Master of the trade

Leadership magazine speaks to Mzila Mthenjane, President of the South African Institute of Mining and Metallurgy (SAIMM), about bringing the art of the possible into reality in the form of a mining operation

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Prior to 1994, you were already working in the mining industry—could you talk to us about the transformation that has taken place since the end of apartheid within the sector?

The mining sector is no doubt a primary proxy for transformation in South Africa, largely due to its role in the apartheid history of mining and the South African economy. The industry has been in the media in relation to transformation ever since the leakage of the 1992 Mining Charter. This attention has not receded and is likely to persist over the next decade. A few noteworthy changes include: -

  • In terms of education, black mining engineers were amongst the rarest of human species. In my final year at Wits in 1992, there were no more than 20 mining engineering students and seven to eight were black, with no females of any race present. Today, the School of Mining Engineering at Wits boasts amongst the most diverse student and staff complement, in terms of race (more than 80 are black), culture, gender and country of origin. In relation to the workplace, there has certainly been some progress, particularly at the professional levels from entry management roles to senior executive. Black people were not allowed to obtain a blasting certificate, a primary requirement for entering the supervisory level at a mine until a few years before I started working. The removal of this legislation has since provided for many career opportunities for both men and women. Structural challenges remain, in terms of access for women as well as below-management levels in terms of skills and education for those employees on the ‘coal face’.
  • Improving education and skills development remains a major opportunity for the transformation of the industry; this is no surprise given that the industry, in particular, deep level hard rock mining, was built largely on the premise of a large population of the workforce not requiring a high level of education and skills. ABET (Adult Basic Education and Training) programmes were an attempt to address this challenge, however, they have not been sufficient or adequate. The systemic impact of this structural feature of the mining industry prevails to this day.
  • It’s worth noting the legislative changes that have taken place, such as the Mineral and Petroleum Resources Development Act and related Mining Charter, which is a key feature of the transformation of the mining industry. The requirement for mining companies to invest in local communities, and those communities and employees to own a share of the economic benefits, was genius.

What we have achieved after 25 years has only been to arrest the decline in the development of black people and the South African nation as a whole. I believe that a better working relationship between business, government and communities, and an honest intent at implementing legislation as well as business strategically embracing transformation and implementing it for its spirit, rather than the letter of the law, holds more prospects for South African progress than we have witnessed so far.

What are the biggest changes that have taken place within the sector, globally, over the last two decades?

I witnessed the fundamental restructuring of the South African mining industry in early 2000, unleashed by the dawn of our democracy in 1994. One of the first changes I observed took place at the JSE, where individual mine shafts were listed.

The influence of the international capital markets was felt with the consolidation of these mines to establish focused and pureplay mining companies that we know today, such as Anglogold, Amplats Gold Fields and some of the first BEE transactions, the most notable being the acquisition of interests in JCI and Harmony by a consortium of black investors. Further, the disaggregation of conglomerate companies such as Anglo American, Gold Fields of South Africa and Gencor provided for a restructuring of the South African economy and the creation of several independent companies across various sectors.

The commodity boom, driven by demand from China is a notable change in the sector, but the most alarming outcome of this event is that South Africa totally missed it. There is no evidence of the share in the spoils of that boom in terms of increased exploration and mine development with the concomitant benefits of employment creation and GDP growth in that period. Such is the evidence of the impact of some aspects of the mining legislation which were and remain disingenuous for investment and economic stimulus.

The recent three to five years have seen an increase in investment in technology and innovation development. The disruptions to business models are affecting every industry—the mining industry is no exception. As resources and reserves deteriorate in quality due to increased depth and lower grades, technology, and innovation, in addition to operational excellence best practice, are key to ensuring continuing competitive advantage and reduction of input costs.

The benefits of technology adoption include the integration of value chains compared to
previously siloed operations. This seamlessness in business operations increases the volume and quality of information available, at an instant, for quick decision-making, thus providing for opportunities to identify constraints and develop immediate responses that can be executed within a much shorter period of time than was possible before.

Sustainability and sustainable development concepts have become mainstream, spurred by climate change risks and the increasing shift of power to stakeholders from business. In the same manner that disruptive technologies have had an impact on our lives, climate change is indiscriminate in its impact. The result has been and will be, a systemic change in business models, to varying degrees depending on the structure of the mine operations and nature of the commodity being mined.

What does the post-mining use of rehabilitated land entail and how does it benefit the mining industry?

Ideally, as a conscious and deliberate activity, post-mining use of rehabilitated land should be designed into the mine development and operations programme such that it takes place seamlessly from mining economic activity to the succeeding economy. Mining is a temporary economic activity and as such, revenues earned should be wisely invested in current and future socio-economic developments to ensure sustainable livelihoods.

The succession economy can also take advantage of relevant mine infrastructures, such as office buildings, roads, and utilities. There are great opportunities for mobility (movement of people, goods, and services) for communities within mining operations with rail infrastructure.

Opencast mining lends itself easily to this concept, but underground mining also provides different opportunities—there are many answers to the question of what can you do with holes and tunnels underground—storage, including water and energy. There are old underground mines that are used for document storage—we still treasure our documents.

As a post-mining and succession activity, post-mine land use provides the opportunity to unlock the several billions of Rands trapped in mine rehabilitation funds. Whilst rehabilitation provision remains a necessity, how this money is used for mine rehabilitation can be in such a way that it creates a new economy—we need to think differently of how we will turn our mining communities into thriving locations of economic and cultural activity that will be a drawcard for domestic and international tourism

The mining sector plays an important role within the South African economy in terms of exports but also job creation—how can the industry still improve in order to ensure more sustainable jobs?

South Africa is well-endowed with minerals in the ground—but as one wise geologist said, “whilst it’s in the ground, it’s rock”. Without the required legislative support and investment to extract these minerals, this mineral endowment will not distinguish the country as an investment destination. Hence, employment creation in the industry will require that there be better co-ordination of legislative requirements to attract the necessary investment from both local and offshore investors. Further opportunities to invest in technology and innovation in the development of new mines will also create jobs for the many unemployed graduates.

What are your goals within your role as the President of SAIMM?

In my inaugural speech, I spoke about the concept of mineral succession planning as an opportunity for future economic development beyond mining. Rather than speak of mine closure, we need to leverage from exhausted mineral reserves and mine sites and create new industries for local economic development. There are several examples of where this has been done both locally and overseas, such as Eagle Canyon Golf Estates in Johannesburg, Eden Project in Cornwall, UK and the Sunken Gardens (Butchart Gardens) in British Columbia—the latter are an international tourist destination. The possibilities are endless with the right business and political leadership. Seeing a take-up of this concept and translation into real opportunities, even beyond my Presidency, will be a key achievement.

Transformation, especially in terms of gender and youth diversity, provides scope for growth and sustainability for the SAIMM. Current statistics are in the right direction, but additional and deliberate effort is required. 

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