Mining is taken seriously -- at last
It bodes well for mineral resources when the minister puts an ear underground, says Harmony veteran
THE new minister of mineral resources, Mosebenzi Zwane, is a vast improvement on his predecessors, says Graham Briggs, the outgoing CEO of Harmony Gold and deputy president of the Chamber of Mines.
Susan Shabangu and Ngoako Ramatlhodi did not set the bar very high, but, Briggs says, Zwane’s accessibility since he replaced Ramatlhodi in September bodes well for an industry that has been treated with barely concealed contempt by the government for 20 years.
Briggs has had several “key” meetings with Zwane, “which is quite remarkable because he’s only been in office for a short while”.
Zwane seems to have a greater appreciation of mining’s importance to the economy than his predecessors and he has shown a genuine desire to understand its problems, says Briggs.
“He’s wanting to engage with the industry, he’s wanting to improve the investment climate by allowing people to engage with him and his department and solve problems.”
Briggs says Zwane has been depicted as a controversial figure in the press, “but my experience with him is different”. He believes Zwane has the interests of the industry at heart.
“It’s fantastic and the mining industry needs to take advantage of that and assist him in solving some of the issues that we have, and make it better.”
One of the biggest issues is the accusation that mining has not delivered on its transformation commitments. Almost before the ink had dried on his appointment, the previous minister, Ramatlhodi, attacked the industry for not achieving black empowerment targets, and threatened it with dire consequences that sent potential investors running for the exit.
Briggs, 63, a geology graduate from the University of KwaZuluNatal who entered the industry in the early ’80s, concedes that mining has a lot to answer for, but says the demonisation it has been subjected to has been “unfair” and extremely damaging to the country. “The mining industry has been key to the development of South Africa and therefore on the front foot when it comes to the politics of South Africa. It was a great supporter of apartheid. Going forward to the mining charter, I think it has done very well and been very supportive of government programmes.”
He feels the “relationship breakdown” between the industry, the government and unions, which has had a devastating impact on mining’s ability to contribute to the economy, is a consequence of a programme of politicising workers to see the mining companies as their enemy rather than their best chance of survival.
“But I sense that there has been a change. There is a recognition now that the mines are very important — maybe a realisation that mines do still drive a lot of this economy, that if you don’t have the mines, then a lot of subsidiary industries just don’t survive.”
This is a very recent development which he thinks may have something to do with the more amenable approach shown by Zwane.
Within Harmony Gold, a lot of the old negative attitude to mining companies has changed, says Briggs. “There’s an appreciation for the situation of mines and the situation of Harmony.”
He picked this up from an allday visit Zwane made to Harmony’s loss-making Doornkop mine outside Johannesburg, where, three months ago, the group signed an agreement with unions to scale back planned job cuts from 3 000 to 526. Zwane spent some time underground, and judging from the questions the minister put to the miners, Briggs says, he wanted to understand the issues.
The gold-mining companies signed a three-year wage agreement with unions last month after five months of negotiations, which Briggs feels signalled an important tilt in the balance of power between the unions and the workers they claim to represent.
The unions began the talks by flatly rejecting the companies’ 13% wage offer and threatening to strike. Briggs says the companies knew that the workers didn’t want a strike. Their attitudes to the mining companies have changed, he says. “They see us in a different light.”
And yet the outrageous pay demands keep coming?
“That’s the rhetoric, the negotiators rattling their sabres,” says Briggs. “On the ground not one labour-related issue on wages did we have during the whole five months. There is a new tension between miners and union spokesmen because the last thing miners want to do is go on a five-month strike — or any strike, for that matter — particularly right now when they’ve all got back pay on their wages and an increase in wages which amounts to double-digit figures.”
This also applies to the Association of Mineworkers and Construction Union, which represents 31% of gold miners and which has yet to sign the agreement. “When they say they will look at the proposals and may go on strike in the new year, what they’re saying is: ‘Our guys don’t actually want to go on strike although we want to push them in that direction in the future.’ ”
The negotiations were protracted because competition for membership between Amcu and the National Union of Mineworkers swept reality and logic off the table. Amcu has yet to sign anything more than a recognition agreement with Harmony. It didn’t sign the wage agreements two years ago either.
“They throw rhetoric at us and take us back to 1948 or whatever it is, and talk about that,” says Briggs. But life has moved on. “There’s an appreciation from the NUM on the things that have changed in the miners’ lives. It’s dramatically different underground to what it was 10 years ago. Women in mining are now quite a feature. If you go into hostels, there are individual rooms now, you don’t have dormitories like you had.”
This new realism is reflected in the fact that the NUM worked with management in the extensive restructuring at Harmony’s mines, which has led to 5 000 job cuts in three years.
“It was a case of either we shut this thing down and put it on care and maintenance, or we come up with a plan.”
Briggs says a decisive change has been the campaign by management to win back the right to communicate directly with workers. Abdicating this right was “a huge mistake” by the mining companies, he says.
An added challenge for union leaders is that the new generation of miners is better educated, more sophisticated and less pliable than those they are replacing.
“It’s not only a case of being a union leader now, it’s a case of being a leader leading a more modern, more technologysavvy workforce.”
Miners will be thinking very carefully about who they support and whether they want to be unionised at all, says Briggs.
“There are new dynamics that union leaders are going to have to look at very closely. It will be interesting in six months’ time to see what has happened to union membership at Harmony, for instance.”
He predicts a “non-union membership gain”.
Briggs says he is retiring in terms of an agreement that he would stay until the age of 63, which is three years beyond retirement age.
But he won’t be “a pensioner”, he insists.
“My plan would be to look at something smaller, cuter, less onerous from a corporate governance point of view.
“There are many tiresome issues around being a listed company. They can get a bit overwhelming.”
He’d like something “potentially still listed but nimble where decision-making is quicker.” Probably gold. Maybe South Africa, maybe not.
“There are lots of opportunities elsewhere,” he says.
One such might be in Papua New Guinea, where, over the past six years, Harmony has pumped R3-billion into gold and copper assets.
In a couple of years, they will be self-financing and could be split off into a separate company free from the uncertainties of South Africa’s politically charged environment.
And needing an experienced CEO. Would Briggs be interested? He laughs.
There has been a change. There is a recognition now that the mines are very important There is a new tension between miners and union spokesmen