Ben Magara, the CE of the third largest platinum producer in the world Lonmin, appeared to be pouring his heart out on the matter of fixing social relations in and around the operation which is trapped in the middle of a highly volatile social space.
Magara, the first black CEO of a major platinum miner who took over at Lonmin three months ago, infused highly emotive words into the company’s financial statements for the year ended September. The results were released this morning. This comes after South Africa observed the first year anniversary of the ‘Marikana Massacre’ which occurred as a direct result of labour tensions within Lonmin operations.
Magara said “I was appointed Chief Executive of Lonmin Plc on 1 July this year. Under the interim leadership of our Chief Financial Officer, Simon Scott, Lonmin had been strengthening its position. Set against a continuingly tough market, and given the disruptions which defined the beginning of the period, our ramp up quickly exceeded the schedule which was maintained throughout the year.”
He added “Whilst proud of our operational achievements we regard our solid performance in 2013 as the foundation to build on. Our sustained hard work to improve relationships with our employees is yielding results, not least around labour relations, but I want to see a step change.”
Our safety performance improved and I believe that our ‘zero harm’ aspiration is achievable, that all injuries and fatalities are preventable and that this remains our goal.”
We remember with great sadness the loss of our colleagues Elson Ngomane, Gil Macamo and Ayanda Dziliyana during 2013. Their deaths remind us of both the intrinsic dangers of mining and that we must redouble our efforts in this area.”
Magard said “My priority on joining the business was to meet as many employees and stakeholders as possible to begin the task of winning back hearts and minds in the wake of last year’s events at Marikana.”
To this end I visited our shafts, plants and the communities around them and went to the areas of South Africa from which most of our employees come. I also visited the families of those who lost their lives during the terrible Events at Marikana last year. All these groups of people expressed to me the shared wish of wanting Lonmin to succeed. This is important and encouraging, given that we regard the support of all our stakeholders as crucial in stripping uncertainty from our business and driving higher performance.”
Whilst our hard work has begun to rebuild trust, demonstrated by the fact that we were able to sign a union recognition agreement and attend the Marikana commemoration, we still have much more to do in this regard.”
Our stakeholder relationships are business critical. I reject any contention that these are ‘soft’ issues, set against the ‘hard’ issues of operations and finances.
In looking ahead magara said “I have set out four management pillars for the future which will drive delivery of value to all of our shareholders and stakeholders.”
He said mining is a labour-intensive industry and people are a key to success. “In narrow tabular mining, where mechanisation will always be limited, people make the difference and should be a source of competitive advantage. This is absolutely not a “soft” issue.”
He complemented government for interventions made during 2013. “Lonmin’s greater collaboration with Government and with our colleagues in the South African mining sector will enable steady progress to be made in establishing a renewed stability.”
Our challenge is to build on this positive start to create a long-term environment where performance increases through a more content and dedicated workforce, removing uncertainty from the business, and in which our success benefits our shareholders and all our stakeholders. This is fundamentally about rebuilding trust.”
Magara added that “Our relationships with our employees and the communities who live on and around our operations are key to our performance. Pre-eminent amongst the requirements is the need to improve housing, facilitate good health and education and continue to deliver on our environmental responsibilities.”
He said the conversion or upgrade of hostels into family units and single private units is one of the measures the company is judged on. “We have converted 107 hostel blocks. We expect to achieve completion in 2014.”
We have also concluded research and scoping projects around Integrated Human Settlements as part of our long-term planning for housing development and supporting infrastructure at Marikana.”
Magara also highlighted the post financial year end initiative where Lonmin contributed 50ha of serviced land for housing development. This land contribution, said Magara, is an integral part of the integrated human settlement plan for the Marikana area and forms part of our commitment to support the Presidential initiatives to improve living conditions.”
In addition Lonmin will contribute at least R0.5 billion over the next five years towards employee accommodation and bulk services as part of its Social Labour Plan programme.”
Magara noted that social infrastructure cannot be delivered by business alone. “But this is an area in which Lonmin’s involvement must be accelerated to produce a step change. By the same token, and again in partnership with Government, we will remain committed to our long-held objective of reaching “zero-harm” in everything that we do.”