Reference no: EM132357308

A mining company is planning to mine diamonds on land not far from a small village in KwaZulu Natal in South Africa. The company plans to produce 1,000 tons of diamond daily and employ 200 people from the village. South Africa is a net exporter of Diamonds. The company also dumps wastes into the water system. The water system supplies the residents of the village drinking water. This waste can contaminate the water system that can affect the health of the residents. Cleaning the water for drinking purposes can cost the village $300,000 every year.

Meanwhile, the village depends on the river for livelihoods. About 80% of the residents are fishers and it is expected that the contamination will cause the fish stock in the river to decrease by 80%. This can in tend decrease fish harvest and incomes, causing lower standard of living.

To address this challenge, the government is requiring the mining company to develop and use technologies that will reduce the contamination. The available technology will develop a tailing pond which can trap the waste. This technology can cost $300,000 with annual maintenance cost of $20,000. However, environmentalists have argued that the contamination can leak into the water system within five years of implementation. The government is also planning to provide support to fishers whose livelihoods will be affected with monthly payments of $2,000 per fisher.

Questions:

1) Discuss the potential cost? Be comprehensive

2) Are there any external impacts? Explain

3) Identify the stakeholders and describe who are the winners and losers?