Johannesburg - Speaking at the Gordon Institute of Business
Science (Gibs) today, Anglo American's departing CEO, Cynthia Carroll, spoke
passionately of her hopes and fears for South Africa as a mining economy.
And while it may not be a swansong - who knows how long it
will take to find a replacement for Carroll at Anglo? - her comments did have
something of the valedictory about them. First, though, the headline news.
The long-held view that former Amplats CEO, Ralph
Havenstein, ended his career at the company following a clash with Carroll over
safety was confirmed. In near narrative style, Carroll recounted an exchange
between the two prior to shutting the firm's Rustenburg mine for a week in
Hearing of another fatality, Carroll said she made an
instant decision to shut the mine. Havenstein, not named by Carroll, responded
that fatalities were a fact of mining in South Africa's platinum sector. It was
dangerous. More dangerous though (at least to Havenstein) was his flippancy.
"Not under my watch," Carroll shot back.
Havenstein resigned shortly thereafter. Interestingly, the
South African government vigorously and broadly adopted Carroll’s procedure of
shutting shafts when an accident had occurred. Until that point, it was
virtually unheard of; now, it's a law enthusiastically applied.
It's fitting that questions of mining safety should be a
highlight of Carroll’s presentation at Gibs. It will be the hallmark of her
tenure at Anglo. "Every single life lost killed me," she said. In
2007, Amplats reported 25 fatalities compared to 11 in its 2011 financial year.
Still, safety improvements don't seem to have been enough on
their own to keep Carroll at Anglo beyond the current five-year stint.
Shareholders, particularly international ones, don't align with the national
interest; not really.
So it's poignant Carroll should warn the listening audience
at Gibs, which included Nick Holland, CEO of Gold Fields, the view
international investors take of the risks posed by regulatory uncertainty, and
"We need more dialogue, we need to say what we're
really thinking. We need transparency," she said in reflection of the last
four months in South Africa which has seen fatal protest, job losses, and the
suspension of production at Amplats' mines at a cost of R3.4bn in revenue.
"South Africa will only succeed if it fosters an
environment that encourages business. International investors will not be
comforted ... they will make judgements on reality, on what they can see,"
The State Intervention in Mining (Sims) report contained
good and bad ideas of which a proposed resource rent tax qualified under the
latter category. It was a proposal that to Carroll seemed "unnecessary and
Also considered unwise was any plan to divide the company.
In the wake of Gold Fields' unbundling of its South African assets, it is now
deemed appropriate for virtually any mining company operating in the country,
and with international assets, to adopt a similar strategy.
"It's not on the agenda; we have a commitment to
investing here ... This is where the resources are," Carroll said, and
made reference to the $2.5 trillion estimate placed on South Africa's unmined
resources. The figure comes from a Citi report, if memory serves, and has been
criticised as a distortion because it ignores the fact that resources need to
Carroll should know. Referring to the business review of
Amplats' platinum mines, Carroll said some tough decisions would be made;
economic reality could not be defied: unfit businesses collapsed and died, she
"We will not shirk from telling the tough choices. For
the sake of all our stakeholders - we have to create a business that is
competitive for the future. A business with the right size and shape to compete
successfully in the global market," she said.
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