A model to boost mine industry spirits
THE level of labour unrest in the mining industry is almost at crisis point, but there are suggestions of a new approach emerging. One of these signs was the new labour agreement reached between Gold Fields and the National Union of Mineworkers on the South Deep mine. Could this turn out to be a model for the industry?
Perhaps. South Deep is one of SA’s newest and most mechanised mines, and consequently could be considered a good indicator of the way the wind is blowing. As labour unrest intensified, the first battle is typically won by workers. But often the second battle is won by management as it resorts to mechanisation to resurrect margins.
The South Deep deal is groundbreaking in some ways. The working day becomes longer, but the time off gets longer too.
In total, Gold Fields says South Deep will have 25% more working hours a day and seven more production days a year. Employees will on average work 50 days less a year. The system will allow 400 more posts to open up at the mine.
The bad news for shareholders is that the whole scheme is going to cost R170m more a year. In addition, this model is not actually “exportable” to other mines. South Deep was specifically designed as a highly mechanised operation. What it does demonstrate is that in the right circumstances labour and management can cut complicated deals that enhance productivity.
That at the very least should provide some encouragement to SA’s beleaguered mining industry. convincing to do to bring lucrative corporate clients on board.
The company has been approaching businesses such as hotels to sign up for its services, but has discovered that bodies corporate in some residential complexes are locked into the exclusive deals with the incumbent MultiChoice. TopTV acting CEO Eddie Mbalo says this practice goes against the spirit of freedom of choice for consumers and TopTV will engage the relevant authorities, including the bodies corporate in question, to resolve the problem.
So far TopTV has sold more than 450,000 decoders, but only 160,000 to 200,000 are active. The company has been subsidising its decoders, but almost 65% of subscribers using prepaid vouchers have remained dormant. While stiff competition is clearly making things tough for the company, strategy also seems to be playing a key role.
The way things are going TopTV is destined to remain a niche player. But it needs at least 400,000 active, paying customers to break even. A rethink of its business model may be in order, but even this will not change the fact that MultiChoice already has the choicest bits of the market sewn up.
Dave Marrs edits Company Comment (marrsd@bdfm.co.za)