06 JULY 2021
How Anglo American Platinum is reimagining future of mining
CEO Natascha Viljoen on the company’s push to enhance safety and sustainability and to support local communities.
As a child growing up in Klerksdorp, South Africa, Natascha Viljoen had her first exposure to mining, accompanying her father to his job as a hoist driver. Years later, after studying extractive metallurgy at South Africa’s North-West University, she entered the industry as a metallurgical engineer. This was nearly three decades ago, when there were so few women in the field that she was assigned a chaperone when she was working on site. Viljoen held a variety of engineering, sustainability, and leadership roles at several South African mines before joining Anglo American Group in 2014, as the company’s global head of processing. Today she is CEO of Johannesburg-based Anglo American Platinum Ltd. — a group member company of Anglo American PLC group and the world’s largest refiner of platinum group metals (PGMs), with operations in South Africa and Zimbabwe.
When Viljoen took the helm in April 2020, it was the early days of the COVID-19 pandemic; she confronted difficult decisions about how to operate under unprecedented restrictions and how to provide support to employees and surrounding communities. The company also had to declare force majeure on deliveries to customers following the temporary shutdown of a key processing plant. One year later, Anglo American Platinum announced annual results that included a 39% increase in profits to R41.6 billion (US$3 billion) — a record, despite a 14% decline in production. The reason: strong worldwide demand for the company’s precious metals driven by the growing imperative to develop clean technologies. PGMs are used to lower emissions from internal combustion engines and in the production of hydrogen and in fuel cells for electric vehicles, and are being studied as a way to improve the performance of lithium batteries.
Under Viljoen’s leadership, the company has set a course for modernisation and technology investment that will automate processes, improve safety, and further its sustainability goals. As Viljoen recently explained in a video interview with strategy+business, she credits the company’s human-centred purpose with helping her through those difficult early days, and in helping to plan for Anglo American Platinum’s future.
How do you define Anglo American Platinum’s purpose?
Our purpose as an organisation is “reimagining mining to improve people’s lives.” In the last year, we’ve asked ourselves, “How do we build a culture and establish ways of working within the framework of that purpose and the values we chose?”
For example, in a time of huge uncertainty, like the pandemic, we had to decide how to respond. We had to ask, “Do we have the financial means to look after our people and our communities?” Our purpose and our values helped us to make those decisions. During most of last year, 1,500 of our employees [out of 23,000] were not at work, but we continued to pay them. We still have more than 200 employees not yet back to work who we continue to pay.
In hindsight, this would have been an easy decision to make because commodity prices are very favourable for us. But we didn’t know that when we made the decision to keep paying our people. Instead, it was guided by our purpose. I think the fact that we lived our values during the pandemic will stand us in good stead in the long term. We see that appreciation in our communities, and in our people.
You’ve now been at Anglo American for seven years, serving as CEO of Anglo American Platinum for the last year. How have you been able to influence the organisation’s culture?
When I came into the role of CEO, I wanted to get to know the business inside out. I’ve done interviews with more than 160 members of my senior team. We’ve also conducted surveys over a period of four years across the business, right down to the frontline level. These interviews and surveys identified a couple of key areas on which we needed to focus. One, specifically, was around culture.
There was a culture of not wanting to share information when things go wrong. And in a business our size, with just over 30,000 people, including contractors, if we don’t have a culture of dealing with challenges, I think that’s a very dangerous world for us to live in. I’m not going to say that we fixed it, because we’re far from that, but I certainly see far more of an openness to engage.
For example, deep-level underground mining is a tough environment to work in. I believe that you have to get feet on the ground to really understand the organisation. Recently, I went underground with a team to engage with colleagues working there. It was my fourth time doing this. The previous three times, colleagues were very reluctant to talk to me. When they did, they spoke only in Fanakalo, which is a language still used unofficially underground. It dates back to the late 1800s, and is very much associated with migrant agricultural and mining labour when Southern Africa was colonised, and more recently during the Apartheid era.
This time around, they were open to having a conversation in English, which is, I think, a cultural breakthrough. We spoke about the good, the bad, and the ugly. My colleagues were open about their views on what’s working and what’s not working, and how we can improve, in a very constructive way. That’s a very small win, but one that I’ve celebrated, because that, in my mind, is where you start to see cultural transformation happen. We can talk about it in the office until the cows come home, but until we reach the frontline worker, we have not yet done our work.
What are some of the other changes happening, both at your company and within your industry?
When I started as a young metallurgist, I was the only female in the workplace. That has changed quite significantly. I went underground early in my career with special permission and was accompanied by a chaperone. Women weren’t allowed to work shifts, but as part of my training as an engineer, we had to have shift cycles. And again, I was appointed a chaperone to do that.
It’s still a challenging environment. It’s a workplace designed by men for men. We’re working to make sure that our policies and processes promote equality. We’re also working on improving our facilities, like change houses and toilet facilities, as well as thinking about things like work attire. Instead of just having one-piece overalls, we now have two-piece overalls for women working underground so it’s easier for them to use the lavatory. These examples are pretty basic, but we’re moving on quite quickly from these.
For the benefit of all employees, we’re trying to modernise our workplaces. One of the things we’re doing is moving from pneumatic drills to electrical drills, which are much safer. In fact, we’re in the process of automating all our drills. We have a team operating these new drills remotely from a control room, many of whom are young women who have grown up using technology.
On the other side of the coin, when you automate and you digitise, you need fewer people. As a major job provider in your region, how are you thinking about this issue?
For quite some time, I believed that just because we could automate certain processes, it didn’t mean we should — because it could reduce job opportunities. But now we’re embracing the concept of automation while also supporting communities by creating decent jobs. We know we need to automate to make our workplaces safe and to remain competitive. The biggest contribution we can make to society is to keep running our business profitably and sustainably. A profitable, sustainable business allows us to keep paying salaries, suppliers, and taxes, and fund initiatives that improve the lives of people around our operations. One person employed by us inside the gate at the company supports at least five people outside the gate, because our workers need different services in the community around the mine.
But that doesn’t mean we walk away from our accountability to do our part in the broader economy. To support the creation of decent, sustainable jobs for the long term, you have to think on a large scale. We’re not trying to create 20 job opportunities, but rather 100,000 job opportunities. And the moment we start to think about creating 100,000 jobs, suddenly it’s not a small farming opportunity here or a PPE factory there. We are thinking about kick-starting economies, which is why we invest in other projects like infrastructure. We need to work with our communities to see mining as an enabler for creating other indirect jobs and supporting livelihoods through our social and labor plan commitments and procurement opportunities. That’s why we invest in schools and in local industries.
Has the pandemic accelerated your approach to digitalisation?
With people not able to go to sites, we’re doing site visits digitally. We’ve done all of our audits in the last year digitally. In addition, our ability to automate has improved our operating model and organisational design. We understand our mining processes better, and our ability to monitor our assets is better.
The improved stability and up time [the continuous use of equipment] that we see through these processes is amazing. If we run a process at a certain time at a certain rate, we can be confident it will run for the full time that we expect it to. This leads to more stable operations. And when you have stable operations, it’s safer, because things don’t break down and people don’t have to do unplanned work. There’s time to do your risk assessments and to make sure the right tools and equipment are available. Digitalisation is directly related to safety, cost, and efficiency.
I’ll give you an example. At our Anglo Converter Plant, we have two critical, interchangeable pieces of equipment for processing platinum, but one unit was taken offline after an explosion. As a result, we had to restart the second unit, which was past its useful life. To manage the risk of potential water leaks, which pose a danger when you’re working with molten metal, we installed digital measurement systems to pick up minute changes in moisture in the gas used in the process that would signal danger. The ability to do this allowed us to run a high-risk asset safely. If we had not managed to do that, the impact could have been enormous. We process more than 55% of the world’s platinum group metals [PGMs]. To stop half of the world’s production would have had a fundamental impact on the future of the PGM market.
In terms of the future of the industry, how are you thinking about your organisation’s impact on the natural environment? What is the role of innovation?
We’ve been working on technologies that have allowed us to reduce our water and energy consumption for five years, and that’s a short time in the bigger scheme of things. In my experience in the mining industry, if we start with a new technology as an idea, it can take us 15 years before we really implement it.
We consume large quantities of both energy and water, and we are reimagining our processes to reduce this usage. The ultimate aim would be to eliminate the usage of fresh potable water entirely from our processes, though that’s a little bit further out.
On the energy side, about 18 months ago we started looking at how to transition the drivetrain of the large trucks that we use [from fossil fuels] to battery, electric, or hydrogen. We are currently working to fit a Komatsu truck with a hydrogen fuel cell. It’s a 300-ton truck. Our goal is to eventually convert our entire fleet to hydrogen trucks. The development of an active hydrogen drivetrain for a truck that sise is quite unique. Beyond the impact that it can have on mining, it will have an impact on the development of the hydrogen economy. Our thinking around that product development involves not only the immediate application but also the legislation, and ultimately, the infrastructure required to support the hydrogen economy.
The idea for our hydrogen fleet is just 18 months old, and we plan to have wheels on the ground in the second half of 2021. Normally, it would have taken us much, much longer.
You’ve set a target of reducing emissions by 30% by 2030 and of being carbon neutral by 2040. What are the biggest challenges you face in meeting these goals?
The biggest constraint for us is our reliance on Eskom [South Africa’s electric utility], which still relies heavily on coal-fired power stations. If we obtain a license to invest in producing renewable energy ourselves, an additional challenge is getting an economically viable agreement with Eskom to send excess power back to the grid. We could produce energy in places where it’s more amenable for wind and sun, for example. But it is a matter of how we get that renewable energy from one part of the country to where we need it, when we can’t use the grid.
Beyond carbon reduction, can you tell us more about your social support for local communities?
Normally, we have water programmes in the communities in which we operate. Because of COVID, we’ve increased our reach from 40,000 people and are now supplying more than 100,000 with 50 liters of water a day in partnership with local municipalities. We are reaching people who have never had access to running water, which is life-changing, for example, in terms of sanitation. We’re doing that in two ways. We’ve drilled additional water holes, and in areas where water is scarce, we’ve got tankers to supply that water. We’re also actively involved with government and other mining companies in a project to expand bulk water supply in Limpopo [a South African province that borders Botswana, Zimbabwe, and Mozambique], which will create jobs and allow improved water supply to communities.
The way I think about it is, we have a responsibility to mine the mineral resources entrusted to us in a way that maximises the benefits to stakeholders and minimises the impact on the environment and host communities. We know that the mineral resources don’t belong to us; they belong to the people of the country. And then we have our shareholders’ money, which they entrust us with for returns. And then we have the employees who work with us. We have a responsibility to all those stakeholders.
Which brings us back to your purpose as a company: reimagining mining to improve people’s lives.
Our efforts are very much driven by our purpose and values. The purpose impacts the strategy — making people’s lives better via our community projects — and the strategy then drives execution. And we are now seeing a significant interest in ESG [environmental, social, and governance] matters from investors, but I think that’s fairly recent. Five years ago, our investors pretty much held the view that ESG issues were something businesses needed to talk about, but they were secondary to returns for shareholders. That is changing very quickly. You can see the pressure from investors on any energy call, for instance.
Other stakeholders are also becoming more active. Our Unki mine in Zimbabwe was recently assessed against the standards set by the Initiative for Responsible Mining Assurance [IRMA], which is a group designed and driven by customers. Our aim is to have all our operations accredited by IRMA by 2025. Customers like Tiffany’s, for example, are prepared to buy from us at a premium because that would mean they can put a stamp on a piece of jewelry and say, yes, it’s responsibly sourced. That’s something that is very important to us.
Michal Kotzé is the clients and markets leader for PwC Africa. Based in Johannesburg, he is a partner with PwC South Africa.
Deborah Unger is a senior editor with strategy+business.
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