Disruption

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Created: Friday, 12 February 2021 09:54

Written by V.G. Duke

‘An interruption in the usual way that a system, process, or event works’ (the Cambridge Business English Dictionary
(© Cambridge University Press)

Covid-19 has done exactly this. We all had to innovate, creatively adapt, and behave differently as the pandemic disrupted our lives and our livelihoods. Our usual routines and mindsets changed as we witnessed the various ups and downs of 2020 unfolding.

• It was good that families were able to spend more time at home with one another. However, it is unfortunate that at the same time, South Africans witnessed an increase in domestic abuse and violence.
• A clampdown on the sale of alcohol saw a dramatic drop in trauma-related hospital admissions, and this freed up beds for Covid-19 patients. There
  were sadly many consequent job losses, which highlighted how urgently our social services need to be improved. To compound matters SAB Miller recently announced that the company was withdrawing an investment of some R2.5 billion into the sector.
• Restricted travel has meant less congestion on roads and pollution levels around the globe have reduced. There have been many reports of increased sightings of animals in areas previously void of wildlife.
• Social isolation has, unfortunately been emotionally unhealthy for many, especially for older folk confined to retirement homes. We have also seen increased levels of depression in younger people living on their own, and among our youth, who should be spending more time socializing with peers.

Our businesses were all affected in some form or another by the pandemic. Employers generally responded quickly at the onset of the lockdown by changing their processes to allow people to work from home. Many have actually benefitted from this disruption and it is now unlikely that they will return to their pre-pandemic ways of operating.
These extraordinary times required careful thought on changing strategies and methods. Our mindsets and paradigms will probably never be the same again, but this has enabled us to adjust for enhanced performance in ways that we may not have previously considered. Entrepreneurs and leaders found creative and innovative ways to deal with the many levels of disruption brought about by the pandemic. It was interesting to see how one restaurateur converted his premises to a drive-in facility, which allowed him to not only survive 2020, but also to prosper as his market share began to improve.
Last year was difficult. It was filled with, at times, unwanted changes that are set to continue into 2021. Although businesses responded remarkably well to the disruption, the profit margins of many were severely impacted, and government revenue from taxes was substantially lower at a time when significantly more expenditure was incurred on managing the pandemic. This has affected our already poorly performing economy, to the extent that an immediate re-adjustment towards economic reform is urgently required. This may, hopefully, have already started, with refreshing signs of improved collaboration between unions, government, and civil society.
The SAIMM is aware that the post Covid-19 world is going to be very different to that of pre-2020, but a big challenge has been the difficulty in predicting just how different the future is going to be. Therefore, despite some radical changes in our collective mindset, our approach to dealing with this uncertainty has been an exercise in agility, while also ensuring meaningful and steady progress on implementing the changes required of the Institute.
The global trend to moving online is now well established, and the SAIMM is following suit. A full online membership interface system is now in place and our website is becoming increasingly user-friendly. It is rich with information and allows members easy access to the many benefits that the SAIMM has to offer. Our staff are now also placing greater emphasis on communicating and marketing our activities through digital and social media platforms

V.G. Duke
President, SAIMM

2020 - the good, the bad, and the ugly

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Created: Monday, 11 January 2021 06:49

Written by V.G. Duke

I was recently reminded that it is customary to reflect on the past 12 months in the December Journal.

We live in a beautiful country with a wonderful climate and amongst South Africans who are usually able to laugh at themselves and handle life’s challenges. One just needs to tap into social media to see evidence of this. This collective ability to deal with stress was tested to the limit when, early in the year, Covid-19 brought on a level of uncertainty that many of us had not experienced before. It has been a tumultuous year and one that I am sure none of us will ever forget. Ongoing media reports highlighted some of the good, the bad, and the ugly of 2020.

The Good
For the first time in a long while, we saw signs of courageous leadership in South Africa. Despite knowing that our country would have to take a huge economic hit, brave unpopular decisions were taken to make it possible for us to assist those impacted by the virus.

Covid-19 forced us to stress-test our current technologies and the way we structure our businesses. People had to adapt, innovate, and make decisions around change. They quickly realized how easily it is to work differently. Our industry seemed to take Covid-19 in its stride and just carry on, while its employees learned how to operate outside of the office. Many of our members found that they were busier, more productive, and generally very comfortable using the various digital platforms available to them for communicating or holding virtual meetings.

The SAIMM successfully held its first digital Annual General Meeting after having had to rapidly adjust to a new way of operating at the onset of Covid-19. I was impressed at how quickly our staff and members working on the Technical Programmes Committee embraced the challenge and just did what needed to be done to carry on delivering to our membership base.

In fact, this was also true for our country as a whole, where we witnessed how South Africans from all walks of life rallied to keep the wheels turning at our schools, universities, hospitals, and many other institutions. In many ways, the pandemic brought people together, with some like myself spending more time with family as we worked on our homes and exercised together in the garden.

The Bad
The world was not prepared, especially some of the ‘first world’ countries. At home, the initial five weeks of complete isolation came quickly and unexpectedly. It brought with it both economic and social stress. Routines were disrupted and for many, social isolation was emotionally draining.

We witnessed people having to take salary cuts, suffer job losses, and take on debt just to survive, and for most, it will take a long time to recover. Members also found themselves working longer hours at home while having to look after children, spouses, and the elderly. Overall screen time increased and I expect that the gaming and streaming industries did very well.

Covid-19 exposed the true depth of divisions in South African society as the ‘haves’ seemed to fare better than the ‘have-nots’. The less fortunate appeared to be more exposed to the consequences.

The Ugly
When considering the ugly, three things stood out – American politics, local corruption, and domestic violence. It was unfortunate to see how easily prejudice, uncertainty, and fear were able to polarize society as a consequence of American politics.
Pools of anger, resentment, and desperation during the lockdown revealed the raw wound of domestic violence that exists in our own society. This also highlighted how fragile we are when it comes to managing corruption. I found it difficult to comprehend how easily and quickly corrupt opportunists were able to pounce and take advantage of Covid-19 funding.

Looking forward
We need to remember, though, that we hear only what the media tells us, and should be more discerning in what we choose to believe. While it is good that we are informed by the media, we should regularly ask ourselves what did we not hear? 2020 was hard and we now need to move into 2021. I believe that a positive atmosphere is emerging, with people more optimistic about a brighter future, and a hopefully a vaccine for Covid-19.

We are seeing improvements in the markets, a resurgence in commodity demand, and an uplift in our industry. There is a general increase in interest in projects previously placed on ice.

Persistent guidance by President Ramaphosa is resulting in visible signs of authorities acting against corruption, and positive efforts at Eskom and SARS.
There is general recognition by everyone that things are not going to be the same and that we need to change the way they think about business. The world is now seeing things differently, and this provides a good space for people who want to change. The industry has got off to a good start and our leaders, many of whom are associated with the SAIMM, can accelerate these efforts.

Our members don’t need to be holding on to the norms of the past. The fourth industrial revolution, or 4IR, has brought on significant technological progress. Systems have improved, efficiencies are up, and we now need to work harder on developing the human capacity needed for us to simply stay abreast. Let’s meet the challenge and continue to innovate. Look at your own individual sphere of influence and consider how you can contribute to the collective efforts of everyone else.

All in all, it has been a difficult and eventful year, and now it is time to recharge. The SAIMM is looking forward to 2021, and I would like to thank all Fellows, Members, the Secretariat, and our Company Affiliates for their continued support of the Institute and its activities. I wish all our members, colleagues, and loved ones a peaceful holiday and trust that you will all have a blessed festive season.

V.G. Duke
President, SAIMM

Diversity and Inclusion in the Minerals Industry (DIMI)

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Created: Wednesday, 02 December 2020 19:25

Written by V.G. Duke

At the AGM, I spoke about why the SAIMM needs to adapt to a new and more modern mining industry. To this end, we have developed a strategy aimed at repositioning the SAIMM brand in the minds of our members, and indeed all of our stakeholders. There are six key components (or ‘Pillars of Value’) in our overall value proposition, and I intend briefly elaborating on each one of these over the coming months. One of these pillars is the importance of Diversity and Inclusion in the Minerals Industry (DIMI).

Let’s ‘take stock’ by simply looking at our gender mix. Our industry has a workforce that is made up of approximately 87% men and only 13% women. This is consistent with what we see in the SAIMM membership base, where about 11% of our 2 487 members are women.

The graph below reveals the makeup of the mix of female members in the SAIMM. It also shows that these numbers are dwindling, a trend which I believe can and should be reversed. Indeed, our Institute is well positioned to raise awareness on issues of diversity (i.e. around gender, ethnicity, religion, and other diversifying factors).

We all know that people are different, yet we are not always willing to embrace the rich diversity that this introduces into our industry. Our places of work should be free from any form of discrimination around, inter alia, race, culture, sexual orientation, age, gender, religion, and disability. Our leaders should be able to challenge conventional thinking by exploiting the mix of ideas (i.e. creativity) that usually materialises with the wider variety of skills, experience, and cultural approaches that comes with diversity.

We can all contribute by simply distancing ourselves from the levels of polarization that we currently encounter across our broader society. In fact, we should move beyond just workforce diversity and towards also embracing inclusion. This involves making it easier for people from different geographical regions, economic environments, and cultural groupings, to participate and build careers in our industry.

It is for these reasons that your Institute has established a DIMI Committee to:

• Advance issues of diversity (gender, ethnicity, religion, and/or other diversifying factors) and inclusion
• Raise awareness regarding DIMI in the industry
• Create platforms for the development of strategies and decisions that will contribute to a more diverse and inclusive workforce
• Encourage and/or promote diversity on our committees and the SAIMM Council. This can materially complement the efforts of the mining industry as it seeks to establish a representative pipeline of senior leaders for the mining industry
• Establish collaborative linkages to support DIMI.

The DIMI Committee is currently chaired by Professor Selo Ndlovu. It is made up of passionate professionals from both industry and academia who are committed to making a real difference. They are particularly interested in the development of students and tomorrow’s leaders. Online webinars, seminars, and workshops will be used to guide and assist students, who are usually unprepared for the range of cultures encountered in the working environment. This will lead to better understanding, better integration, and enhanced performance, which will in turn help us to retain their potential in the mineral industry and more particularly in the SAIMM.

The DIMI Committee is also collaborating with Women in Mining South Africa (WiMSA), and I was both privileged and pleased to have been invited to attend the Minerals Council South Africa’s recently-held inaugural National Day of Women in Mining, which was a great success. A DIMI conference is being planned for August 2021 and papers have also already been published in the Journal of the SAIMM on the subject of diversity.

‘The vision of SAIMM through the DIMI committee is to provide the industry with knowledge building platforms that will help empower the Southern African Minerals Industry through diversity, gender parity and inclusion.’

V.G. Duke
President, SAIMM

Looking to the future

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Created: Monday, 02 November 2020 16:15

Written by V.G. Duke

Mining contributed almost 16% of South Africa’s gross domestic product (GDP) in 1994, but this has since declined to about half that amount. The country has not benefitted enough from our industry, which has huge potential even when having to compete in an increasingly efficient global environment.

There are many reasons for this, but I am now seeing encouraging changes afoot which lead me to believe that we may have turned a corner, and could well see positive growth going forward.

If this is the case, then we will need to import skills, and this will be at a premium. Many of our engineers have either emigrated or left the industry. The 2018/2019 Annual Report of the Engineering Council of South Africa (ECSA) revealed that nearly half of our 21 500 registered professionals are either retired or over the age of sixty, and that our candidate engineers don’t seem to be progressing to registration as professionals.

The data also highlights the shortage of registered professional engineers, with only one being available for every 2 800 people living in the country compared to international norms of one engineer for 40 people. This must be a concern, because the ability of our captains of industry to exploit the full potential of our orebodies and supporting resources on a sustainable basis will depend on the quantity and quality of the professional engineers available to them.

We need to develop our own capacity, and this should start at the primary schooling level. There is not enough emphasis placed on enhancing the ability of our children, at this early stage, to properly benefit from the teaching of maths and science at the secondary schooling level. If we get this right, we will have a larger pool of talent to attract into the engineering fields at our tertiary institutions. I understand that there are a number of initiatives being developed to address the relatively low levels of maths and science literacy, including the ‘Stemulator’ programme, but a lot more effort is warranted.

Our universities are sound and they are working hard on producing engineering graduates, but graduates need to be put to work so that they can be developed into professionals in a reasonable time. It can take four to five years to produce a graduate, followed by the additional two to three years of internship and mentoring required before they are eligible for registration as an engineer.
This would be the shortest route, but our graduates can achieve this only if they are given an opportunity to work and learn. Unfortunately, many of our graduates remain unemployed and are struggling to find employment.

The SAIMM established the Young Professionals Council (YPC) to contribute to tackling this problem, but they need a lot more support from our industry’s leaders. The Johannesburg Branch of the Institute is also committed to developing our youth and has agreed to work closely with the YPC to create linkages with key people in our industry, and to extend our reach into the rest of the Southern African region where we have branches that also need support.

If our industry is indeed turning the corner, surely we can, and should, do more to support the efforts of the YPC and Johannesburg Branch. I would ask anyone in a position to make a difference to do so by contacting either Shepherd Manjengwa (sfmanjengwa@gmail.com) of the YPC, or Danie Jensen(danie.xpm@gmail.com) of the Johannesburg Branch

V.G. Duke
President, SAIMM

The last article

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Created: Monday, 05 October 2020 11:28

Written by M.I. Mthenjane

Indeed, this is my last President Corner’s article as I prepare to hand over the baton to my successor and incoming President of the SAIMM, Mr Vaughn Duke. Twelve months has passed since I assumed the role – how quickly time has gone by. However, it is pleasing to point to a few meaningful activities during my tenure, viz.,

• The progress with the strategy development for the SAIMM under the leadership of Alastair Macfarlane
• The progress with managing our finances to reduce costs and chart our way to a positive balance, led by Vaughn Duke
• The prompt response to the impact of COVID-19 and hosting events online to continue our objective of delivering quality and professional knowledge to our members. The leadership of Isabel Geldenhuys and the TPC has ensured that the SAIMM continues to demonstrate its relevance and value-add to members
• Establishing a practice of continued learning and knowledge sharing among the Council members through presentations from industry and subject matter experts
• The response and adaptation to an ‘unavoidable digital environment’ by the SAIMM office staff as we were all forced to work from home. As I write this last article, the situation has not changed and is likely to prevail for a while longer
• Establishing a link with the Minerals Council South Africa, which has the potential to strengthen over time and as the industry evolves in its growth.

Looking ahead, I’ll continue to serve the SAIMM as a Past President, carrying on with the key workstream of Professional Development as delegated to me from the strategy development process. My commitment to and passion for the Institute (and the industry) has not waned since joining in 1992 as a fourth-year mining student at Wits. The Institute holds a privileged and unique role in the mining, minerals, and metals industry. As this industry plans for a resurgence and growth to contribute to the country’s economic development, we must all lend a hand to the strength of the Institute. In this regard, transformation is a critical area of focus for this strength building, recognizing and acknowledging the changed South African and industry context, especially in terms of people demographics. Transformation is not an organic process, but one that requires deliberate effort and resolve based on human development and progress for our country’s society – transformation has to remain top of mind and the Council’s agenda for the current and future leadership of the Institute.

M.I. Mthenjane
President, SAIMM

The rise of the institution

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Created: Wednesday, 09 September 2020 18:55

Written by M.I. Mthenjane

As I write this second-to-last letter as President of the SAIMM, we are midway through the year and more than 100 days since the first lockdown was announced on 26 March 2020 in South Africa. It’s early July and the coldest winter in ten years, and I chose one of the coldest days of the month, on a Saturday morning, to ride 50 kilometres around town. I was prepared though, covered head to toe in winter gear, including a buff cloth as a mask. There were fewer cyclists than normal (perhaps because of the cold?) but a lot more runners than I had expected, also in winter gear and masked as a protocol in response to COVID-19. Everyone was covered and therefore unrecognizable, and it was difficult to see the determination or strain in their faces from their efforts.

Wearing masks has become normal and may prevail for longer than we would wish for. We have become unrecognizable to each other as people and so we easily walk past one another, and at a distance for additional protection against the virus. Conversation and collaboration now take place only through online meetings – from my own experience, the benefits are limited because person-to-person interaction as we have known it before is required in order to find solutions to the many challenges that are ahead of us.

While we may not recognize one another at an individual level, we recognize institutional brands – I’m referring to the many institutions that have thrived through this period of the pandemic; the brand does not wear a mask as it stands resilient and responds to the challenges from the virus. The ‘new normal’ provides an opportunity for institutions to rise to the challenge and opportunities that are emerging from this period in our lives. They will be able to do so because of the invested capital within their organizations, viz., intellectual capital from the human resources and innovation; financial capital as a result of strategic and prudent management of operations and balance sheet; relationship capital invested with employees, customers, suppliers, communities, civil organizations, shareholders, and government; and lastly and most critical, leadership capital, which will provide the vision and bold actions required to overcome the socio-economic and environmental challenges we are faced with.

The SAIMM is a brand more than 125 years old which has prevailed through the challenges and tribulations of the mining, minerals, and processing industries. We are transforming and responding to the damage done by the virus, by adopting technology innovations to continue our important work of professional development and crafting a new value proposition for our members and stakeholders. It is a difficult period, but we will prevail as we harness the intellectual, relationship, and leadership capital within this institution

M.I. Mthenjane
President, SAIMM

Lessons from ‘rona’

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Created: Tuesday, 11 August 2020 15:12

Written by M.I. Mthenjane

As the first week of June 2020 approached, the ‘R’ word had adapted to a more positive form with the ‘Recession of lockdowns’ in many countries around the world – the number of coronavirus (‘rona’) infections were beginning to slow down and so the curves were flattening and lockdowns being lifted. However, South Africa, despite the increasing number of infections (as more people were being tested), moved from level 4 to level 3 in terms of the National Disaster Act, driven by the need to alleviate the effects of the lockdown on economic activity.

As we emerged, hesitantly, from the frustrations of selfimposed isolation into a semblance of normality and greater mobility, I reflected on the many webinars that I listened to and asked myself the question – what lessons have I learnt? Quite a few, and I’ve captured them into five distinct messages for this letter.

Before laying out the lessons, let me set the context with a quote from a book that I’m restarting¹ to read: ‘… creating community, the most valuable form of social capital – the intimate, supportive relationships that spur collaboration while deeply satisfying our human need for connection, belonging and meaning’. Otherwise put, ‘a life-long community of colleagues, contacts, friends, and mentors …. social science research tells us President’s Corner that satisfying these relational needs isn’t just about some soft notion of “the good life”; these are the hard prerequisites for creativity, innovation, progress – and, at the end of that chain, profit.’²

The excerpt provides a backdrop and reference for key human traits that we at times take for granted. These are the traits which, in my humble view, have been temporarily suspended by the presence of ‘rona’ in our lives.

Thus, the first lesson from ’rona’ was the imperative of our time: to safeguard lives and livelihoods. In the absence of a vaccine, adhering to appropriate protocols to ensure safety and hygiene is our only chance of preventing further infections and transmission of the disease. The ability of people to live normal lives has been shattered as if by the force of Thor’s hammer. It is public, private, and civil society leadership, in an unprecedent response, that has been carrying these imperatives, high above the shoulders, in either hand – the balance maintained while we trudge towards a vaccine will determine the ‘new normal’.

The pandemic is described firstly as a humanitarian crisis and secondly an economic disaster. The former arises from the extent of devastation on the poor and destitute; the inadequacy of health facilities and potential increase in poverty and inequality. However, the response to these challenges was amazing. The unbounded combined action to save lives has never been witnessed on this scale and depth in South Africa. This brought to mind the second lesson and confirmed that life is a value – we have realized what matters most, viz., safety and health, wellbeing, love and care for ourselves and others … all the emotional and mushy stuff that we often forget about.

At the same time, we must show care for what we have become and created as a society, the economy – our livelihoods and source of purpose. This creates the connections beyond family, gives us hope, and it is where innovation happens and where we seek fulfilment because what we do in this realm makes a difference – not only to our own lives, but to others’ lives too. ‘Rona’ has been the sobering antithesis to this life experience.

Now enter lesson number three – politics are the other side to the economy on the social coin, and therefore one cannot exist and act without the other. A thriving economy makes for political gain and the economic recession expected for the balance of 2020 and into 2021 will make for interesting politics over the next twelve to twenty-four months, both domestically and in several other countries around the globe.

Then there was the lesson of what the new normal may look like. While we await a viable vaccine to be found, we will need to learn to live with ‘rona’. An interesting lesson from Wuhan, the epicentre of the virus, is how the population has been colour-coded into red, amber, and green depending on the extent of exposure to the virus, which then determined the degree of mobility allowed by the state. Enter the surveillance society, where with the use of technology our every movement will be monitored, for better or for worse. Further, given the unprecedented levels of stimulus funding provided, the role of government in markets will be different, but how different only time will tell. Business will be a more active and responsive participant in society to address key issues, viz:

• An inclusive approach to economic development that ensures a meaningful reduction in inequality. Pay parity will become an area of public scrutiny; co-investment in infrastructure that enables greater mobility and reduces the cost of living, to name a few. Business will be judged by its impact in a way that changes lives.
• ‘Rona’ has elevated the urgency for response to climate change – the cumulative and systemic impacts from climate change and ‘rona’ demand a coordinated regional and global response. ‘Rona’ has demonstrated the ability for collaboration, which will be expected in relation to climate action.
• The tech race will intensify, but all participants will win. Based on the coordination and cooperation witnessed in response to ‘rona’, technical collaboration should enable developing nations to transcend current challenges and progress for the benefit of their citizens.

Lastly, I believe we are moving towards an era of increasing engagement because of a combination of the factors that I’ve described earlier, such as the state of the fiscus and debt troubles faced by governments post the lockdowns, he recessionary state of the global economy and social consequences, and policy response and effectiveness to manage economies out of the economic trough. Government or business cannot manage this situation individually. For our society to emerge strong from the effects of the lockdown, the acknowledged imperative of safeguarding lives and livelihoods must persist. Leadership from the public and private sector, with the support of civil society, must strengthen even further to build a foundation of trust amongst these social players and in society in general, which will then provide for better collaboration.

M.I. Mthenjane
President, SAIMM

¹ This is this common ... right?
² Excerpt from ‘Never Eat Alone … and Other Secrets to Success, One Relationship at a Time’. Keith Ferrazi and Tahl Raz., Penguin Random House.

COVID-19 Lockdown

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Created: Wednesday, 22 July 2020 09:35

Written by M.I. Mthenjane

It is two weeks since the Level 5 lockdown was lifted by President Cyril Ramaphosa. And on the evening of 13 May he gave indications of a possible further reduction of restrictions – some modest relief is imminent, but more importantly, this is offering hope of eventually being able to change from the daily routines established over the past seven weeks. It has been frustrating, but educational and necessary.

The global pandemic statistics continue to rise and so are our national infection and mortality rates as testing picks up pace, but the trend in South Africa is encouraging in terms of a slowing rate of increase and what will be a pragmatic approach to the lifting of the lockdown. Of interest is the low mortality rate of 1.8% in South Africa compared to the 6.7% globally. We have to continue the discipline of social distancing and other preventative behaviour as the lockdowns are relaxed in order to ‘live with the disease’ and prevent infections and deaths.

The mining industry, as represented by the Minerals Council South Africa, has been reporting on infections within the sector. As at 13 May, the total number of reported infections stands at 18, with zero fatalities. The industry has demonstrated impressive and co-ordinated action among its members and collaboration with government in response to the need to protect the safety President’s Corner of employees and surrounding communities. The leadership of the mining Ministry from Mr Gwede Mantashe is commendable. It’s a moment to be proud of working in this industry. Further details regarding developments and activities of the industry related to the COVID-19 response can be found at www.mineralscouncil.org.za

The world will not be the same when we emerge from the lockdowns – consequently, the SAIMM is evolving and preparing for the ‘new normal’. Of critical importance, the members of staff of the SAIMM remain safe and well while working from home. We continue to work on the strategic direction of the Institute to address our financial challenges. You will have begun to experience some of the changes through the launch of our webinars – this is a milestone for the SAIMM in terms of our digital strategy. There is still much more scope for development and progress that can be achieved.

The lockdown period provided various opportunities for learning, discussion, and preparation for the easing of the lockdown restrictions. The impact of this continuing set of circumstances on livelihoods and wellbeing will be unprecedented. Counted among others are the higher unemployment rate. which may reach 50% as a result of a possible 13% contraction in the economy. Government will not succeed on its own, even with the most brilliant economic recovery plan. As an industry and along with the private sector and other social partners, we have a huge task at hand and a role to play in rebuilding the country’s economy and stitching together the social fabric that will unite us and see us through this challenge.

I wish you safety and health during this challenging time, and urge you to maintain a positive attitude. This situation, too, shall pass.

M.I. Mthenjane
President, SAIMM

COVID-19 and the National Lockdown

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Created: Wednesday, 20 May 2020 09:35

Written by M.I. Mthenjane

I ’ll remember the month of March 2020 for two events that happened in tandem – the first one was my birthday on the 26th when I turned 50 years (half-century) old. Turning 50 years is significant in anyone’s life and mine was no different. However, I did not expect it to be as dramatic as it turned out to be, which leads to the second event, the beginning of the country’s 21-day lockdown from midnight on 26 March to midnight on 16 April.

At the time of writing this letter, we were on the third day of the lockdown where, other than persons involved in essential services, we are all in quarantine within our homes or isolated if we have been infected by the coronavirus disease, also known as COVID-19. Most industries remain closed during this three-week period – the South Africa’s mining industry production levels are down to about 30% and globally, we are headed for a recession, the Global Covid-19 Recession (GCR). The impact of the pandemic is unprecedent in the modern world and its effects will be long-lasting in several ways; including, to name a few, how we work (and play), the nature of economic activity, and specifically for the SAIMM, how we pursue our primary objective of providing continuing education and skills for our members.

 A fundamental and immediate change that has happened in how we work is the huge exodus to (home fitness and) digital platforms to continue with ‘office work’ (work from home – WFH). Work at the coal face (no pun intended) continues with minimal people resources to ensure the continued supply of coal for our electricity generation (imagine the double whammy of being isolated at home with intermittent electricity availability) – to prevent infections and transmission of the disease remains the primary objective. For those operations that are already digitalized, this period of lockdown, such as is prevalent in most countries where infections have been recorded, the transition to digital is vindicated. This is the beginning of the future of our lives and we need to adapt promptly or suffer the consequences.

The SAIMM, as with other organizations that convene conferences and meetings for learning, has postponed and will likely cancel some conferences during this year as a result of the lockdown and possible continuing consequences of the COVID-19 disease. Alternative and innovative avenues to continue to deliver our services, such as webcasts at scale’ (i.e. for a large number of people), are being explored. This is the upside of the pandemic and we will take advantage of the opportunities presented to us to thrive in this new way of thinking and acting.

There’s no telling whether the three weeks will be sufficient to arrest the spread of the disease in South Africa. It’s the minimum and scientifically proven method of preventing further infections and we must adhere to this advice with military discipline for the sustainability of the nation. We are all under varying degrees of emotional and mental strain, the domestic economy is under recession, and as at Friday 27 March, Moody’s Investor Service finally downgraded South Africa’s sovereign credit rating to junk status with a negative outlook. Livelihoods are at stake - I dare say that we have reached the bottom in our social and economic development. It is now the time for leadership, not only as I have discussed in earlier letters, to rise up to this occasion – ‘the greatest leader is not necessarily the one who does the greatest things. He is the one that gets the people to do the greatest things’1. Wishing you all safety, health and resolve. Please do take care.

M.I. Mthenjane
President, SAIMM

Focus on environmental, social and governance

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Created: Tuesday, 24 March 2020 15:19

Written by M.I. Mthenjane

The beginning of February marks the annual Investing in African Mining Indaba Conference, which takes place in our beautiful Cape Town. This was the 26th event and remains Africa’s largest mining investment event. It brings together investors, government, junior miners, mid-caps, and the world’s largest companies – all under one roof.

I was privileged to attend the event this year, which was aptly themed ‘growth and investment in the digitized mining economy’. The conference had a positive vibe given the number of attendees, estimated at over 7000. However, the theme did not capture another topic that was high on the agenda of many presentations and panel discussions to promote the growth of investment in mining, viz., sustainability and the topic of ESG (Environment, Social and Governance).

There was a heightened attention to ESG during 2019 and specifically the topic of climate change, owing to some severe weather conditions and natural disasters, such as the fires in Australia and floods in various parts of the world. ESG has shifted from periphery to the mainstream among the investment community. It is a primary filter for investment decision-making and selection of shares on the stock market. This is a significant shift in the mindset of investors and will result in material changes to the conduct of mining companies (and other industries) and allocation of capital investment.

It is therefore pleasing for me to highlight and compliment the SAMESG Committee for receiving the United Nations Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) Honours Award on 30 October 2019. ISAR reviews developments in the field of international reporting and promotes best practices for corporate governance. Within the context of Agenda 2030, ISAR contributes to the realization of the Sustainable Development Goals through enhanced transparency and sustainability standards for companies. Now in its second year, the ISAR Honours 2019 attracted 33 entrants from around the world and SAMESG received the Award for an Outstanding National Initiative to Advance the Sustainable Development Goals. The SAMESG Committee, who were present to receive the award said: ‘The development of the SAMESG guideline was seen as an imperative considering that resources companies listed on the Johannesburg Stock Exchange, at that time, were not subjected to a formalized standard for reporting on ESG matters and determining their impact on mineral project reserves, resources and valuations … ‘We believe that this guideline, when applied diligently, has the potential to significantly improve the quality of information made available to investors in and shareholders of mineral resources companies in respect of environmental, social and governance considerations.^’1

Hence, ESG is providing an opportunity for deeper alignment between shareholders and corporate leadership to share both on the upside and downside performance of the company arising from capital allocation decisions. Mining is a long-term investment with positively transformative qualities in terms of its impact on society, therefore the focus on the long term that is emerging through ESG is absolutely welcome. The individual ESG elements are integrated and represent an aggregate of the several individual and material indicators of a company’s performance.

Consequently, the future of mining, not only coal mining, was topical (and frankly looks promising given this changing perspective). Given the emphasis on digitalization and ESG, with a focus on climate change, mining and its role in society was extensively discussed at the Indaba. Amazingly, the discussions were not all on the technical merits of the future of mining. The most spoken about issues included the ‘future of work’ in terms of the future profile of a ‘mining employee’ and the related skills, how mining will take place in terms of automation and remote mining, as well as the accountability to society that mining will conduct itself with². This latter issue is already evident in terms of the EY’s top ten business risks facing mining and metals in 2020 (www.ey.com), where License to Operate (LTO) is the no. 1 risk for the second year in a row. The publication is an interesting read for emerging risk trends in the mining sector and I recommend it.

A high-level assessment of the top ten risks for 2020, compared to the previous year, is a clear indication of the changing nature of mining. Sustainability is the prevailing theme in terms of license to operate, employee wellbeing (future of workforce), productivity in terms of cost performance, technology and innovation, and return on investment. As the industry evolves, and it is doing so in a big way, so should we as the Institute in order to remain relevant and worthy to our members. Are we sufficiently grappling with these issues and evolving as an institution? Please share with me your thoughts at president@saimm.co.za

M.I. Mthenjane
President, SAIMM