S.Africa needs stable mine climate: Anglo CEO
CAPE TOWN (AFP) – South Africa must create a business-friendly mining climate to attract global investors and never allow a repeat of last year’s strike violence, Anglo American chief executive Cynthia Carroll said Tuesday.
“South Africa will only succeed if it fosters an environment that is conducive for business and attractive to international investors,” said Carroll, who is the global giant’s outgoing chief.
“Creating that environment starts with the need for stable labour relations and the maintenance of law and order.”
Illegal strikes last year rocked Anglo American’s platinum division, the world’s largest producer, known as Amplats. The unrest spiralled out of competitor Lonmin’s Marikana plant where police shot dead 34 protesters.
Amplats on Monday reported an operating loss of 6.3 billion rand ($713 million, 527 million euros) for 2012, when two months of industrial action shuttered its main South African operations.
“Violence and criminality are always unacceptable and they must never be tolerated by society. We must never go back to those days again,” said Carroll.
She also said that investors need a stable regulatory environment.
“They will not invest if there is a fear of onerous and unpredictable regulatory changes, and nor will they invest if there is a threat that existing regulatory requirements will be enforced in an arbitrary and unequal manner,” she said.
Carroll said the firm was committed to the platinum industry though major restructuring plans — delayed for two months — were unavoidable.
“This is a business in which we plan to invest 100 billion rand ($11 billion, 8 billion euros) over the next decade but to do that we must have to make the changes necessary to make the business sustainable,” she said.
The controversial project includes 14,000 possible job cuts, which has drawn furious response locally.
The firm will try to create as many jobs and redeploy 9,000 potentially affected workers, she said.
Dwindling platinum demand and relentless increases in costs, including labour and energy, have squeezed margins dramatically. The sector earns inadequate returns.
“This is an unsustainable position. In the case of Anglo American Platinum, we have to restructure the business to make it viable for the future and in so doing to protect over 45,000 jobs,” said Carroll.
“We need to recognise and tackle the enormous economic challenges the platinum sector faces. This is an industry in crisis.”