Anglo American will not shirk tough choices for platinum, Carroll saysComment on this story
OUTGOING Anglo American chief executive Cynthia Carroll says the company will not shirk from “telling the tough choices” gleaned from a strategic review of its platinum business, the results of which will be announced early next year.
Speaking at the Gordon Institute of Business Science yesterday, Carroll said the review initiated in February this year would outline the creation of a “business with the right size and shape to compete successfully in the global market”.
This was in apparent reference to Anglo reshaping itself to deal with the impact on mining firms of protracted labour disputes, which culminated in violence and in some cases resulted in unprecedentedly high wage settlements by companies held at ransom by workers.
Stressing the importance of the mining sector, Carroll said that mining directly contributed 9.2 percent of South Africa’s gross domestic product (GDP) last year and helped to generate 18.7 percent of GDP.
Mining companies paid R25.8 billion in corporate tax and a further R5.5bn in royalties, while mining exports represented 38 percent of the total value of goods exported.
The mining sector directly employed more than 500 000 people in South Africa and was indirectly responsible for a further 840 000 jobs, while about 13 500 000 people were directly dependent on mining-generated jobs, Carroll said.
Last year, out of a total expenditure of R437bn by South African-based mining companies, 89 percent was spent in South Africa, she said.
Carroll also took a swipe at the regulatory uncertainty in the sector, saying that in making investments, mining firms had to be certain of the rules under which they would operate.
“They will not invest if there is a fear of arbitrary and unpredictable regulatory change. The regulatory debate in South Africa has been going on for a very long time and it is still not completely resolved.”
While the spectre of nationalisation has been laid to rest, “the need to guard against damaging regulatory changes remains”. Among these she singled out the proposal for a new resource rent tax as both unnecessary and unwise.
“A resource rent tax, added to all the other burdens on the industry, would make South Africa internationally uncompetitive,” she said.
While the historical, social and economic factors that had contributed to demands for better standards of living were understood, there was no justification for the violence perpetrated by protesting workers.
“We have to stand up, all of us, and say that violence and criminality are totally unacceptable and will not be tolerated by society.”
She reiterated the 10-point commitment plan she earlier outlined at the inaugural mining lekgotla in June, among which was beneficiation.
“Beneficiation has an important role to play, provided it is based on a sound business case and focuses on sectors in which South Africa can have a competitive advantage.”
South Africa had a world-class mining industry but it did not follow that the country was well-placed to compete in all the industries that made use of the minerals it mined, she said.