Realising Africa s full potential. Mining Indaba Cape Town

Transcription

1 Realising Africa s full potential Mining Indaba Cape Town 7 February 2017

2 Africa s mining sector is in crisis. At its root is a lack of trust between mining companies, governments and indeed, the very nations they lead. A failure to tackle the crisis will result in serious, adverse implications for both economic growth and employment prospects at the moment when the continent's needs are rapidly increasing. HE Olusegun Obasanjo, Chairman: The Brenthurst Foundation and former President of the Federal Republic of Nigeria introducing the Zambezi Protocol

3 Africa is host to 95% of the world s known platinum reserves 90% of chromite 80% of phosphates 60% of gem diamond reserves more than 50% of cobalt 28% of vanadium 25% of manganese 23% of titanium 20% of known gold reserves

4 There is a need for a fresh start in stakeholder relationships given clear common interest. The vicious cycle needs to be broken, trust needs to be re-established, a shared narrative developed, and a fair deal agreed. To start this process, which will not be easy, new avenues for dialogue need to be found, and common interests identified.

5 Aligning stakeholders for a successful future 5

6 Stakeholder responsibilities The journey to our greatness cannot be carried out by one person alone, or indeed, by one group alone. It cannot be carried out by government alone, or the unions alone, or the industry by itself. The road to a better future for all mining s stakeholders lies in collaboration and partnership. Communities Business Stakeholders Government Chamber President, Employees Unions Mike Teke 6

7 Fraser Institute - Investment attractiveness Source: Fraser survey 2015 Under-performing many African jurisdictions 7

8 Business Need to commit to transparent engagement with other stakeholders Stakeholder engagement forums must be inclusive in order to secure a sustainable future Adhere to exemplary standards of governance and environmental and social responsibility Develop local communities for a sustainable future post cessation of mining Must ensure that value flows equitably to ALL stakeholders Commit to invest in growth and sustainability in the appropriate economic environment Communities Employees Business Stakeholders Unions Government 33

9 The regulatory framework impacts negatively... Source: Fraser survey 2015 Only 4 other African countries with less favourable regulatory framework 9

10 Government Unambiguous, clear policy and an supportive regulatory framework Business Partner with private sector to promote investment and growth Administrative processes must be fair and efficient and adhere to legislation Communities Stakeholders Government Providing incentives to investment and a fair taxation regime Employees Unions 26

11 ... and labour militancy is a greater concern Source: Fraser survey 2015 Lowest ranked in Africa 11

12 Organised labour Must focus on promoting members interests in the context of fostering the economic stability of the industry Engage proactively taking consideration of sustainability of operations Avoid damaging industrial action Recognise that a prosperous and growing industry benefits all stakeholders and participate in and support business decisions which ensure sustainability Communities Employees Business Stakeholders Unions Government 28

13 Employees Recognise their role as key stakeholders and influencers in the business Business Recognise role business plays in achieving personal requirements and ambitions Alignment with business will enable sharing of value in upcycles Communities Stakeholders Government Need to contribute to industry survival through downcycles Employees Unions 29

14 ... and community sentiment is a major issue Source: Fraser survey th from lowest in the global sample 14

15 Community organisations Must engage constructively and represent needs of broader constituencies Business Need to understand implications of economic cycles on industry Need to play supportive role to ensure sustainability and ongoing delivery of benefits Communities Stakeholders Government Employees Unions 31

16 Mineral potential compromised Source: Fraser survey 2015 A best practice environment is one that contains a world class regulatory environment, highly competitive taxation, no political risk or uncertainty, and a fully stable mining regime. South Africa s mineral heritage at risk of being sterilised 16

17 Major scope for improvement Source: Fraser survey 2015 An industry requiring re-invention and modernisation 17

18 Leading the way to a modern mining industry

19 A modern mining industry 1. Optimally extracts and beneficiates the country s natural resources 2. Causing no harm to people or the planet 3. Benefits the local community and the national economy 4. Procures locally 5. Is a preferred employer of well skilled people 6. Creates appropriate risk-adjusted returns for investors 7. Regulations, taxation and incentives are consistent, transparent and recognise mining as a long-term driver of economic growth Source: Joburg Indaba October 2015 Able to deliver benefits to all stakeholders 19

20 Our core purpose SIBANYE S MINING IMPROVES LIVES SIBANYE S MINING IMPROVES LIVES 11 9

21 Our vision SUPERIOR VALUE CREATION FOR ALL OUR STAKEHOLDERS Through mining our multi-commodity resources in a safe and healthy environment 21

22 Superior value for all stakeholders Delivery on all strategic imperatives is critical to long term success Safety, volume, cost, grade our operational deliverables that underpin our business Strong cashflow supports the dividend to shareholders and underpins our growth Growth (organic and acquisitive) ensures long term delivery of sustainable rewards to all stakeholders A holistic, integrated strategy and operating model 11

23 Creating value to the country and continent Championing and driving the principles which define a modern mining industry Adopting a firm but fair approach to stakeholder engagement redefining the role of the mining industry Ensure community development which can be sustain after mining activities have ceased Progress towards a Social and Economic compact sharing of profits with employees and protecting the company during economic downturns Creating a safer and more productive work environment through the advancement of technology and R&D Enhancing efforts which supports best environmental practices Sharing profits to shareholders in the way of dividends to ensure superior return on investment Driving policy change in the industry through active participation of industry bodies such as the Chamber of Mines 23

24 Conclusion

25 Conclusion The African mining industry needs to modernise if it is to manage all the challenges facing it Industry leadership is required given the historical mistrust between key stakeholders Alignment of all stakeholders towards a common vision is necessary if we are to secure the future of the industry Sibanye has embraced and is well positioned for modernisation and delivery of superior value for ALL stakeholders Business needs to take a leading role in modernisation 25

26 Questions