Johannesburg – Trust is at the centre of improving labour relations in the mining industry, according to Andile Sangqu, vice president of the South African Chamber of Mines.
Sangqu spoke to Fin24 at the Joburg Indaba held on Wednesday in Sandton. He said it is necessary to have good relationships with unions and employees to boost productivity in the sector.
“We need an engaged workforce. We need to communicate and discuss the strategy and vision with workers,” he said. Part of building relationships with workers involves acknowledging the wrongs that have taken place in the past. “There are a lot of legacy issues … we need to commit ourselves to work together with labour to create solutions.”
Sangqu added that a number of mining companies are engaging with labour. “Those relationships are changing and coming right.” He added that engagements should not only be “transactional” and happen only during the wage negotiation season.
Sibanye Gold CEO Neal Froneman told Fin24 that the benefits of the business should be inclusive if an agreement with labour is to be reached. “Everyone should benefit from resources. There has been a lack of that.”
He added that value should be created for all stakeholders such as employees and the communities in which mines operate, and not just shareholders. “We need an equitable balance,” he said. “We can get past adversarial relationships.”
When asked about remuneration packages for CEOs during a panel discussion, Froneman said reducing CEO pay wouldn't help. Instead the position of labourers at the lowest level of organisations must be improved, in terms of skills and training. Having higher skills will lead to higher wages. “I do not determine my own salary. It is done through remuneration committees and it is objectively set,” he said.
Making tough labour decisions
Sometimes companies need to make tough decisions to ensure their sustainability, which come at the expense of labour.
Anglo American Platinum CEO Chris Griffith said structural changes had to be made after demand in the platinum sector flatlined in 2012. There had been an oversupply of platinum in the industry and loss-making production. “Tough decisions” had to be made in order to sustain the business and make the industry "investable” again. This involved shutting down loss-making mines, which impacted labour.
“We were not managing the business well. We had become lazy over the good things happening in the past,” he said. “We are now running with the same amount of volume as we were in 2011, with less people.”
If the business had not done that, the company would have been in deep trouble, he explained. Apart from shutting down operations, the business also had to start managing capital better and sell assets that were not yielding returns.
