Shared understanding necessary for success

22nd January 2021

Shared understanding necessary for success

DRDGOLD CEO Niƫl Pretorius

As South Africa’s mining industry enters 2021, the key role-players remain fragmented in terms of ambition and purpose. As a result, many operations are in slow decay and on course for premature closure, with unnecessary and avoidable loss of mineral resources, jobs and opportunities to follow.

Countries, communities and corporations that excel are those that share an overarching priority; one that, [while] sensitive to varied and conflicting interests, resonates so strongly in each of the interested parties, that the mere notion of violating it is unimaginable.

Preventing the premature closure of a mine could and should be such a priority. It is the measure which, [among] all the other important things we consider, serves as the final check for our demands, strategies, policies, regulations and decisions.

Its effect is that we refrain from certain actions; that we do not go beyond a certain point in the pursuit of our own interests and; that we proactively use our influence and capacity as best we can to promote the livelihood of the industry. This does not mean abandoning return on capital, transformation and fair working conditions; it simply informs how these interests are pursued and promoted.

I would suggest this standard is appropriate because it is dynamic and promotes an inclusive view of value [and of] long-term sustainability.

For operators, it means spending capital and setting up the systems required to optimise volume throughput at the lowest possible cost per unit tonne. This will lower ‘cutoff’ grade which, in turn, will allow one to mine as much of the resource as possible. With this kind of thinking, there is no room for the ‘harvesting’ of a resource, but rather a sense of custodianship.

For the regulator, it means creating a favourable climate for investment and mobilising the country’s resources to promote the industry.

This means, [among] other things:

For labour, it means abandoning the idea that it is management’s opponent, acknowledging that it shares responsibility for the sustenance of the business, adopting the notion that the success of the business is the catalyst for the prosperity of the next generation. For organised labour, it means sharing their members’ concern for the business and assuming co-responsibility for its sustainability.

By adopting a simple shared vision – a joint consensus – to reverse the course of an industry, the impact could be significant in terms of revenues, jobs, taxes, investment and community development. This is the role mining can play if, despite all our differences, we agree on at least one thing – that there is no way that we will allow a mine to close for all the wrong reasons before its time.