David McKay spoke to Amplats CEO Natascha Viljoen about positioning the miner in an environment changed by Covid-19.
Natascha Viljoen, CEO of Anglo American Platinum
What makes a person want to be a CEO? “One reason is that there is a huge opportunity to have an impact,” says Natascha Viljoen, CEO of Anglo American Platinum (Amplats) since April. There’s also a tacit “trust in your own ability”, she adds.
It’s a question worth asking because most people might have been hemming and hawing given the introduction Viljoen has had. She hadn’t even taken her seat when a full-blown crisis ballooned. That was in February when the firm’s processing facilities in Rustenburg, finely-tuned technology that turns concentrate into refined metal, exploded. The back-up unit also failed.
The outcome was a one-fifth cut to 2020 platinum group metals (PGM) production – about 900 000 ounces. Amplats’ financial year was barely eight weeks old, and yet full-year earnings before interest, tax, depreciation and amortisation (ebitda) were forecast to be a hefty R18bn lower (although expect that number to be modified in the coming weeks).
Meanwhile, in a Chinese city far, far a way, a virus had broken out from which none were exempt. On the same day Amplats was warning investors that the dividend riches of the previous year might not be repeated in 2020, the most un-newsworthy of countries – Luxembourg – reported its first case of Covid-19 disease, caused by the coronavirus.
Several months on, Viljoen reflects that Covid-19 might be both catastrophe and a massive opportunity to get to know Amplats. “I knew it from outside in,” she says – a reference to her previous position as head of processing for Anglo American, the UK-listed group that owns 80% of Amplats. “Now, I got to know it inside out.” Meetings with some 200 senior staffers took place in the first two months.
Since then, the first of the damaged processing units has been fixed while the second is to be repaired before the end of 2020 – some three months earlier than planned. That means the financial impact of the blow-out will be reduced, especially as the Covid-19 pandemic hasn’t been an end-to-end disaster for the PGM market. Prices for palladium, used in autocatalysts to filter out noxious gases from cars, and rhodium have been okay, and excellent in rand terms. Given the present emergency, it’s only natural to think in bite-size terms. Yet, one wonders the kind of medium- to long-term impact Viljoen wants to have at Amplats: what does she bring to the party?
Mark Cutifani, CEO of Anglo American, told finweek
Viljoen has the technical ability, a quite obvious requirement. Her predecessor, Chris Griffith, was a mining engineer. Viljoen is a metallurgist. But she also brings valuable experience from previous employer Lonmin, where she had oversight of sustainability. Sustainability is something of a broad church of concerns these days. In essence, being sustainable has come to embrace both environmentally-mindful practices as well as the habits, standards and qualities that give a mining company social legitimacy. Those qualities have been amplified by Covid-19 which, in presenting a common, unifying threat, has thrown the spotlight on the full spectrum of social inequality. For example, it’s impossible to separate the fortunes of employees from their communities.
“It is all about our employees and our communities. Are we on the beginning of the journey? Probably we’re a bit further on than that, but there is recognition that we need to step up in that area.”
Viljoen might know more than most about the interplay of employees and communities, and specifically of the dangers in mining companies treating both as silos. In August 2012, Viljoen was Lonmin’s head of sustainability when the Marikana atrocity took place: an event in which security services shot dead34 protesting mine workers and injured 78 others at Lonmin’s Marikana mine near Rustenburg.
“Marikana could probably have happened in many places in the mining industry,” says Viljoen. “It did happen at Lonmin for various reasons; it’s a boiling over of a society that’s frustrated with their current circumstances.”
At the time of writing, South Africa had just registered its third successive quarter of negative economic growth. Although many of the lockdown measures have been relaxed, the country is barely yet in the foothills of recovery. The risk that social discontent could surge is, therefore, a significant one.
Cutifani acknowledges it. Marikana was a moment in time, but he also warned: “ ... we haven’t removed the issue that created Marikana and I’m talking about poverty and inequality (in SA). So I’m still worried, but I also hope we’re all a lot wiser: government, unions and businesses, and we’ll talk and we’ll all try to make sure we don’t have that again.”
Says Viljoen: “I think that the economic recovery in our communities is going to be tough and we are certainly preparing ourselves for a high level of unhappiness in our communities that could show itself in many ways. It could show itself in protests, we could see that in increasing violence, we already see that to a large extent in the increase of gender-based violence, because there’s an underlying frustration with many of our community members.
“Are we going to see something like Marikana? I honestly hope we don’t go there again. I trust that we’ve learnt out of those processes and that we’ll keep that top of mind if we experience any kinds of similar upset conditions again.”
Interestingly, Viljoen thinks that the unions, including the Association of Mineworkers and Construction Union (Amcu), have played a constructive role sofar in the Covid-19 crisis, establishing what might be termed cautious partnership. Amcu’s role in the Marikana protest of 2012 has been long discussed, but in ensuring this year its members had court-sanctioned protocols to manage Covid-19 infection risks, it demonstrated rarely-seen collaboration with employers.
One of the other potential impacts of the pandemic has been to focus attention on environmental sustainability. Again, Amplats can play a role given the use of PGMs in autocatalysts and in the hydrogen economy where platinum could come into increased use in fuel cell technology. Platinum in traditional internal combustion engine technology has been supplanted by palladium.
Viljoen thinks Amplats will come to take a yet more prominent role in pushing the potential contribution of PGMs in the green economy. It’s a potential direction government is also keen to take. The latest paper on how the SA economy could be given fresh life, from the ANC’s Economic Transformation Committee, latches on to beneficiation linkages to which the manufacture of home fuel cell batteries could play a part. “Where I want to position us as a business is that we need to play in both areas,” says Viljoen of the need to supply a potentially burgeoning green economy while keeping Amplats rooted in its fundamental mining function from which an estimated 24 500 employees are sustained.
“The only way of doing that is to ensure that in setting up our business in the next couple of years we recognise important levers – whether it’s a green economy where we can play our role, or whether it’s driving the economy at all costs to make sure that we look after livelihoods as well as lives to make sure we can play our role.”