No sleepless nights for Amplats’ Chris Griffith as wage talks loom
But no sleepless nights for Amplats CEO as wage talks approach
● Chris Griffith, CEO of the world’s largest platinum producer, Anglo American Platinum (Amplats), says he’s not losing any sleep about coming wage talks.
The platinum belt, which North-West University politics professor André Duvenhage recently described as “probably the most volatile environment in the country”, is bracing itself for tough negotiations around a three-year wage deal.
Memories of the prolonged and violent strike that accompanied wage talks in 2014, two years after Griffith took over and cost the industry more than R24bn, are still painfully fresh.
Speaking from London while attending the annual Platinum Week gathering of industry players and investors, Griffith said he didn’t share concerns around the looming wage negotiations.
“I’m not losing sleep about those. Every two or three years they come around and we’ve got to go through that process. We’re doing preparations about what we can afford.”
Earnings have been boosted by a weak rand and a rally in palladium and rhodium prices.
“The platinum mining industry is in better shape than it has been for the last couple of years and I’ve got no doubt that will translate into higher expectations.”
But they will not be a soft touch, he says. “We’d be very cautious not to push ourselves back over the edge where we’ve got to start laying off employees again.” They’ve shed more than 60,000 jobs in 10 years.
Amplats has been engaging with unions between negotiations and they have a “good” relationship, he says.
“We spend a lot of time explaining what’s going on in the industry and the company, and there’s a better understanding of where the industry is.
“It’s in a better space than before but it’s not all sunshine and roses. We’ve got to look after it carefully if we want to continue to grow it.”
Observers doubt whether Amcu (the Association of Mineworkers and Construction Union), the largest and most militant union in the sector, will be in the mood for compromise.
With moves to deregister it under way, it is fighting for its life and may go for broke. If its recent war of attrition with Sibanye is anything to go by, this could mean massive intimidation, violence and instability ahead.
Griffith says he’s not losing sleep about this either.
“I personally have a good relationship, as does my team, with the senior leadership of Amcu, which is the dominant union in our company.”
In spite of power cuts, which in the first quarter of 2019 cost it R1.59bn in lost production, crippling electricity tariffs, Eskom’s worsening existential crisis and escalating carbon taxes from June, Griffith says platinum mining is in the best space it’s been in since former Anglo American boss Cynthia Carroll appointed him in 2012.
“Over the last year or so mining has become more certain. Certainly for PGM [platinum group metals] miners, the environment has got a lot better with the clarification of long-outstanding issues like the Mineral and Petroleum Resources Development Act and the Mining Charter.”
Proposed amendments to the act, which, among other things, would have given the minister control over what minerals companies could export, were withdrawn by minister Gwede Mantashe last year.
The latest version of the Mining Charter is “a major step forward from what we had before” but there are still serious disagreements with the government about the continued consequences of past empowerment deals and the need for a fresh round of BEE every time a mining right has to be renewed.
All this, however, is overshadowed by Eskom.
Griffith says the mining industry is working “very closely” with Eskom to try to avoid further electricity disruptions.
“We’re not just sitting on our hands.”
He believes the government and industry are on the same page about what needs to be done.
“They understand what needs to be done and they understand how important this is not only for mining but society in general.”
The fact that the government has “allowed us and encouraged us to provide technical expertise” is an important signal of intent, he says. “All of us need to get behind this wagon and push like hell.”
But the government still needs to get out of the way of industries, like mining, which want to develop alternative energy sources.
Amplats has a 75MW-100MW solar plant in development but has been blocked by government policy, which forces dependence on Eskom.
“We can only develop a maximum of 10MW. As the law stands, you can’t just develop your own power plant or renewables plant.”
He says the imposition of a carbon tax that would add between R200m and R300m a year to Amplats’s costs and “push the mining industry over the edge” makes no sense if the government continues to block the development of renewables.
“If this really is a drive by the country to drive down carbon and change behaviour then there’s got to be corresponding legislation to enable us to move to renewable energy,” he says.
“We need legislation to give us more energy security and allow us to participate in a lower carbon economy.”
Griffith says that under President Cyril Ramaphosa the mining industry’s relationship with the government has improved materially.
“We have fairly robust conversations at times and we do differ at times, but he’s active with the industry, he sees the growth potential of the industry.
“We’ve seen them embracing the potential of the industry, not just trying to beat the industry up and push it down as before.”
What Griffith has been hearing in London is that, notwithstanding huge concerns about the Eskom factor, there’s a collective belief that SA is more investable.
Now that Ramaphosa has what is seen as a mandate for reform, there is an expectation that cleaning up corruption will accelerate.
“The work that has been started on this really does need to be fast-tracked, action taken against those that are corrupt, and let’s get on with growing the country.”
Investors are looking at the mining industry to see if it can generate sufficient returns.
“They won’t invest if they don’t see this,” says Griffith.
“We’ve got to demonstrate that we don’t have policies and systems that are undermining that.”
The platinum mining industry is in better shape than it has been for a couple of years and … that will translate into higher expectations