Sibanye’s thin ex­ec­u­tive line un­der scru­tiny af­ter deaths

Leaner man­age­ment struc­ture may have com­pro­mised safety

Sunday Times - - Business | Mining Safety - By LUTHO MTON­GANA mton­[email protected]­day­

On the sur­face, with a lead­er­ship team of only 55 peo­ple over­see­ing more than six op­er­a­tions in South Africa, Sibanye-Still­wa­ter’s man­age­ment seems stretched to an alarm­ing de­gree.

That could be one of the fac­tors con­tribut­ing to its steep rise in fa­tal­i­ties this year. Of the 45 minework­ers who have died in South Africa this year ,20 worked at Sib any eS till wa­ter op­er­a­tions. Since the com­pany was founded six years ago, it has had 73 fa­tal­i­ties.

This week, Sibanye ap­pointed a new safety man­ager to deal with the prob­lem, which has fed into a weak­en­ing share price, down 39% this year.

The rise in fa­tal­i­ties comes as the miner is in a bat­tle to rein in debt of R23-bil­lion — more than its mar­ket cap­i­tal­i­sa­tion — caused by rapid ex­pan­sion over its short his­tory.

In that time, Sibanye has bought the labour-in­ten­sive op­er­a­tion of Gold Fields, the Kloof-Drie­fontein Com­plex, as well as Beatrix, a cou­ple of An­glo Amer­i­can Plat-

It takes its toll on every­one James Well­sted

Sibanye spokesman

inum mines and a US miner, Still­wa­ter.

Sibanye’s in­dus­try peer, An­gl­o­Gold Ashanti, has 400 em­ploy­ees at its Jo­han­nes­burg head­quar­ters, in­clud­ing skilled tech­ni­cal staff, over­see­ing 14 op­er­a­tions in Africa and glob­ally.

An­glo Amer­i­can, the most di­ver­si­fied of the coun­try’s min­ing houses, has a cor­po­rate global head­count of 1 000 work­ers. It has 36 as­sets in South Africa and in­ter­na­tion­ally.

Sibanye CEO Neal Frone­man has fo­cused much of his at­ten­tion on re­mov­ing hi­er­ar­chies and mak­ing man­age­ment more cen­tralised, leav­ing the gen­eral man­agers and vice-pres­i­dents of the com­pany’s in­di­vid­ual mines to fo­cus on op­er­a­tions.

If one adds mid­dle man­age­ment based at its min­ing op­er­a­tions, the miner has a South African lead­er­ship team of about 137 peo­ple.

Asked whether man­age­ment was stretched, Sibanye spokesman James Well­sted said: “No, ab­so­lutely not.

“We took over in 2013 and re­moved hi­er­ar­chies. We took the re­spon­si­bil­ity of unions and DMR [Depart­ment of Mineral Re­sources] and may­ors away from them and they only fo­cus on op­er­a­tions, and head of­fice deals with those,” he said.

Some an­a­lysts have ar­gued that the need to re­duce debt came with a lot of cost-cut­ting, which prob­a­bly meant that staff in its head­quar­ters and its op­er­a­tions were hard­pressed to meet pro­duc­tion targets and man­age­ment was stretched too thin.

Safety stan­dards may have been com­pro­mised by man­age­ment, say an­a­lysts. The fact that there is no new strat­egy on how fa­tal­i­ties can be avoided in fu­ture does not bode well for the miner as the mar­ket has more questions than an­swers.

Leon Ester­huizen, an an­a­lyst at Ned­bank, said there were just too many questions about how Sibanye ap­proached safety. “But these questions al­ways point back to man­age­ment. There is al­ways some­thing be­hind some­thing, and that’s re­ally the prob­lem here. Un­for­tu­nately, there is go­ing to be a mas­sive fo­cus on Sibanye and its man­age­ment,” Ester­huizen said.

On its wor­ry­ing fa­tal­ity numbers, Well­sted said the com­pany had to wait for the in­ves­ti­ga­tion to know what to do dif­fer­ently.

“We rolled out a fully re­vised strat­egy in 2017, which was suc­cess­ful.

“To say what we are go­ing to do dif­fer­ently now, we don’t know. Our sys­tems work quite well; where they don’t work we need to un­der­stand why.”

An­a­lysts said that when assess­ing fa­tal­i­ties, one had to look at each case on its mer­its — such as the area where the min­ers were dur­ing the seis­mic event, and if it was in the mine’s “white ar­eas”. White ar­eas are parts of the mine that have not been mined out, where there is left­over gold.

Makwe Masilela, chief in­vest­ment of­fi­cer at Makwe Fund Man­agers, said the ques­tion was whether Sibanye had enough safety per­son­nel.

“If you had four peo­ple in charge of safety be­fore you went too deep, and now be­cause you are much deeper, should you not maybe con­sider hav­ing 50% more safety peo­ple or dou­bling it up?” Masilela said.

The pre­vi­ous owner of Sibanye’s gold mines, Gold Fields, had ex­pe­ri­enced 176 deaths be­tween 2006 and 2012 in the KDC mines, in­clud­ing South Deep.

Shut down

This poses a ques­tion about the risk of the op­er­a­tions. They have been his­tor­i­cally prob­lem­atic to mine be­cause of their depths, reach­ing some 4km, and their labour-in­ten­sive na­ture.

Masilela said he was wait­ing for the day when a South African min­ing com­pany would shut down for safety rea­sons in­stead of hav­ing the gov­ern­ment do it.

“If they [min­ing com­pa­nies] would say some­thing like, ‘We know that there is ore there and we can make money, but our worry is safety, so we need to stop min­ing’, that would be a good change of men­tal­ity to­wards safety,” Masilela said.

Well­sted said Frone­man and the rest of man­age­ment were tak­ing the rise in fa­tal­i­ties hard. “It takes its toll on every­one.”

By the end of the year, Sibanye is ex­pected to ac­quire trou­bled platinum miner Lon­min, which will add a fur­ther 20 000 em­ploy­ees at Marikana to its ros­ter, bring­ing the to­tal num­ber of its work­ers to 85 000.

Pic­ture: Sandile Ndlovu

Sibanye-Still­wa­ter ap­pointed a new safety man­ager this week.

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