New Anglo American chief Cynthia Carroll has vowed to ramp up mining safety, and the departure of two top Anglo executives this week thrust the thorny issue into the spotlight.
Local mining companies have a parlous safety record, in part because of the depth of the mines, and Carroll may find that mining safety, or the lack thereof, is the one challenge that becomes her nemesis.
AngloPlatinum chief executive Ralph Havenstein cited mining safety as an issue when explaining his abrupt departure on Monday.
In interviews, Havenstein said that new leadership was required to implement the group’s new approach to safety. A source close to him described Carroll’s management style as “peremptory”.
AngloGold chief Bobby Godsell announced his retirement a day later. Godsell said that after 34 years in business he was retiring from corporate life and would find other ways to be a constructive citizen.
An aide denied that the two departures were linked, saying that Godsell had been mulling over his departure for some time. AngloGold has had 20 deaths on its mines this year. Anglo owns 75% of AngloPlat, and 41% of AngloGold, which it plans to exit.
Both men certainly have enough cash for whatever they feel like doing. Havenstein earned R21,8-million last year, R14,8-million of which came from gains on share options. Godsell received R11,9-million last year, including a R2-million pre-tax gain on options exercised. High-profile departures of top executives are not limited to the mining industry, as several local companies have discovered in the past few months.
At the group’s AGM, Carroll described Anglo’s safety record, with 44 deaths last year, as “simply not acceptable”. She said the group would build on a 2005 framework of standards, and that effective management of safety would be a requirement “for those managers who wish to make progress within the company”.
The group would also convene a safety summit to ensure consistency of approach, and would implement findings from 20 safety peer reviews. “I am determined that we will be more effective in capturing lessons from safety incidents and near-misses and disseminating them,” Carroll said.
Carroll’s pledge ties in with a long-term industry objective that aims for zero fatalities. Following talks with government, the local mining industry is targeting a 20% annual reduction in the fall-of-ground-related fatality rate. But Frans Baleni, secretary general of the National Union of Mineworkers, said no improvement had been recorded so far.
Baleni said safety regulations did not always take the possibility of seismic incidents into account and that mining companies did not engage with unions on safety issues. He also blamed a salary structure that offered miners low basic wages, but awarded bonuses for meeting production targets. This, he said, encouraged workers to cut corners.
AngloPlat has so far recorded 18 deaths this year, including 12 deaths at its Rustenburg mine. Last year, 19 deaths were recorded, down from 24 in 2005. This compares unfavourably with Impala Platinum’s seven fatalities and Lonmin Platinum’s eight fatalities.
AngloPlat revised its safety strategy early last year. According to its website, it is focusing on management and supervisor training, team-based training, awareness campaigns, technical and engineering solutions, and will invest R400-million in safety initiatives over three years. Last month It halted production at Rustenburg mine after five workers were killed in two weeks.
AngloGold also presided over a parlous safety record at its mines, with 37 deaths recorded last year, 32 of them in South Africa, and 20 so far this year. The group’s Savuka gold mine is the deepest operating mine in the world, with mining work carried out at a depth of 3,7km with long travelling distances. Despite its depth, the mine was the only South African mine among AngloGold’s operations to achieve two fatality-free years in succession. AngloGold’s policy is that mine managers attend the funerals of workers killed on duty, irrespective of distance or remoteness.
Company spokesperson Alan Fine said that while the group did offer production bonuses, it also offered safety bonuses. A poor safety record, he said, could wipe out a production bonus. “We seek a rational balance between safety and production,” he said.
In its Report to Society for 2006, AngloGold said there was a significant increase in the frequency of fatal accidents at local operations, from a 0,17 fatal injury frequency rate in 2005 to a 0,35 rate last year. Falls of ground accounted for 78% of all fatal accidents at its local mines last year, compared to 88% in 2005. Seismic-related falls of ground, which occur when energy is released in the rock, accounted for 44% of fatalities last year and 40% in 2005. Gravity-based falls of rock occur when loose ground is not sufficiently stabilised or supported.
The group revised its safety strategy for South Africa in March last year. Its strategy now focuses on monitoring systems for seismic activity, ongoing awareness programmes, analysis of mine geology and fall of ground data, even when injuries do not occur. Fall of ground awareness audits are planned every six months.
AngloGold also plans detailed workplace condition registers that will monitor adherence to mining standards and the provision of better workplace conditions. “We cannot expect people to work safely in excessive heat, or if they have to walk excessive distances before reaching the workplace,” explained rock engineering manager Johan Laas, in the report. Checklists for shift bosses and overseers have been prepared in order to identify potential hazards.
In the case of TauTona, which recorded 16 fatalities last year, the mining plan was changed to one that gives advance knowledge of faults and other features of the rock. Twelve deaths had resulted from seismic falls of ground, two from gravity-related falls of ground, and two from other causes. So far this year, TauTona has remained fatality-free.
A replacement for Havenstein is yet to be announced, although Duncan Wanblad and Norman Mbazima are joint acting CEOs. Godsell will be replaced by an Australian, Mark Cutifani.