Only last week Isabel’s brother and family were held up at gunpoint by three men in their new home in one of Johannesburg’s luxurious neighbourhoods.
"Press a panic button and you’re all dead." The threat came as one of the armed men hit Isabel’s brother several times on the forehead and then kicked him in the back of the legs. His wife was locked up in the bedroom with one of the other thugs, their two children and the grandma in the kitchen with another.
Now if a director of a big investment bank had been held up and threatened in this manner in London, it would have made front page news. Not so here.
But this is Africa and according to Isabel’s father "Jo’burg is like Beirut at the moment". He was hijacked at gun point only a few months back!
Unbelievably most well off South Africans, about 80% statistics say, are now resigned to the fact that they will be attacked at least once. If you live and work in South Africa, it comes with the territory.
The mining industry here, as we keep telling you, is particularly challenging work. For one reason or another several of the country’s top execs have hung up their pick axes in the last year.
Here CEOs also have to think about transformation, education and HIV and all this is set against the backdrop of likely threats to their own security. Little wonder these guys have a shelf life of around seven years.
Shock resignation at AngloPlat highlights safety
Even so, when Ralph Havenstein, CEO of Anglo Platinum (AngloPlat), the world’s biggest platinum producer, said his time was up a few hours after announcing half-year results, the market was genuinely shocked. The self-confessed 4x4-driving, history-reading Havenstein is only 51 and he had been in the job just four years. If not shrouded in secrecy, the terms of his exit have been wrapped up in political niceties.
Frankly speaking though we think the reason for his speedy exit is Anglo American’s (Anglo) new CEO, Cynthia Carroll. Anglo owns 75% of AngloPlat. Not only has she decided that safety issues must be prioritised over increasing production, she is also playing a shrewd political game. In South Africa good relations with government are increasingly important and AngloPlat’s track record on this front hasn’t exactly measured up.
In January after Sonijca Buyelwa, minister of the department of mineral and energy accused AngloPlat of failing to address transformation, particularly black economic empowerment issues, Ms Carroll flew out to South Africa. She obviously thought Mr Havenstein, a white Afrikaans male, was not the right person to smooth things over. Reading between the lines then it is clear she has decided Mr Havenstein isn’t up to the job and in all likelihood, given the cultural change that is expected, he probably knows he isn’t.
Safety hits production... and it’s worse than expected
But back to safety and what this blonde bombshell wants to achieve — zero fatalities! This year AngloPlat has recorded a total of 18 fatalities of which 12 occurred at its Rustenburg mine. Compared against 19 fatalities for the whole of 2006 this was pretty appalling. Calling Anglo’s safety performance for the first half of the year "totally unacceptable", it is clear that Ms Carroll has a bee in her bonnet. That bee is not afraid to sting and nowhere has this been more evident than at AngloPlat.
For the first time in South Africa’s history, she took the decision to close mines, at Rustenburg, putting safety before production. At the time AngloPlat said that this would cause 2007 production to slide by some 10,000 and 15,000 oz. But the reality has been more like 38,000 oz as nervous mine supervisors require much more care to be taken underground. The safety mandate that Ms Carroll wants rolled out across the organisation is certainly going to hit production further. Mines will have to be closed while they are made safe, plenty of tricky conversations will need to take place between workers and management. Mr Havenstein predicted, in a recent interview, that this would result in the loss of a further 65,000 oz.
But the slump is only short-term...
The flip slide is that the slump in production is only for the short term and safety processes WILL be better. But whether accidents can be reduced to zero is debatable. In the corridors of South Africa’s mining houses there’s been an echo of chauvinistic muttering... what on earth does a blonde, American, woman know about mining in this neck of the woods? In fact nearly everybody we spoke to says that reducing mining fatalities to zero is a tall order.
But, if AngloPlat successfully eliminates fatal accidents, in fact even if it substantially reduces fatalities, other mining houses will have no choice but to follow suite.
That will be an expensive and time-consuming exercise. But it will be a plus for share ratings. International investors understand that sustainable development initiatives are essential these days in Africa. Ms Carroll is shrewd enough to know this. Anyway, she is riding on a high with investors at the moment, as can be seen from the share price performance. They have liked her tough approach.
Her challenge will be to find somebody with the balls to take on the job! If an outsider is recruited, and South Africa is still managing to attract the odd foreign exec, this will come at the cost of providing a golden parachute out.
Keep safe!
Erin and Isabel
P.S. If you enjoyed this article you can find out more about our free email, The Right Side by clicking here.
