our approach to creating value
The challenging business context

Increasing stakeholder expectations

The challenging local and global context has been further exacerbated by the growing demands and expectations of stakeholders. In South Africa, communities and employees across all sectors have been flexing their muscles: communities have been protesting against what is seen to be poor service delivery by local municipalities, adding pressure to mining companies to address these shortcomings; employees have been expressing dissatisfaction with their employers' value proposition; and community-based non-governmental organisations have been increasingly active in holding companies to account. Collectively these events suggest a groundswell of community activism presenting real risks to business sustainability and the retention of their social licence to operate in host communities.

At the same time, business is facing a regulatory landscape that is becoming more difficult to navigate, with a plethora of policy decisions adding pressure on our abilities to do business both in South Africa and Zimbabwe. The lack of capacity within certain strategic government departments – at national, provincial and municipal level – is adding to the challenge of regulatory uncertainty, and constraining our ability to make long-term investment decisions. The recent elections in South Africa, and the subsequent changes at a ministerial level, have presented further challenges in terms of rebuilding relationships with government, while in Zimbabwe we face continuing uncertainty around calls for indigenisation and beneficiation.

Compounding the growing pressure on companies to demonstrate greater social return, are the calls from an increasingly nervous and outspoken investment community for the South African platinum industry to improve cost and operational efficiencies to boost their progressively eroding profitability. Delivering on these shareholder demands may require remedial action including retrenchments, an action that is politically highly sensitive in a region with such high unemployment.

Addressing the underlying structural conditions

Addressing these competing stakeholder demands, and ensuring business resilience in the challenging domestic and global context, is far from easy. Doing so will raise its own set of challenges and potentially create a series of unintended socio-economic problems.

To achieve our aspirations on safety, productivity, and employee development – and to address the continuing concerns regarding labour volatility – ultimately we will need to move away from our historic dependence on the ‘low-wage, high-employment' business model on which our mining industry was founded nearly 150 years ago. Achieving the radical switch to a ‘high-wage, low-employment' model, in which our mining methods are mechanised and people are moved from the rock face, will provide some significant benefits – for our operations, the people we employ and the economies we serve. It will lead to fewer, safer and better paid jobs, offer improved development and career advancement prospects for our employees, allow more women to be employed, and ensure the sustainability of our business, with the significant economic benefits that this provides. While ultimately this is a more sustainable approach, it is likely to come at the cost of jobs, presenting its own set of associated socio-economic difficulties.

Similarly, we ultimately need to see the end of the migrant labour system – a system that, for all its well-known social ills, provides work and sustains the families of mine workers, as it has done for the past 150 years. The effect on our rural areas, particularly the Eastern Cape, as well as our neighbouring countries such as Lesotho, Mozambique, Zambia and Malawi, where most of our migrant workers come from, will be severe. Ending the system raises additional challenges; the reality is that the best mining skills in South Africa have traditionally come from Lesotho, Mozambique and the Eastern Cape. To overcome this challenge we need to invest in developing a bigger pool of skills from our local communities. This requires changing an ongoing perception among many local community members that underground mining jobs are dangerous, physically demanding and poorly remunerated.