Op­er­at­ing on solid ground at last

An im­me­di­ate chal­lenge was deal­ing with the aftermath of Marikana. The re­struc­tur­ing and turn­around to prof­itabil­ity makes for great mem­o­ries

Financial Mail - - CROSSWORD CRYPTIC 8 -

Ap­pointed as Lon­min CEO in July 2013, a month be­fore the oneyear an­niver­sary of the Marikana tragedy, Ben Ma­gara plunged him­self into build­ing re­la­tion­ships with more than 38,000 staff and, crit­i­cally, his man­age­ment team.

He tells a story of be­ing called out as a “liar” by a griz­zled old rock drill op­er­a­tor dur­ing his first day on the job when he vis­ited one of the com­pany’s mines and told the as­sem­bled min­ers he knew un­der­ground work­ing con­di­tions and could op­er­ate a jack ham­mer.

Prov­ing the point and win­ning the hearts and minds of that team un­der­ground, wield­ing the heavy drill for hole af­ter hole, is the mark of the hu­man touch that Ma­gara brought to Lon­min, far re­moved from the pre­vi­ous CEOS who were of­fice-bound in either Lon­don or Jo­han­nes­burg.

Sit­ting in the cramped, steam­ing hot con­di­tions un­der­ground, he would en­gage crews on the eco­nom­ics of min­ing, a les­son he took to the sur­face when en­gag­ing with the newly dom­i­nant As­so­ci­a­tion of Minework­ers and Con­struc­tion Union (Amcu).

“My im­me­di­ate chal­lenge was deal­ing with the aftermath of the Marikana tragedy. It was to build bridges,” he says.

“It wasn’t that the as­sets were at fault, or that there were tech­ni­cal is­sues, it was the softer is­sue of re­la­tion­ships and I was con­fi­dent they could be re­paired.”

Ma­gara went on a whirl­wind tour of ev­ery shaft, meet­ing and greet­ing em­ploy­ees and show­ing peo­ple there was a new, hands-on CEO in charge.

His tour in­cluded all the pro­cess­ing plants, and, crit­i­cally, the wi­d­ows and fam­i­lies of those killed at Marikana in Au­gust 2012 and in the run-up to that day.

“My pri­or­ity was re­la­tion­ships and to show that we are all just hu­man be­ings.

“We can’t be killing each other. Re­la­tion­ships are noth­ing with­out re­sults, that if there’s no out­put and no cash, then you haven’t achieved any­thing. Mak­ing those re­la­tion­ships pro­duc­tive was the real success for me.”

Win­ning over the em­ploy­ees was one thing, but there would be a far greater chal­lenge for Ma­gara as he in­her­ited an ex­ec­u­tive com­mit­tee trau­ma­tised by the events around Marikana that didn’t fully back him, with busi­ness unit heads see­ing them­selves as in si­los and in com­pe­ti­tion.

He says he had a close re­la­tion­ship with then chair­man Roger Phillimore and Brian Beamish, but in the daily op­er­a­tions things were far more com­plex.

Turn­ing around the ex­ec­u­tive com­mit­tee took longer and was far more dif­fi­cult, but he was at last able to bring to bear his ex­ten­sive min­ing ex­pe­ri­ence.

He has re­placed some mem­bers as they left with younger, fresher, tal­ented peo­ple and the feel­ing is that the com­pany is hum­ming along at an op­er­a­tional level.

Putting the busi­ness into a po­si­tion where it hasn’t lost money for more than a year, Ma­gara is prag­matic about the en­vis­aged takeover by Sibanye-still­wa­ter.

“Con­sol­i­da­tion is right for Lon­min. We were either mak­ing mil­lions or we were beg­ging for money. We are a sin­gle-com­mod­ity pro­ducer in a sin­gle lo­ca­tion, with volatile labour and com­mu­ni­ties. The risks are high and we’ve seen the con­se­quences of that,” he says.

The big­gest win for Sibanyestill­wa­ter, if the trans­ac­tion com­pletes as ex­pected, is not only the shal­low­est mines in the Rustenburg area and ex­cel­lent smelt­ing and re­fin­ing plants, but the team that drove Lon­min to more than 15 months with­out a fa­tal ac­ci­dent.

“Sibanye-still­wa­ter can take the best man­agers from Lon­min and make them part of their safety so­lu­tion. We have moved on from the old way of com­mand and con­trol and iit’s pay­ing off,” Ma­gara says.

“Lon­min has re­turned to prof­itabil­ity, we de­liv­ered more than we promised in most ar­eas of busi­ness since the 2015 Rights Is­sue and this year we made an op­er­at­ing profit of $101m — I am par­tic­u­larly proud of the first pay­ment of our Em­ployee Profit Share Scheme.

“We have in­deed turned the corner but it is in­suf­fi­cient to save jobs as we don’t have suf­fi­cient capex to in­vest in fu­ture mines.”

What it means: The com­pany has re­turned to prof­itabil­ity and has built a team that will en­hance the new merger part­ner’s op­er­a­tions

Ben Ma­gara: Bui­ild­ing healthy re­la­tion­ships paid off

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