Lasting solution to feud over mine ownership lies in talks, not courts

Anglo pledges to work with new leadership to find answers, avert job losses and attract investment

I HOPE THAT IN THE NEXT THREE OR FOUR WEEKS THE … ENERGY OF THIS COUNTRY WILL GO INTO FIGHTING FOR A SOLUTION THAT WORKS FOR THE COUNTRY

When reflecting on Anglo American’s centenary, one of the key points of the last few decades has been the company’s role in supporting transformation in SA. Many may recall that in 1987 Anglo represented about 61% of the JSE. Today we represent about 6%. Some would say: “What a disaster, the company has shrunk by 90%.” I would say exactly the opposite.

Anglo American has been the most transforming company across all industries: Mondi, FNB, SAB were all part of the Anglo story in one form or another. As we restructured and floated those businesses, each did its own transformation deals, creating and sharing wealth.

When you look at mining, the transformation story is even stronger. Exxaro, JCI, African Rainbow Minerals, Royal Bafokeng Platinum, Shanduka, Harmony, AngloGold — many blackowned and managed — all came from Anglo.

So, when we talk transformation we should acknowledge the origin and contribution of these companies. But we must acknowledge that we still have a long way to go.

Sometimes we fixate on ownership and miss the other constituents of real transformation, such as procurement, change within management structures and a whole range of other elements that are ultimately far more important.

Before considering investment and the future of South African mining we must consider a few very positive elements. SA’s judiciary and press have passed many severe tests. Media, in particular, play a leadership role in the conversations that are a part of the South African culture. It is one of the things that keeps me optimistic about SA’s future.

In the 10 years I’ve lived or worked in SA I’ve observed in SA you fight, but you fight for a solution. You fight for a resolution. In 1994 you found the solution to one of the most intractable and difficult social issues across the face of the earth. You’ve been fighting ever since to deliver on that outcome.

I believe the current fight is not about the South African dream of a “rainbow nation”, because whoever I speak to still has that dream. They may have their own version of that dream, but the dream is still burning bright. The fight is about how to get there and how the fruits of that future should be and could be shared.

At Anglo we don’t play party politics. We will leave that to the politicians. In that same context, in all the jurisdictions in which we operate, and there’s more than 25, we have made a policy call that we don’t try to impose our will on the will of the people. The people will decide who the leaders of SA will be. We will work with the leaders the people of SA select.

However, we will not be silent. We will argue our position on policy with great passion. We will continue to be a catalyst for positive change in the country and we will protect our shareholders, our stakeholders and our partners with steel and determination.

At times, the things we’ll say publicly may not be comfortable and may not resonate with some. But they will be honest, they will be direct and they will be with the expectation of making sure we’re talking about a future that we believe is positive and consistent with the dream of the South African rainbow nation.

In this spirit, let me reflect on a conversation I had six years ago when I was asked by the government mining research group about the future of the industry. I said investment in the industry was key and that the policy framework to encourage investment in the mining industry had to be changed. I said ownership uncertainty must be removed to give people confidence to invest. I said that in the absence of change, the South African mining industry would lose at least 100,000 jobs over five to seven years. I said this publicly. In the past six years the sector has indeed lost or is immediately threatened with the loss of about 100,000 jobs. In SA 100,000 jobs is 1-million people affected.

Therefore I make the same comment today: ownership uncertainty must be removed to give people confidence to invest or the same will happen again.

And key to this investment is foreign direct investment. What many people don’t realise is that South African mining does not have the domestic cash or resources to build the mining industry from where we are today.

In terms of the cash and resources we do have, we choose to invest in medical benefits and other social programmes, which are absolutely the right things to invest in as a country. To grow our industry, to grow SA and create jobs, we need to encourage people from overseas to invest in the country.

For South African mining to not attract this foreign direct investment will be an absolute tragedy for all South Africans. Other countries have made the mistake of not developing their resource industry to its potential. Those countries are now starting to understand and realise how grave that error has been. They lost a generation. Let’s make sure SA doesn’t go down that same road. If we can’t put the 27% that we report as unemployed back to work or to work for the first time, particularly the youth, then the future does not bear thinking about.

I believe in people. I believe in treating people with dignity and respect and I believe no one has any right to claim they are better than anyone else. The one thing that brings us all together is our humanity, our desire to make things better for everyone’s future. The key question is: how do we make a better SA for all South Africans? If we as an industry can’t work out what that looks like, then we’ll have failed the test of leadership.

Let me repeat what I said six years ago: without change, the South African mining industry will lose another 100,000 jobs in the next five to seven years. We must reinvest and rebuild our industry. We must attract investment. And to do that we must put structures and policies in place that encourage people to invest. In parallel, we can set the parameters around social development and change to ensure there is an equitable outcome for all South Africans. We have to find what that solution will look like.

Today, the mining industry is fighting the battle in the courts. While I believe we have to protect our position, the ultimate answer will not come from the courts. All they will do is redefine the points that we disagree on so that we create a new set of arguments.

Now, maybe, we need to go through that process to find a new framework, but in the end the solution will be people sitting around the table, negotiating a new future. We have to find each other in these conversations. We won’t find each other in the courts.

I hope that in the next three or four weeks the fighting energy of this country will go into fighting for a solution that works for the country. It is not Anglo’s role to take a view on who should be part of the solution. As South Africans, that is your job.

Our commitment as Anglo American is that we will support the decision South Africans make. We will work with the new leadership in this country and with union leaders, nongovernmental organisations and faith-based leaders. In fact, we will work with anyone who can play a positive part in creating a new SA that works for all who live in it.