Good evening ladies and gentlemen, members of the media (our most important guests this evening), my Anglo American colleagues and our various support partners here tonight.
This event is a highlight for me for two reasons. Firstly, it signals the end of a long year and the beginning of the festive season. This means that many of you will also get the chance to breathe!
Secondly, it provides us with a fantastic opportunity to look back at the year gone by and reflect on some highlights for our company, the mining industry, and South Africa.
The expression “May you live in interesting times” bears significant meaning for the year that has gone by. The expression has contested origins. Many people have labelled it a Chinese proverb that signals a curse, while some Chinese scholars have refuted this.
This expression is typically said in three ways:
- May you live in interesting times.
- May you live in an interesting age.
- May you live in exciting times.
2018 has in many ways been an interesting time for South Africa, for Anglo American and the mining industry. Exactly a year ago at this event, I spoke about a uniquely powerful trait that South Africans have in abundance, and that is the determination to fight for a resolution.
I reflected on how, almost 25 years ago, South Africa found a resolution to Apartheid, one of the most intractable issues of the past century, with tact and determination. The positive developments in South Africa’s political landscape this past year have once again demonstrated this powerful trait. Faced with a political environment that was untenable in all respects, the country took a different turn and got back on its destined path: a path of good governance, progress and political stability.
On the regulatory front, South Africa finally cracked the nut with the revised Mining Charter. My colleagues and I are often asked what we think of the Charter and our response is pretty consistent: the Charter, while not perfect, is a remarkable improvement from the previous version of the document.
More substantively, we are deeply encouraged by how the Department of Mineral Resources (under the leadership of Minister Mantashe) handled the debate and negotiation of the document.
The success of the recent Investment Conference is evidence of what is possible when the right choices are made. Many of you would’ve heard us confirm that we expect to spend six billion dollars (or seventy-one billion rand) over the next five years on sustaining and extending the lives of our mining operations in South Africa.
A number of other companies also announced their investment commitments, and it was truly heart-warming to see the spirit of optimism and eagerness to move this country’s economy forward. More needs to be done of course, but I am sure we can all agree that we are in a much better place than we were a year ago.
The next hurdle for South Africa to jump is the resolution of the land debate in a manner that supports investment and inclusive growth.
This debate is an opportunity for us as a nation to demonstrate that we can once more rise above the understandably emotive feelings and find solutions that are inclusive and sustainable. South Africa’s drive for greater investment can be enhanced if government clearly articulates what “excellence” looks like on the land issue.
In other words: what does the end game look like in terms of diversifying land ownership and ensuring land productivity? Answering this question will help investors understand how their investments might be affected and how they can help South Africa achieve the desired outcome. Ultimately, the measure of success for land reform will be whether it improves the lives of millions of South Africans. I sincerely hope that all the voices in this debate will keep this—and the need to promote greater investment for economic growth—top of mind as we work to reach a resolution to this important issue.
As South Africa marks its 25th anniversary of freedom next year, it is my hope that this country will begin to more fully realise its untapped potential. The opportunities to make the 1994 “better life for all” dream a reality are innumerable, and mining is going to play an important role in doing this.
Having been here for over 100 years, Anglo American recognises that government will not achieve this alone. We have long been an active contributor to the country’s development and we will continue to do so going into the future. That is very much our role and how we do business at Anglo American – it is about partnership.
The development of South Africa will not happen absent of mining’s own growth. It is important for us to reflect on what mining’s future looks like, and this leads me to another point…
Mining in 2018 is an entirely different ball game to when I started my career forty years ago. Take productivity for example. In 1900, to produce 40kg of copper, we only had to extract 2 tonnes of rock. Today, as a result of declining grades, to produce the same 40kg of Copper, the amount of rock required has increased 16 times. Likewise, the amount of energy required has risen 16 times, and water consumption per unit of copper has doubled.
Beyond these obvious physical and technical challenges, mining’s social licence to operate—which refers to the extent to which our host communities, governments and society accept us—is under significant strain. Many of you are well-versed in the challenges that our mining communities face. These are exacerbated by the aptly named “three South African ills”—poverty, inequality and unemployment—which plague many of our mining communities.
The challenge for us is clear: mining today cannot be the same as yesterday. In fact, mining will require a different outlook altogether: a new way of doing things from mine pit to the homes of those who live in our host communities.
So, how are we going to do this?
One of the highlights this year—and before anyone gets ahead of themselves, it is not South Africa ranking higher than Australia in the ICC Test rankings back in May this year. Rather, it is the launch of our Purpose: our reason for being as a company. Our Purpose aims to answer the questions: “why does it matter that Anglo American is in this world?; what value do we add to society?; and what do we stand for as a business?”
Through extensive consultation inside and outside of the company, we landed on a phrase that absolutely reflects how Anglo American feels to me and the direction we are taking. And it inspires me each time I say it. Our Purpose is to re-imagine mining to improve people’s lives. “Re-imagining mining”—that sounds dramatic, you might say. But this is exactly what we are doing to envisage mining in the future.
We are thinking very differently about the physical processes of mining, processing and then across our entire value chain. Many of you would’ve heard us speak about FutureSmart Mining™. I’m sure you’ve heard our communication team speak about it ad nauseam to you.
Let me take this opportunity to reiterate a few things:
- FutureSmart Mining™ is not a new “shiny thing” we’re flogging;
- It is also not limited to a set of technology development initiatives that we want to brag about;
- Rather: it is about how we as a company are casting our eyes into the not-so-distant future and asking ourselves these questions:
Why do we exist in the world? What should our operations look like? What can we do differently for our host communities?
This is about step-change innovation – it is about our physical and societal footprint. FutureSmart Mining™ is our innovation-led approach to sustainable mining.
The technologies that we are developing and deploying to fundamentally change the way we extract, process and market our products will provide the next step-change in operating performance – creating significant safety improvements, and major energy, water and capital cost savings.
And our Sustainability Strategy will transform how our stakeholders experience Anglo American, from our environmental footprint to our collaborative approach to regional economic development. Yes, it includes plenty of technological and digital innovation, but we are looking at innovation in its fullest sense—including how we think about stakeholder engagement or ethical governance, for instance.
Many of you frequently report on our business in a variety of ways, from our engagements with government, communities, to our operational and financial performance (Some of this is sometimes laced with lots of rumour of course! But we forgive you nonetheless). I want to make something very clear tonight: for mining to have a place in South Africa, and indeed elsewhere in the world, we must be smarter, and more-cost-effective by using new (and existing) technologies and integrated thinking to materially improve how we operate.
This brings me to my next point, and this is how we, as a mining company with a colourful history in a country like South Africa, show up in the broader society. To enable our FutureSmart Mining™ journey, we will leverage our Sustainability Strategy, which I mentioned a few minutes ago.
The strategy is built around three global sustainability pillars: trusted corporate leader, thriving communities and healthy environment, with mutually reinforcing elements that together will positively transform how our stakeholders experience us. We are setting deliberately ambitious stretch goals, three goals for each of the three sustainability pillars, and each operating site will develop its own five-year plan relevant to the operation’s local context, priorities and opportunities.
For example:
- For thriving communities, our livelihood target is to create five jobs offsite for every job onsite in our operations by 2030; and to have three jobs offsite for every job onsite by 2025.
- And our education target is to have all schools in our host communities operating in the top 20% of the state schools in the countries in which we operate by 2030. We’re already doing this work in South Africa. Many of you would’ve heard about the Anglo American South Africa Education Programme, which we launched in April this year, which aims to achieve the best possible education outcomes in 100 schools and 100 early childhood centres surrounding our operations here in South Africa.
These goals will challenge our business to innovate and change, mobilising our people and resources to re-imagine mining – and mining communities – between now and 2030. With this in mind, I am going to be cheeky and say that we expect every front-page news story, radio bulletin, blog or tweet on Anglo American to be even more complementary between now and 2030 (and beyond)!
I hope I’ve sketched out some of what lies ahead for us as a company and industry as we gear ourselves for the future. South Africa, a country where a quarter of our assets are located, is going to play a key role in mining’s exciting future. The work has already begun and I’m personally excited to see what the next century of mining will bring to South Africa.
We are living in interesting times. May this beautiful country, its people, and its mining industry, fully realise the potential beneath its feet.
Thank you.
