multiple operations to improve profit margins. Internal benchmarking, as a management accounting tool, was found to be reliable when used for performance improvement identification. The results from the analysed data indicated detailed areas where improvement could be made in comparable operating units.