Mining…Killing for Profit?

July 22, 2009

The tragic accident, in which nine miners were killed, hangs like a shadow over an industry, which, for many reasons, has become less and less competitive over the years, an industry that can now only be described as an industry in crisis. The sad part is that, before any investigations were done the fingers were pointing and blame was apportioned, mostly to management and owners. In reality, the South African culture of risk-taking and the low value placed on life by sectors of the population are, with the inherent risk of mining, the main causes of fatalities in SA mines. To suggest mine owners “Kill for Profit” is ridiculous and a reflection the intelligence of those prescribing to the idea.

 Apportioning Blame

Solidarity was quick to point to the poor safety performance of the South African mining industry in comparison to mine safety performance in developed countries such as Australia, Canada and the USA. Such comparisons do show that mining in South Africa is eighteen times more likely to kill you than it is in Australia. It also shows that we are ten times more likely to be killed on the road, driving to the killer mine, than in Australia. However, the likelihood that you will be murdered before you get into your car is 60 times higher than it would be in Australia. It is ironic that we measure mining bosses against the highest safety standards in the world but we are quite happy to compare our road safety and crime with against the worst standards. It is quite in order for Ministers, Government Officials and others responsible for Transport, Road Safety, Safety and Security and Health facilities to be compared against lower standards

Why are we surprised when we hear about another mine death?  How does the owner’s desire to profit from mining contribute to the death of the risk takers in underground ‘’accidents’’?  How will the call for imprisonment of owners and/or management prevent accidents caused by people with such attitude to safety and risk?

What is surprising in all of this is the denial of any responsibility and accountability, for any accident or injury of any kind, by workers representatives, in particular the NUM. We never hear of the union member who took a shortcut thus putting his colleague in danger. The recent hostage drama orchestrated and executed by reckless Union members, placing lives in danger, yet exonerated by NUM is a prime example of poor attitude. Media reporting of fatal injuries in mines has become emotional and sensational thus making reasoning around mine safety issues emotional and not analytical.

Because of these relentless attacks on management and mine owners, we have reached a situation where the call by unions, for draconian measures such as exorbitant fines and imprisonment, are actually considered by the Minister. When gross and deliberate negligence exists, any reasonable person will accept the suggestion of drastic measures against anyone found to be negligent. This rule should however, not only apply to management and owners, but also to workers who cause injury or death. Perhaps a worker killed as result of his own risk taking and negligence, should forfeit any insurance payouts to his family. A draconian measure? Most certainly, but so is putting someone in jail because someone died on a mine for which he is responsible because of the negligence of another. As it is, mine owners have taken drastic measures against senior executives in response to poor safety performance. Unions on the other hand, will fight the sanctions against their negligent and reckless members with everything in their power.

Mining is Risky

What is largely being ignored in the media and in the public domain is the simple fact that Mining is inherently risky. Deep level labour-intensive mining as practiced in South Africa is particularly hazardous and the best way to make these places perfectly safe is to stay the hell out of there and opt for subsistence farming. The main risk attributing factors are the physical operating environment, which include geological features, geophysical and geothermal factors. Other, often more critical and manageable, factors include skill, culture and behaviour of employees (including management, supervisors and workers) and finally engineering factors such as machines, chemicals and tools.

Certain pursuits are inherently more dangerous than others, an undeniable truth, to expect mines to be comparable to a bank, as a place of work, is absurd. To expect police work to be free of risk to life is equally absurd and people accept it as such.

The impact of people factors, experience, training and culture, on our poor safety performance, are largely ignored and are therefore not adequately addressed. The reasons why these issues are seldom highlighted are legion. Suffice to know, due to affirmative action, global skills demand in the resource sector, coupled with poor education and sub-standard training; we have a dire shortage of technical skills at all levels. Given the inexperience of supervisors and managers, we should consider ourselves lucky that we do not kill more people in our mines. The South African mining industry operates in one of the most challenging mining environments in the world and does so with a poorly equipped human resource pool. Even China, with their atrocious mine safety record; operate their mines utilising a higher worker skill base.

Risk Takers

South Africans have a death wish and no respect for life. We see it in everyday life. Driving from Pretoria to Rustenburg, a while ago I noticed, at an informal settlement, the concrete fence separating it from the N4 to safeguard and prevent inhabitants from making dangerous road crossings. Despite the erection of four pedestrian bridges, the inhabitants have chosen to break the, very substantial, fences and now cross the busy highway in the face oncoming traffic. Most of the people living in Majakaneng are employed by the surrounding mines and the person employed by a mine in the area is, most likely, the person that makes the hole in the fence and takes the risk to make the dangerous and illegal crossing of the road.  I cannot think of any reason why this risk taker will change his behavior when he goes underground to work.

High-risk behaviour of South Africans is inexcusable. People doing this, can only be stupid and lazy.  The second reason could be that there is a lot of truth in the perception, that South Africans have a “life is cheap”-culture.  A third reason is a culture of risk taking that can be linked to the “life is cheap” culture.  We see this behavior in many aspects of the daily life of South Africans.  It is evident in the way they use the roads, the risks taken when people make illegal electrical connections to the power grid. We see it in schools where violence is the order of the day with children attacking each other with the intent to kill and the popular “Train surfing” in the township, which is a dangerous equivalent of Russian roulette. Many South Africans do not value life and they show scant respect for their lives and the lives of others.

We see risk taking and a total disregard for life beyond the workplace and the roads. Only in South Africa do people, diagnosed with Multi-drug Resistant TB (XDR-TB), escape from hospital to go home and effectively deliver a death sentence to family and friends. Only in South Africa do they pass HIV/Aids on with gay abandon. Only in South Africa do witchdoctors kill hundreds of teenage boys in traditional initiation rituals.

 The Way Forward

The South African mining industry spends more money than any other South African industry on training and education. It is in training and education where government and labour can contribute greatly to the reduction of risk to life and limb in mines by becoming party to genuine training initiatives put in place by the mining companies. It is however important that their participation are based on genuine desire and not political agendas and ideology of a few individuals. The role of government should be one of coordination and legislation whilst labour should assist in pressurising the freeing up of funds tied up in ineffective Setas and assist management in setting up workable and effective training programs after effective and valid analysis of industry needs. Establishing proper training will add more to mine safety than astronomical fines and criminal charges.

To continue to blame mine deaths on an owner/management drive for profit is mischievous and counter productive. It impacts negatively on the problem and efforts to improve the situation. The current approach of apportioning blame, by the unions and the DME, are counter-productive. Mine owners, for many years, have been monitoring the cost of accidents.  They have concluded long ago that the cost of accidents erodes profit and impacts negatively on the image of mining as an investment option.


An(c) Economy of Lies

July 21, 2009

             

ANC party secretary-general Gwede Mantashe yesterday announced that the ANC national executive committee, which met at the weekend, has decided to refer the nationalisation debate to its economic transformation committee, which will then develop the party’s position on the matter.

 In three weeks, we saw this unfolding drama develop from a position of “No nationalisation of Mines to the current position.

Malema, at an ANC Youth League conference three weeks ago, called for the nationalisation of mines, invoking the requirements of the “Freedom Charter”. He was quickly backed by Vavi, Cosatu, Vavi and the SACP.

Gwede Mantashe, in his capacity as Secretary General of the ANC reacted, saying that; “Nationalisation of the Mines are not on the ANC agenda”. Susan Shabangu said a few days later that state owned mines are a possibility.

The youth league reiterates its demand for Nationalisation, again backed by Vavi and Cosatu.

Gwede Mantashe in his real skin as President of the SACP makes another one of his famous U-Turns and agrees to that Nationalisation should be considered. At the same time, Duarte tells the media that the ANC will have a national debate, one of those things we hear about but never participate.

Susan Shabangu, to confuse the market, says Nationalisation will not happen, whilst Zuma agrees with the idea of a “National debate”. On Sunday, ANC policy academic and MP, Professor Ben Turok assured all Sunday Times readers that there is no possibility of nationalisation of mines.

I am sure, as with the replacement of Mboweni with hard line Communist Gill Marcus, many commentators will call this a positive development. The only possible positive spin-off will be the closure of mining companies filled with BEE leeches and no economic right to exist

Does anybody know who is in charge? This is a very strange development in the light of the President’ Assurance that the country is not governed by trade unions. To me it seems the tail wags the dog, or is this “Rule by Confusion and Lies”.

Two weeks ago, that great proponent of truth from ANC ranks, Carl Niehaus referred to the science of lying as perfected by politicians the world over, a science in which our ANC and government do exceedingly well and can justly claim world leadership. Honest Carl proudly told us he never told lies as spokesperson for the ANC, he just used the “Science of Spin”. Was Carl perhaps “spinning a yarn?” I, for one, do not see the difference in blatant lies and spin. What I do know for certain, is that the ANC and its partners and therefore the government of the day is particularly adept at lying. Lenin’s doctrine, which is not out of place for an organisation with a strong communist influence, like the ANC, teaches; “Lies told of enough becomes the truth”. In the face of this double-speak a fitting and well-applied principle of Mr. Lenin’s teachings.

As for the owners and investors, they will not go the marginal mines; they are after the rich ones. For those who expect fair compensation, dream on, there is no money to compensate you for your investment. What will the owners and investors do? They will quietly move their money out and minimise risk.


The Commies are in Town

July 20, 2009

Two weeks ago, that great proponent of truth from ANC ranks, Carl Niehaus referred to the science of lying as perfected by politicians the world over, a science in which our ANC and government do exceedingly well and can justly claim world leadership. Honest Carl proudly told us he never told lies as spokesperson for the ANC, he just used the “Science of Spin”. Was Carl perhaps “spinning a yarn?” I, for one, do not see the difference in blatant lies and spin. What I do know for certain, is that the ANC and its partners and therefore the government of the day is particularly adept at lying. Lenin’s doctrine, which is not out of place for an organisation with a strong communist influence, like the ANC, teaches; “Lies told of enough becomes the truth”. A very appropriate and well-applied principle of Mr. Lenin.

This weekend saw the ANC using their consummate skill at lying, sorry… “Spin”, when they announced the replacement of Tito Mboweni and used all their collective propagandists to whitewash the mine nationalisation issue. Much was made by The President of Marcus’ previous spell with the bank and her competence. The prominence around the announcement was noticeable, and in it’s visibility, it was probably only exceeded by the announcement of the Zuma cabinet. The announcement was hardly cold and before the praise singers from COSATU and the SACP, strong critics of previous economic policy and monetary policy, were out in force dancing with joy.

The appointment of Gill Marcus and the continuing discussions around the nationalisation of mines is cause for concern. Marcus, being a high-ranking member of the SACP, will unlike Tito Mboweni, toe the party line and enforce the will of the left. The announcement of Mboweni’s sudden unavailability is, to be frank, suspicious and reeks of an engineered exit

Someone once told me that when looking at issues you should look through the bush and not at the bush. The latest incarnation of the South African economy being created by the Zuma regime is looking more and more like a monster with the potential to destroy everything that’s been built up through many years. What is alarming is the inability or unwillingness of commentators, economists and so-called experts to look through the bush. Well known, and often quoted, economist Dawie Roodt, on the appointment of Gill Marcus, said economic policy, and monetary policy in particular, is established and stable and not that simple to change. To Mr.Roodt, I have this to say; “Have a look at that hero of the remnants of Communist ideology the world over, Hugo Chavez, and tell me it is not simple to change economic policy”.

At the same time, the weekend newspapers published letters and columns by prominent ANC spokespersons and policy makers placating the market and calming the waves created by the “Nationalisation Debate” and the Presidents thundering silence on the issue, keeping in mind the President is a communist taught at the knee of staunch Stalinist Harry Gwala. In this regard, the letter by presidential spokesperson Vincent Magwenya tried to excuse the lack of a clear stance by the President referring to his support for a public debate, the President’s and ANC’s favourite cop-out. At the same time, Professor Ben Turok, who is nothing more than a starry-eyed academic, tried to convince us that nationalization can and will not happen.

Examining the facts, looking through the bush, so to speak, we see a different picture. The ANC leftwing set out to destroy the Scorpions, a mission accomplished. They have set out to change the management at the SABC, another target achieved in double-quick time. They launched a campaign against Trevor Manuel’s independence and now have him working under the close supervision and control of Collins Chabane, a Zuma faithful. Tito Mboweni, a particular thorn in the side of the left, neatly removed and replaced by one of their own. The reform of the judiciary has been targeted, the process to change, in the name of transformation, is well advanced under the guidance of another high-ranking Communist, Jeff Radebe.

What lies ahead? On nationalisation, a strong call from the left, by mouths of the Youth league, COSATU and The SACP, resulted in Gwede Mantashe, Secretary General of the ANC, stating emphatically that nationalisation is not on the ANC agenda. Soon afterwards, Gwede Mantashe, President of The SACP came out in strong support of the nationalization lobby, The Minister after telling the SABC that nationalization is in line with the freedom charter, later the week said nationalization is not on the cards. Whilst Shebang was placating the market, Jesse Duarte announced a national debate on the issue.

The next critical issue that will face us is destruction of the provincial tier of government, a critical step needed to eradicate the “counter-revolutionary” enemies and centralise power in Luthuli House. On the cards, is legislation that will have University Vice-Chancellors reporting to Blade Nzimandi, to expedite “Dumbing Down” and lowering of standards.  

The level of lies and deceit we are experiencing is concerning but not surprising given the morality of our politicians. The complicity of people who should inform us of the underlying threats facing us is scary. I wonder why many economists, employed by banks and other institutions, support the threats to a fee economy, through their silence, Could it be that their greed for short-term benefits exceeds the need for long-term economic prosperity and freedom. Perhaps they have seen the writing on the wall and are buying time, to move their assets. Sol Kerzner did set the example of how to play the positive role whilst moving his millions offshore in the mid-nineties.


Victory to the Anarchists

July 15, 2009

What a glorious feeling to wake up to the announcement that the construction industry strike has ended. In such things, there are always clear winners and losers with this case not being an exception. The clear winners at the end of this frustrating and irritating episode is the union leaders, who clearly got their intended result, so much so that they have been able to convince or coerce management to have a signing ceremony for the sole reason of publicly celebrating their victory whilst rubbing the noses of management in it. At the ceremony, the parties will no doubt, declare that it was a win-win solution. The truth being that any wins, except for the union leaders’ victory, are short term and only insofar as the 2010 Soccer Stadiums are concerned.

Once again, the unions achieved victory through anarchy and intimidation. What was especially noticeable, and it has been that way since the election, is a new sense of militancy given to the union by Jacob Zuma, a fact acknowledged by well-known and former activist, Charles Nupen who, in a fatalistic manner, excused the situation as something we should get used to as “normal”.

The losers in this sad tale are many. The first and foremost loser is South Africa, a country was held to ransom by a small number of arrogant anarchists with a narrow and selfish agenda to exercise their power and enforce their will. It showed the word a country where anarchy and militancy holds sway, a place investors should avoid.

The “poor” workers lost. However, for them I do not feel sorry. They deserve what is coming to them. They, mostly having a low level of skill, and would in any other place be easily replacable, were prepared to forfeit at least R 600 in wages because of the strike, in order to gain an additional R 30 per month. Certainly not the type of action I will attribute to a lucid and logical person. It makes me wonder whether it is hunger pangs dulling their brains, plain laziness or that unique South African sense of entitlement. The pain exceeds the gain in this case. The mere fact that some people tried to work indicated that there are people who need the money and are prepared to work for what management offered. These people, who wanted to work, unfortunately did not only loose income, they were also humiliated and stripped of their dignity when they were intimidated and beaten up by the anarchists because they wanted to exercise their right to work, for them I feel sorry.

The construction companies also employ highly skilled staff. People who generally understand the effect of wage increases on the long-term viability and profitability of the company. They did not strike and probably never will strike. They, in most cases, have accepted lower increases. The loyal, once again, will subsidise the stupid and the lazy in the organisation. How long can this loyalty last I wonder? I doubt whether they will want to carry on wearing the loser tag.

The ten million unemployed workers who cannot find work because unions are keeping wages unreasonably high will be weeping in desperation when they hear about the signing ceremony, where the union will celebrate the victory of the artificially protected employed and the demise of opportunities for the unemployed. The unemployed and hungry will weep at the plates of food consumed by the victors, at the signing ceremony. These desperate people are the losers.

Management, of the construction companies, won a short- term reprieve to complete their stadiums on time but in the long term, has shown their vulnerability to the “blackmailers” and “hostage takers”. When the high-margin government sponsored world-cup projects are completed will have to compete for lower margin projects. This will become increasingly difficult given the ever-decreasing labour efficiency of an overpaid and low-skilled, but politically powerful workforce. Already they are losing contracts abroad. Although they are losers, I have no sympathy with them. They are the cowards Trevor Manuel referred to recently and they deserve what is coming their way.

Also, spare a thought for the investor, not all of them wealthy. People like you and me, who have our retirement funds invested in these companies. Spare a thought for the small construction companies, who often sub-contract to the big players. Their profit margins are smaller and they are often coerced by the big players to accept conditions they can hardly afford. Some of them will go out of business once the world cup projects are completed and the ranks of the unemployed will swell once again.

The general population, the ordinary citizen is another big loser. The victory of NUM will exacerbate the wave of strikes and anarchy we have to endure, teachers, doctors, emergency workers, health workers and transport workers will all take heart from the glorious, well-published and much celebrated victory of NUM.  I am sure we will soon have a national day of celebration, a festival where we will celebrate the power and glory of the “Union Leader” your friend in need, if your subs are paid. In the mean time, we will pay for damage done to property and services not delivered. We will clean-up after them when these proud South Africans march and destroy.

How do we rectify the situation? Government must take a stance against the anarchists. They must stop talking and refrain from passing their monkey to business. Avoiding confrontation with the monster they created is a cop-out. I however doubt their ability to take strong action in the fear that it may result in diminishing popularity amongst, what they perceive to be a major support base.


Of Crocodiles and Mines

July 13, 2009

I am not sure whether I should be sad, bemused or angry. The hostage drama at the Crocodile River platinum mine near Brits has to stand out as another extreme act of sadomasochism by the “entitled proletariat” under the guise of the “poor oppressed worker”

To understand the issues and dynamics of the situation it helps to have a bit of a background of events leading up to the crisis. The existence of this mine in itself is a minor miracle, having changed hands five times since it came into existence in the mid eighties. The mine has been profitable for very short periods and only when the platinum group metals were at extremely and unsustainably high levels. Currently the mine is not profitable and are burning cash in the hope that the platinum price will pick up, the rand will weaken or hopefully both. Should this not materialise, the mine will probably close before the year-end. The  current situation will, most likely, expedite the eminent mine closure and resultant job losses at this company built on hope and prayers.

 During the checkered history of the company, few people made money. Those who made money can thank good timing, luck, greed and good marketing. Some who owned the mine during the years were able to sell their “asset of dubious value”, to often poorly informed, and over-optimistic investors, “high” on platinum price euphoria. The current owners represent a considerable number of ill-informed Canadians since the company is registered in Canada with its trading in Toronto and Johannesburg. This can be interpreted as a subtle warning to the few stupid investors out there who, despite the Fraser report, are still investing into South African mining projects.

In order to keep the mine going, management I believe, took a number of actions to preserve cash thus prolonging mine life in the hope that the platinum price will recover. The objective of these actions is to recover losses and to make profit. As a result, people remain employed and suppliers are paid. Actions taken, I believe, included the reduction of development, necessary to open ore reserves for longer-term sustainability, the removal of the mining contractor responsible for operations and taking over the work force from the contractor, thus removing waste from the value chain.

 It is the ex-contractor workers who now hold people hostage demanding permanent employment on a mine making a loss but with the clear intent to keep them employed as long as humanly possible.

These “entitled” elements in our society are intent on biting the hand that feeds them. They are quite prepared to go and lie at home and breed once they have destroyed the business. Unfortunately, this action is the result of a strike culture that permeates South African society. A culture perpetuated by unions in their power struggle against the market economy. The union of course, denies that their members are holding hostages. Anyone believing this assertion is incredibly naïve taking into account that the union involved is  the National Union of Mineworkers, the same lot that is holding the country hostage with the 2010 soccer stadium gun against our heads.

It is ironic, were these poor hostage holding strikers stuck underground because of a power failure or other technical reason, the union and the DME would have been extremely critical of about management’s disregard for miners’ safety. It must be understood, dangerous situations in mine can only be created by management. The “experienced, intelligent and highly perceptive worker” will never expose himself to danger

With the Pamodzi case still fresh in our minds the astute thing is for Crocodile River Management to cut their losses, stop the bleeding and get the hell out of there. One just wonders how many companies must be closed down by irresponsible unions and their members before sanity will prevail.

 There are few winners here. The investors, with few lucky exceptions, will lose their money, the employees will lose their jobs, the strikers and hostage takers deservedly so and suppliers will have to write off what is owed to them.  The BEE partners, who obtained their stake in the company at a discount, may not loose and probably already took their profits at the expense of workers and real investors. The Union will be walking away, smiling and flexing their collective muscles after another “well-deserved” victory for the left and a body blow for sanity.


Mining Mechanisation – Ten Years On

July 13, 2009

Ten years ago saw the successful introduction of a low profile electro-hydraulic mechanised drill rig, Sandvik’s Axera LP Drill, specifically designed for application in South African narrow reef hard rock mining. This completed the process of mechanising chrome mining in South Africa’s Bushveld complex, a programme that started in 1985 with the introduction of the first Load Haul Dumpers on chrome mines in Rustenburg. The Axera LP Drill became one of the most commercially successful machines introduced in the South African mining industry.

By 2005, South Africans chrome mines were producing 70% of total ore output of 700k tons per month, utilising machines. Technically this revolution, after previous unsuccessful attempts at mechanisation was spectacular and had a major impact on the successful implementation of mechanised mining in the platinum industry, so much so, that the total tonnage derived from mechanised mining in platinum mines has grown from zero in 1990 to 1.5 million tons per month by 2008. Production costs of mechanised chrome ore have become very competitive and it is now the preferred production method, it is no coincidence that the some of the cheapest platinum producers, Aquarius and Mototolo, are also mechanised. Add to the benefits mentioned the favourable safety impact of mechanised mining and the choice seems very obvious and straightforward and the visionaries who single-mindedly promoted and implemented mechanisation may be forgiven for feeling smug when looking at their achievements.

Taking a more holistic and detached view of the unfolding process, it is easy to question the astuteness with which our heroes set about the task of replacing men with machines in South African mines. With the current, unacceptably high levels of unemployment in the country, the wisdom of mechanisation in mines must be considered along other socio-economic factors that drive employment, wealth creation and other factors creating value to society. Mining, along with agriculture and manufacturing remains one of the biggest employers in South Africa and anything that has a negative effect on employment opportunities will, quite rightly, be questioned. Fortunately, the visionaries responsible for mechanisation do not have to feel alone in their guilt, government policy and trade unions did more than their fair share of job destruction and contributed more to the destruction of jobs. Unfortunately they wrap their contribution in righteous packages, wrapped up as “Rights of the oppressed and exploited worker” and “Transformation of an unfair society”, giving them the moral right to destroy jobs.

In most normal market driven economies, the move from man to machine follows a set route. The typical road map starts with an oversupply of labour, manually producing products of value. As production increases, unemployment drops, wages goes up resulting in thinner margins and the search for more efficient production methods, inevitably machines. Skills improve to suit the machines and the cycle repeats. In the case of socially engineered economies, especially the less sophisticated ones like South Africa, machines can enter the production process for very different, and often wrong, reasons.

The politically correct motivation for machanisation of South African mines has been improved safety, decent jobs, up-skilling of employees improved salaries the loss of traditional skills because of HIV/Aids and the low-esteem in which the mining industry is held, globally and especially in South Africa, as an employer. I often think people consider mining as a small step ahead of the noble pursuit of sewer engineering. Truth however is, despite the negative perceptions of mining, perpetuated by the ANC Alliance, and their obsession with so called “decent and meaningful” jobs, millions are still prepared to work in mines for market driven wages, a view reinforced by the recent exposure of the extent of illegal mining activities in defunct mines.

It is however not a coincidence that the mechanisation  initiatives in the South African mining industry coincided with the liberalisation of labour law and the rise of black trade unionism on the mines. That chrome mines, despite their relatively low profitability, became leaders in mechanisation is also no coincidence. Chrome mines were always beset by highly volatile markets and wildly oscillating price curves, with the commensurate fluctuation of labour requirements. They recognised the potential opportunity proffered by mechanisation to effectively counter the potential crippling cost of retrenchments and disruption associated with it. Power of machines meant less power to radical unions. Higher skilled people not only meant higher pay, but also higher productivity and less hidden cost associated with a large lowly skilled but powerful workforce. The combination of out-of-control input cost, driven largely by the labour component, unreliable output levels and the physical threat to life and property, posed by militant and highly politicised trade unions, made for a compelling argument in favour of mechanised operations.

Government policy and trade unions must accept a large proportion of causal blame for this economic anomaly. By turning an industry, which should be the backbone of our economy, into a pariah industry, stigmatising it as an “enemy of the people” on par with the apartheid regime and the National party, was irresponsible and devoid of truth and reason, but possibly understandable. It is unforgivable for union leaders and people in government to persist with the perpetuation of that myth at this point of our history, thus continuing the fostering of distrust. To suggest that mining companies are singularly obsessed with the exploitation of workers borders on economic “hate-speech”. The single-minded objective to create a protected competition-free workplace at any cost cannot be tolerated any longer. As long as these “heroes of the poor”, with the active support of government, persists with this madness, jobs will be destroyed and poverty will increase.

It is estimated that the mechanisation of chrome and platinum mines resulted in the loss of at least five thousand conventional jobs in the last eight years. This loss in jobs could have been bigger, had it not been for the slow rate of skills development. The lack of adequate skills has been the single-most critical constraint in the rapid advance of low-profile mechanised mining.

In the mean time, initiatives to turn resources into profit will drive the innovators to find solutions. As things stand, the mechanisation of ultra low, flat dipping, ore-bodies are well advanced and requires skill development and fine tuning before it will inevitably, become the stoping method of choice in platinum mines. Continues Rock Cutting is far advanced and current unrealistic wage demands puts a smile on the faces of the pioneers of this groundbreaking, pardon the pun, technology.

To correct the situation whilst creating a competitive business environment a change in attitude by stakeholders are required. I am not advocating a free-for-all attitude bur rather a joint strategic approach focused on realistic market related wages and the best mining techniques, taking in consideration technical aspects, sound business principles and socioeconomic requirements.  To survive in a competitive world we need to be competitive and smart, face up and understand mistakes, and as stakeholders commit to elevating the South African mining industry to global leadership.


Application For Membership

July 10, 2009

                                                                                                            July 4, 2009

The President

Association of Mine Managers of South Africa

PO Box 61709
Marshalltown 2107

Dear Sir,

Application for Membership (Class – Ordinary)

I wish to apply to become a member of your esteemed organisation. There is however a number of issues I need to clarify. Your constitution clearly states the requirements for ordinary membership but there may be a few grey areas in my case. Let me explain.

I am manager of a mine in the Free State, Elands Mine, an operation you may be familiar with since we have been, like many other mining operations the world over and particularly in South Africa, on the receiving end of some negative and, may I say, unfair and unwarranted media attention. The media campaign against us because of an unfortunate, isolated incident of minor consequence resulting in the fire that killed a few unfortunate workers can only be described as a travesty and exceeded the norms of fair reportage. Truth be known, had it not been for the lack of cooperation from the so killed called, “formal mining sector“, this incident would never have occurred. Matter of fact, had it not been for this misguided action of a confused worker nobody outside our organisation would have known about the incidence. As a mining man, you would understand these things.

In support of my application, I have a Mine Managers Certificate of Competency, which I legally purchased when I was working on the Platinum mines in Rustenburg. A friend, employed at the DME’s office in Klerksdorp, will confirm it is kosher, should anyone decide to do checks.

There are currently about 1500 people employed in the operation, this number fluctuates since workers disappear in the “madala sites” from time to time, others just abscond, a cultural trait of my brethren that will never seize to amaze me, resulting in a need to recruit replacement which, as you well know is not so easy these days. Not with the lowly skilled and lazy riff-raff out there. It is also not possible to give you an accurate estimate of tonnage mined in the operation. We have learned that “grade is king” and we measure output in ounces only. I found that linking earnings to ounces, I get better performance and we do not need “hangers on”, such as surveyors and grade controllers.

I believe my experience can add substantially to the body of knowledge of your esteemed organisation. The nature of our operations necessitates unorthodox methods and entrepreneurial thinking, which can assist people like you and I to reverse the shrinking trend that besets our industry. The fact that we are successfully mining in areas, abandoned by the formal mining sector, proves beyond any doubt that we have a working model.

Areas of operations in which my knowledge can be of particular importance is training and multi-skilling of employees, most of our people are skilled in the entire value chain, from exploration to final product. We have people in our employ who specialise in logistics, a particularly daunting challenge if you consider workers live underground for extended periods, quite an achievement since we do not have the luxury of hoisting facilities as you know it. I always say, “We find, we mine and we process”.

Although we are not bound by DME rules and even though the Minister denies us our constitutional rights to make a living, we do take safety seriously. Excluding the unfortunate fire that resulted in the so-called, “Illegal Mining Disaster”, we have been doing very well in work place safety, with our safety record improving every year. Last year we had an estimated fifty fatalities and this year, excluding the fire deaths, we had only forty. The real improvement can be seen in the number of amputations reported. It came down from 150 last year to an estimated 90 this year. These numbers, I can assure you are correct. My son, who passed Mathematics Literacy at school, is the chief statistician for the company and he can teach you a lot about statistics.

I will also contribute my experience in the in safeguarding of investments against the likes of Jelly Tsotsi Malema, his Buti Malemela and Ballcrusher Vavi with their plans for a hostile takeover of the mining industry. We have established tried and tested defense systems against this type of hard-line guerilla tactics. Our people had training from the best in anti-insurgency and defensive warfare, which we adapted for underground conditions and include the use of grenades, anti-personnel mines, deadly gas, not to mention guns, that’s right, we are the reason the President can’t find his machine gun…we’ve got it. We do not use guns too often underground, only in close combat; ricochets can be dangerous in that environment, whilst poisonous gas, ingeniously used with the ventilation flow, is very effective.

Cynthia Carroll will vouch for us on this one, I recently advised her on defensive systems against the threat posed by that Swiss company with the funny name and Swiss Army Knives as main weapon for “hostile” mergers. We know how devious the Swiss can be. War after war they pretend to be on the fence just so they can lay there frostbitten hands on the gold. It will not surprise me in the least to find they swindled the poor Paul Kruger out of his gold, for all we know the Kruger Millions have been stashed in a UBS vault, in Zurich all the time, whilst treasure hunters are running all over the Mpumalanga countryside looking for gold . It is also quite conceivable that Paul Kruger set this up all those years ago to take revenge against Anglo, whose founding fathers, were in many quarters considered British agents and conspirators in the oppression of the “Boere”.  

I can tell you a lot more, but I’m sure you get the picture. I’m looking forward to the many opportunities, we will have to chew the fat, or shall I say chew the Crayfish, whilst drinking copious amounts of John X Merriman and Blue Label at those famously wild monthly meetings I heard about.

Yours in Safety

Sticksaait Chugumisa