transformation in the mining industry a...

TRANSFORMATION IN THE MINING

INDUSTRY

– a practical approach -

Presentation for the

Business Improvement in Mining Conference

15th – 16th May 2012

Rosebank, Johannesburg

Transformation Presentation Final Version © 2012 Simang Group (PTY) LTD

By: Andrew Masongwa

CEO – Simang Group

Presentation structure

• TRANSFORMATION – WHAT IS IT?

• TRANSFORMATION BUY- IN

• LEGISLATIVE ENVIRONMENT – Mining Industry

• A PRACTICAL APPRAOCH TO TRANSFORMATION – CASE STUDY:

– ANDALUSITE RESOURCES

– LEVEL OF TRANSFORMATION COMPLIANCE

– TRANSFORMATION APPROACH TAKEN

– HIGH LEVEL ACTIVITY PLAN (FY:09/10)

– CRITICAL SUCCESS FACTORS

• CONCLUSION


What is transformation?


English Dictionary…

A marked change in

appearance or character

especially one for the better

Mathematics…

The replacement of the

variables in an algebraic

expression by their values in

terms of another set of

variables

Linguistics…

… A rule that systematically

converts one syntactic form

into another; a sentence

derived by such a rule.

Genetics…

The alteration of a bacterial

cell caused by the transfer of

DNA from another, especially

if pathogenic.

In our context, Transformation is defined as redressing of the past or present

unfair discrimination suffered by Historically Disadvantaged Individuals in SA

CHANGE

http://en.wiktionary.org/wiki/replacement

http://en.wiktionary.org/wiki/variable

http://en.wiktionary.org/wiki/algebraic

http://en.wiktionary.org/wiki/expression

http://en.wiktionary.org/wiki/value

http://en.wiktionary.org/wiki/rule

http://en.wiktionary.org/wiki/systematically

http://en.wiktionary.org/wiki/convert

http://en.wiktionary.org/wiki/syntactic

http://en.wiktionary.org/wiki/sentence

http://en.wiktionary.org/wiki/alteration

http://en.wiktionary.org/wiki/bacterial

http://en.wiktionary.org/wiki/cell

http://en.wiktionary.org/wiki/transfer

http://en.wiktionary.org/wiki/DNA

http://en.wiktionary.org/wiki/pathogenic

The need for Transformation in the South African Mining Industry was

met with varied responses by individual stakeholders

BUSINESS

IMPERATIVE

NICE

TO

HAVE

WHAT VIEW SHOULD BE HELD BY MANAGEMENT ON TRANSFORMATION?

WASTE

OF

TIME

EXCITEMENT

DISAPPOINTMENT

INDIFFERENCE

TENSION

OPPORTUNITIES RESISTANCE












• CONCLUSION


Why should SA enforce Transformation through legislative means

instead of allowing enterprises to make their own choices in a free state?

IMPACT ACHIEVED

ENGLISH:

1. Supremacy

2. Opportunities

Mine Works Act, 12 of 1911: Prohibited Blacks accessing mining

opportunities in the country

IMPACT

ACHIEVED

ANGLO

REGIME

IMPACT

INTENDED

BOERS / AFRIKANERS:

1. Limited affordability

2. Limited opportunity

BLACKS:

1. Some relief

2. Limited opportunity

ENGLISH/ AFRIKANERS:

1. Supremacy

2. Advantage

BLACKS:

1. Poverty

2. No opportunity

EQUAL ACCESS &

OPPORTUNITY FOR ALL

English

continuous annexure

and Invasion of Boer

and African

settlements

MPRDA, 28 of 2002: Opens mining opportunities to

all with focus on Blacks

ANGLO-BOER

REGIME

ANGLO-BOER-BLACK

REGIME

Apprenticeship Act, 9 of 1953: Reserved technical training for

white Afrikaners

Colour Bar Act, 12 of 1926: Legislated Blacks out of active

participation in the economy

Job Reservation Act, 16 of 1911: Reserved employment for white

Afrikaners

Bantu Education Act, 47 of 1953: Prevented Blacks from obtaining

descent education

EE Act 58 of 1998: Eliminate unfair discrimination

in workplaces, promote AA

BBBEE Act, 53 of 2003: Legislated wider Black

participants back in economy

Skills Dev Act, 97 of 1998 Made skills development

compulsory for all employees

1910 1994












• CONCLUSION


The legislative framework regulating the South African Mining Industry

has been reviewed and enhanced over the years


Minerals &

Petroleum

Resources

Development

Act, No. 28

Mining

Regulations

Oct 2002

APR 2004

Codes of Good

Practice for

the Mining

Industry

APR 2009

Transformation

Strategy

document

JUN 2010

Scorecard for

the Broad

Based Socio

Economic

Empowerment

Charter

Broad Based

Socio

Economic

Empowerment

Charter

SEP 2010 SEP 2010

The scorecard for the Broad Based Socio Economic Empowerment

Charter outlines nine defined compliance elements…

Detailed targets span over a five year period with multiple measures in each

element

REPORTS

SUBMISSION

HDSA

OWNERSHIP

PROCUREMENT &

ENTERPRISE DEV

EMPLOYMENT

EQUITY

HUMAN RESOURCE

DEVELOPMENT

MINE COMMUNITY

DEVELOPMENT

SUSTAINABLE

DEVELOPMENT

BENEFICIATION

HOUSING &

LIVING CONDITIONS

BBSEE Mining Charter Performance

Report

© 2012 Andalusite Resources (Pty) Ltd

Compulsory

Compulsory

Compulsory

17 points

15 points

25 points

19 Points

15 points

N/A in 2011

1

2

3

4

5

6

7

8

9

… with specific targets to be achieved in the medium term until 2014

…(1 of 2)


2011 Targets for the Mining Industry

… with specific targets to be achieved in the medium term until 2014

…(2 of 2)


2011 Targets for the Mining Industry











• CONCLUSION


CASE STUDY: ANDALUSITE RESOURCES (PTY) LTD

Andalusite Resources, a co-owned subsidiary of Simang, is the world’s

second largest producer in its market with success stories all round…

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LL

ST

OR

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23

No

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• ALL other KPIs

… Company performance all round

Performance


Andalusite’ s performance against the Broad Based Socio Economic

Empowerment Charter for the Mining Industry is 5% short of Excellent


Andalusite Resources will have to focus on HRD in 2012 over and above having to

put action plans in place to comply with increased targets for 2012

Legend:

SEMI COMPLIANT FULLY COMPLIANT NON COMPLIANT

REPORTS

SUBMISSION

HDSA

OWNERSHIP

PROCUREMENT &

ENTERPRISE DEV

EMPLOYMENT

EQUITY

HUMAN RESOURCE

DEVELOPMENT

MINE COMMUNITY

DEVELOPMENT

SUSTAINABLE

DEVELOPMENT

BENEFICIATION

NOT APPLICABLE

HOUSING &

LIVING CONDITIONS

Compulsory

Compulsory

Compulsory

14/17

15/15

6/25

19/19

15/15

N/A in 2011

AR achieved the reported good performance consistently since 2009 by

following a simple pragmatic approach…


STEP 1:

Establish how Transformation is viewed by Management and Leadership

BUSINESS

IMPERATIVE

NICE

TO

HAVE

WASTE

OF

TIME

BUSINESS

IMPERATIVE


Recognising Transformation as a Business Imperative, is a critical milestone in

laying the foundation for a successful and sustainable Transformation process

Management and Leadership of Andalusite Resources recognised the following:

GIVES COMPETATIVE

ADVANTAGE

KEY TO THE VERY

EXISTENCE OF MINE

KEY TO THE GROWTH OF

THE MINE AND FUTURE

SUSTAINABILITY

SAW AN OPPORTUNITY FOR

NEW WAYS OF WORKING

AN OPPORTUNITY TO

MANAGE CHANGE IN A

CONTROLLED ENVIRONMENT

Transparency and consultation with the workforce lies at the core of a compliant

process for the development a medium term Transformation Plan

• STRUCTURE ANALYSIS

- HDSA Roles & Responsibilities

- Job content

• WORKFORCE PROFILING

- General, Core and Support

• SALARY DIFFERENTIALS

• POLICIES, PROCEDURES &

• HR PRACTICES

• … more

CONSULTING

WITH

EMPLOYEES

CONDUCTING AN

ANALYSIS

• 5 YEAR OBJECTIVES

• ANUUAL OBJECTIVES

• ACTIVITIES FOR EACH

SCORECARD ELEMENT

• CRITICAL SUCCESS

FACTORS

CONSULTING

WITH

EMPLOYEES

DEVELOPINGA

5 YEAR

PLAN

CEO SIGN-OFF

&

PLAN SUBMISSION

• PRESENT TO BOARD

• CEO Sign off

• Submit to Department of

Mineral Resources

• DISCUSSIONS

- EECB

- Workers forum

- Heads of Departments

Full Compliance Complete Draft Complete

• DISCUSSIONS

- EECB

- Workers forum

- Heads of Departments

Full Compliance

Complete

THE AR CUSTOMISED PROCESS The customised process followed in developing the AR TRANSFORMATION PLAN

STEP 2:

Consult , Consult and Consult again…

CURRENT STATE DESIRED END STATE LINK

A robust Change Management Plan needs to form part of the resultant

Transformation Plan and Strategy.

Conduct an

‘As-IS’

assessment

Identify major

obstacles for

success: - Potential resistance

- Uncertainty

- Fear of

victimisation

BBSEE

Scorecard

Targets to

2014

Growth

and

Sustainability

• New / aligned policies

• New / aligned procedures

• Barriers removal

Measures to address areas of

under performance and further

Improvement else where

STEP 3:

Develop the Transformation Plan based on a thorough understanding of the

starting point on each of the Scorecard elements of the BBSEE Charter

F

5 YEAR

TRANSFOMRATION

PLAN

5.

6.

7.

8.

TRANSFORMATION AUDIT

Preparations

Audit: Policies/ Practices/ 8 Pillars…

Pillars… SWOT analysis

9. Reporting: TBC / Mngmt / CB

Task Name 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 5 1 2 3 4

Weeks Weeks Weeks Weeks Weeks Weeks Weeks Weeks Weeks

‘09 Aug ‘09 Sept ‘09 Oct ‘09 Nov ‘09 Dec ‘10 Jan ‘10 Feb ‘10 Mar ‘10 Apr

1.

2.

3.

4.

INSTITUTIONAL ARRANGEMENTS

Transformation Board Committee

Management Forum

Consultative Body

10.

11.

12.

13.

14.

Transf. strategy formulation

Strategic direction / Policies

AR targets (8 Pillars)

Risk & Mitigation

15.

16.

Implementation planning

Key activities / timeframes

STRATEGIC PLANNING

19. Board Committee Sign off

17.

18.

Budgetting

Balance 09/10 & FY: 10/11

20.

21.

IMPLEMENTATION & ROLLOUT

Implementation

22.

23.

Monitoring

Continuous reporting

24.

24.

Internal: TBC / CB / Mngmt

External: DoL / DM …

25. Review & improvement


STEP 4:

The entire process was managed as a fully fledged project with a Gantt

Chart, Critical path and a project team to drive the activities…

… with implementation supported by strict adherence to a number of

Critical Success Factors which were never compromised at any stage!

SUCCESS VISIBLE LEADERSHIP

SUPPORT

MANAGEMENT

BUY-IN

EDUCATION

COMUNICATION /

CONSULTATION

TRANSPARENCY &

OPENNESS

CHANGE

MANAGEMENT

Above all, TRANSFORMATION is a process without a definitive end!












• CONCLUSION


Elevating Transformation to a Business Imperative, ensures its

sustainability and achievement in the future!

BUSINESS

IMPERATIVE

NICE

TO

HAVE

WASTE

OF

TIME

END!

BUSINESS

IMPERATIVE


Andrew Masongwa

transformation in the mining industry a...

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