At Anglo American, our people are at the heart of everything we do. Our people are our business.
Together, we create and deliver sustainable value by working towards common goals while empowering individuals to realise their full potential.
We are committed to realising our Purpose of ‘Re-imagining mining to improve people’s lives.’ This is how we continue to nurture relationships with our host communities, government, suppliers, customers, and partners.
Thank you Sunday Times for recognising Anglo American, Kumba Iron Ore and Anglo American Platinum in the 2022 Top 100 companies.
Together, we are shaping a better future.
● Scope, size and investment period
● Companies listed on the JSE with a minimum market capitalisation of R5bn as at August31 2022,witha trackrecordof fiveyears trading from September 1 2017 are included.
● Selected companies that meet the aforementioned criteria but are no longer listed on the JSE or the share is suspended at August 31 2022 are excluded from the analysis.
● Theexecutive managementof Arena have also consideredcertain subjective qualifyingcriteria, relatingtotheTop 100Companies’ perceived compliance with good governance and ethical conduct.
● Theshare performanceanalysis assumesan initialinvestment ofR10,000 atthe closing price on August 31 2017 and held for a period offive yearsfrom September1 2017to August 31 2022.
● The companiesarerankedbased onthe compoundannualgrowth rateoverthefiveyearperiod.This analysisassumesthata fraction of a share can be purchased.
Corporate
action
The shareprice performance isadjusted for corporate actions during the review period as follows:
● Ordinaryand specialdividends: The gross dividend per share is assumed to be reinvested in the company on the dividend payment date at that date’s closing share price.
● Scrip dividends: Itis assumed that the cash option was elected and that the gross dividend isreinvested inthe companyas described above.
● Capitalisationissue: Sharesreceived are held until the end of the review period.
● Unbundling:The sharesin “NewCo” received areassumed tobe receivedon thelast date totrade andare trackedseparately. The compoundannualgrowth rateiscalculated based onthe basket ofshares held atthe end of theperiod asa resultof theoriginal R10,000 investment.
● Share split/consolidation: Share price data is adjusted for these corporate events.
● Rights issue: It is assumed that rights are not takenup and lapse, thereforeno adjustment is made.
The Sunday Times Top
Vestra is a corporate advisory firm which provides regulatory, strategic and financial advice to its clients. Vestra assists its clients in providing bespoke solutions through the introduction of innovative ideas and comprehensive strategies founded on sound regulatory understanding, relationships, structural expertise and knowledge of structured and specialised instruments.
over five years from September 1 2017 to August 31 2022, on a theoretical R10,000 investment. The results were compiled by Vestra Advisory and have been evaluated by Deloitte. The executive management of Arena Holdings have also considered certain subjective qualifying criteria, relating to the Top
and ethical conduct. Graphic: Ruby-Gay Martin
Impressive growth trajectory
Montauk’ s all-handson-deck approach is a winning strategy
By AURELIA MBOKAZI-KASHE
● Thisyearbeganon ahighnoteforMontaukRenewables andit continueson anupward trajectory. Thecompany is ranked number onein theSunday TimesTop 100 Companies, from second place in 2021.
The US-based renewable energy company, which specialisesin the management,recovery andconversion ofbiogas intorenewable naturalgas (RNG),completeda seriesof transactions that havethe potential to accelerate its growth further.
Amongthe developmentsisits announcementto beginconstructionof thesecond RNGprocessing facility at its Apex landfill gas project in Amsterdam, Ohio.This additional facilityis expectedtosignificantly expand the production capacity of the Nasdaq-listedcompany, witha
targetedaverage40% increaseinRNGprocessingcapacity andan additional2,100 MMBtu a day production capacity.
It alsofiled aprovisional patentapplication with the US Patent and Trademark Office pertaining to combustion-basedoxygen removal condensate neutralisation technology.
This development followedthe board of directors approving a capital improvement projectto upgradeitsRaegerfacility toincrease production.
CEO Sean McClain says Montauk Renewables continues to implementits growth and development strategywith theexpansion of its multi-dairy RNG cluster project, one of the
Montauk Renewables
projectsset todrivegrowthand takethe three-decades-old company to the next level.
“A critical componentto our development strategyistheability toaddcapacitytocomplementthegrowth endeavoursofourhost business partners,” says McClain.
Ata timewhenclimatechange isoneof the biggest threats tohumanity and requires urgent solutions,the growth ofMontauk Renewables, whichhas asecondary listingon theJSE,indicates shareholderinterestinrenewable energy.
In a statement toinvestors, the company saidthedemandfor RNGproducedfrombiogas remainsstrong due toincreasing public policyinitiatives.These arefocusedon reducinggreenhouse gasemissions, including methane,and thedevelopment of additional renewable energy sources to offsettraditional fossil fuels.
Totaloperating revenuein 2021increased47.5% to$148.1mcompared with 2020.Operating profitin 2021 was down 6.9% to $3.3m.
Dividends inthe yearended December31 2021werenot paidand the company intendsto retain future
Montauk Renewables' Humble Renewable Energy project in Texas, US. Picture: Montauk
Montauk has remained disciplined in its approach to selecting the ... projects it invests in
Sean McClain
Consistent, reputable and sustainable
Implats maintains top balance sheet in tough year for PGM miners
By LYNETTE DICEY
earnings, ifany, tofinance theoperations, growth and development of its business.
With astaff complementof 132people across six statesin the US, thevalue of producing clean energy and looking after the environment as well as colleagues is part of the organisational culture at Montauk.
“The ethos we’ve cultivated across the organisation, its management team,all of our 130employees isthe careandcustody ofthe environmentand anunwaveringcommitment tothe healthand safetyof eachof the employees, ourproject stakeholders,[as well as] creativity and enthusiasm that helps us identify,develop andoptimise newprojectopportunitiesas acomprehensivecollective team,” says McClain.
CFOKevin vanAsdalansays theorganisation’s biggest challenge over the past year was theindustry’s growth,which presented both challenges and opportunities.
“Therenewable naturalgas industryhas grownmeasurablyover thepastyear,increasing and changing the competitive landscape for projectopportunities. Montauk has remaineddisciplined inits approachto selectingthe ...projectsitinvests in,providingeconomic stabilityand meaningfulreturnson capitaland avariety ofcommodity and attribute pricing scenarios.”
Headdsthatin lightoftheindustry’s growthandtostay aheadofitscompetitors, Montauk stuck to its tried-and-tested script to retain its entrepreneurial spirit and its collaborative approachto its growthand development endeavours.
He says the company has an “all hands on deck” approachthat extendsacross the business, fromevaluating newproject opportunitiesto identifyingoptimisationopportunities within its existing project portfolio,and generatingconfidencein discussionssurrounding thesegrowthendeavours with hostbusiness partners, finance syndications as well as its board of directors.
● Impala Platinum (Implats)has continued to reapthe benefitsof elevatedmetal pricing. Despite lower platinum group metal (PGM) pricingandsales volume,thebusinessdeliveredheadline earningsof R32bn,generatedR28.8bn infree cashflow, andearnings before interest, taxes,depreciation and amortisation of R53.4bn in the financial year.
Implatsis rankednumbertwo inthis year’s Sunday Times Top 100 Companies.
Theseresults wereachieved whilenavigatinga hostofoperational challenges,including rising input costs, constrained supply chainsand labourmarkettightness. Thiswas compounded bysafety stoppages, intermittent power supply and periods of community unrest, says Implats CEO Nico Muller.
“The business ended theyear with a strong and flexible balancesheet and is well positionedtofund ourplannedcapitalexpenditure programme,sustain shareholder returns,aswellas pursuearangeofopportunities to enhance ourvalue delivery and long-term sustainability.”
The company hasachieved value-accretive acquisitive growth andadvanced a suite of ambitious organic growth projects in the past year. It has also concluded a historic fiveyearwage agreement,which assuresthe business of a long period of stability.
A deterioratingglobal economicoutlook, dynamic PGM pricing and demand, and rising inflationaffecting inputcosts have
transform its exposure to high-cost,
combined toensure achallenging environment for PGM miners.
Implatshas respondedbyfuture-proofing its business through advancing its competitive position, improving its environmental, socialand governance(ESG) performance,investing inits people, andsupporting product growth anddiversification, whilealigning its production to evolving demand, says Muller.
“A competitive asset portfolio is a strategic advantage thebusiness has soughtto bolster throughoperational exposuretoshallow, mechanisable ore bodiesand developing integratedprocessing facilities,” says Muller. “We are committed to a five-year, R50bn capital investment programme to increase beneficiationcapacity andto extendlife-of-mine development.”
Totransform itsremaining exposureto high-cost,labour-intensive miningatImpala Rustenburg, Implats hasproposed acquiring Royal BafokengPlatinum. In addition,it has earmarked R9bnof thecapital investmentto expandits SouthAfrican andZimbabwean smelting and refining facilities. An initial $521m will be investedto expand its existing Zimbabwean smelting capacityand construct asulphur dioxide (SO2) abatementplant to mitigate air-quality issues. Zimplats hasaccess tohydropowerand hassecureda power generationlicence for 185MW, with the first phase ofa 35MWsolarphotovoltaic project under way. This expansion, saysMuller, willaccommodate an additional 600,000 PGM ouncesa year which, postsmelting, willbe
To
labour-intensive mining at Rustenburg, Implats has proposed acquiring Royal Bafokeng Platinum. Picture: Philip Mostert
Montauk Renewables CEO
transportedtothe company’s South African processing facilities for further refining.
A further R3.9bn willbe invested over the nextfive yearsinimprovingits SouthAfrican processing facilities.
“Combined,these developmentswillbenefitthe SouthernAfrican region’s production,reducethe environmentalfootprintof the group’s beneficiationcapacity, and directly increase local beneficiation, positioning the region more competitivelyas a global mine-to-market PGM producer,” says Muller.
In partnership withAfrican Rainbow Minerals, Implatshas committed R5.7bnto construct anew Merenskymine andplant atthe Two Rivers operationto expand production. Though Implats hasonly a 46% stakein Two Rivers, 100%of the180,000 ouncesof PGM product production will be treated through its smelting and refining facilities.
Together, these projects will increase local beneficiation byabout 220,000PGM ounces a year from 2028 onwards. Muller says that added toa numberof life-of-mineextension projects, the company is confident it will sus-
tainandgrowthe totalrefinedsupplyof PGMs fromits southern Africanassets over the next decade.
The businessis allocatingR4.3bn overthe next fiveyears toensure eachof its operations has renewable energy in itsmix, to meetImplats’ decarbonanisation targets and to strengthenenergy security. “Ourrenewable energy projectswill contributesignificantly to a progressive decline in carbon emissions over time,” says Muller.
The companyis beingrecognised forits ESGefforts withits MSCIESG ratingupgraded toAfrom BBB,reflectinganimproved approachtoemissions and water management and strong governance structures.It wasone ofonly four JSE-listed metals andmining companies to beincludedin theS&PGlobalSustainability Yearbook 2022 and theonly company globally to be awarded the prestigious Metals and Mining Industry Mover Award.
and,inthepast year,spentR170moncommunity development initiatives, R228m on housing, R14bn ondeveloping local enterprisesandR2bnon hostcommunities.Italso provides health-care services,food, agriculture, education and skills development programmes to its local communities.
Nico Muller
“Conversations withour core customer base continues to reflect increasedrequests formetalon long-term supply contracts and supports ourview ofrobust medium-term demand for platinum, palladium and rhodium.Customer requests reflect growing industrial and automotiveusesfor platinum,whilediscussions on long-term availability for iridium and ruthenium continue to rise,” says Muller.
There areopportunities to berealised by advancing itsentry intoCanada, leveraging itscompetitiveadvantage inZimbabwe,and consolidating its competitive position in South Africa, he says.
The company maintains constructive relationshipswithits minehostcommunities
“We’reconfident inthePGM market,despite the global economicchallenges, and believewearewell positionedtobenefitfrom higher-for-longer price outlook.”
Crown jewel at centre of tussle
Royal Bafokeng Platinum has stayed on course amid the battle for its shares
By AURELIA MBOKAZI-KASHE
● RoyalBafokeng Platinum(RBPlat)has climbed17spotsto thirdplaceinthisyear’s Sunday Times Top 100Companies. No other company in the top 10 has come close to achieving this feat.
The mid-tierproducer ofplatinum groupmetals(PGMs) hasbeenthe subjectof ahigh stakescontest between ImpalaPlatinum Holdings (Implats) and Northam Holdings, as both seek a controlling stake.
Northam,in Novemberlastyear, announced ithad bought a34.5% interestin RBPlatfromits parentcompany, Royal Bafokeng Investment Holding Company(RBIH), withoptions and a right offirst refusal to acquire a further 3.28%.
Meanwhile, Implats’ deal togain control ofRBPlat wasalready inprogress.WhenRBPlat closeditsbooks
for the six months toJune 30 this year, Implats’ sharewas just below 40%.Implats requires 42% to gain control of RBPlat. Finalisationofitstakeover offerhasbeenstalledby
Northam’s application tobecome an interveningparty inthe CompetitionTribunal merger hearing.
Weighing up the two bids, RBPlat CEO StevePhiri saidamergerwith Implatswould result in operational,community, labour and cost synergies becausethe two companies’ operationsare contiguousto eachother. While theNortham offerdid notpresent the same synergies owingto the distance between their operations,Phiri said both companieshad good-qualityassetswith long-life mines andgood management. He noted that Implats had a slight advantage.
The lengthy process tofinalise a deal has created some uncertainty.
Phiri characterised thetakeover bids as “thebiggest challenge... thathas been ragingfor the past 18months or so. When that happens in any corporate,itdistracts people,theworkers andeveryone else.The marketbecomes uncertain.The longerit takes, themore uncertaintyisperpetuated.”
Phiri also lamentedthe decision by RBIH to sell itsshares, saying as a majorityshareholder andparent company,RBIH shouldhavebeen there to provide leadershipand be “a catalyst forconsolidation between
thetarget companyandthe acquirer.That did not happen”
Consequently, Phiri hasbeen leading a stakeholder managementcommunications strategy targeted at employees, organised labour and communities to ensure they stay on course and that thecompany does not produce poor results.
Themessaging appearsto havesucceeded as the half-yearproduction to endJuneincreased by4.5%to 225,500PGM ounces, despiteoperational challengesrelatedtogeological conditionsatStyldrift mine.
RBPlat attributed the challenges to Styldrift being a mechanised mine, requiring specificskills thatare inshortsupply, andas a result equipmentmaintenance and machine availabilitywere affected.Outside helphas sincebeenbrought in.
Due to higher costs aswell as lower basket prices, headline earnings per share plummeted 58% to R7.67.RBPlat cutits interim dividend by half to R711m.
In linewith its tagline, “More thanmining”,the ownerof Bafokeng Rasimone platinum mine (BRPM), Styldrift and the BRPM and Maseve concentratorplants isconductinga feasibilitystudy to generate98MW ofclean, greensolar power to boost its energy security and reduce mining inflation. This marks part of RBPlat’s road map to net-zero carbon emissions by 2050.
The feather in thePGMs producer’s cap is the delivery of two state-of-the-art schools it builtin partnershipwiththeNorth Westdepartment of education.
Theschoolsare located close to the company’s flagshipWaterkloof HillsEstate, which broke ground in 2013.
The Waterkloof Hills primary and secondary schools receivedtheir first pupils earlythis yearthough theywere onlyofficially opened in August. The two schools will be opened toall pupils in thearea and not only children of the5,000 employees living at Waterkloof Hills.Ultimately, the two schools willhave apupil population of 2,000.
“Thosetwo schoolsarebeautiful. Iimplorepeople tojustpassby andseethe schools in Rustenburg. Ithink it’s not just RBPlat that should take pride,it is the department of mineral resources & energy that has beenthe facilitator inthe Socialand LabourPlanforthe miningindustryasa whole,” says Phiri.
Amplats standing strong
The challenges of 2022 haven’t slowed down its commitment to society
By LYNETTE DICEY
● Despite local and global headwinds, Anglo AmericanPlatinum (Amplats)hascontinued to delivera strongfinancial performance withrevenue ofR86bn,earnings beforeinterest, taxes,depreciation and amortisation (ebitda) of R43bn, andan ebitda mining margin of 59% achieved for the first six months of 2022, withR33bn paid individends, according to its interim results.
Natascha Viljoen, CEOof Amplats, says 2022hasbeen largelyaboutmitigatingthe persistent operational headwinds of Covid, global supply chaindisruptions, securityof electricitysupply, aswell as socialand geopoliticalcomplexities.
“Global supplychain issues continue to affectus. The deliveryof substandardmaterialshas, for example, extended the Polokwane smelterrebuild bytwo months, leading us to lower our refined productionand salesguidance for the year,” she says.
Conceding thatthis hasbeen disappointing, she saysit’s a temporary delayin refined production anda timingissue ratherthan actual lost production.
Cost escalationsdue tosupply chaindisruptionsand thewar inUkraine alsocontinue to affect the business. Rising global inflation,requiringcentral bankstorespond throughfiscal tightening,willresult inlower economic activity which hasa knock-on effect on demand for the company’s products.
ItsMogalakwena mineexperiencedunprecedented rainfallat thestart ofthe year and supplychain disruptions,which ledto delaysin thedeliveryof drillingequipment. All its operations havealso been affected by load-shedding.
business frommaking asignificant contribution to society.This year it haspaid out R6.8bn in salaries, increased local procurement to R15.3bn which includes R1.1bn on doorstepcommunity procurement paid R350min communitydevelopmentspend and dividendpayouts tocommunity trusts, and R9.5bn in tax and royalties to the fiscus.
The company signed off a groundbreaking five-yearwage agreementwith unionsearlier in 2022.Viljoen says the agreementwas a positive, industry-leadingdevelopment ina challenging economiccontext andenables thebusiness toremain sustainablethrough PGM price cycles.
Viljoen is proud ofAmplats’ nuGen zero emissions haulage solution,a hydrogen fuel cellhaul truckwhich hasbeen designedto operate fullyladen witha payloadof 290 tonnes in mine conditions.
“The truck is the first of its kind in the world and putsSA on the globalstage in termsofinnovation andthedecarbonisation ofheavy-duty transportation.This truckis theembodiment of human ingenuity and what it means to think differentlyabout mining,” she says.
Page 8 To Page 10 ➛
These challenges haven’t stopped the
Unlockingthe hydrogeneconomyis amajor focusof Amplats. “We see hydrogen as a key enabler of a Just Transition, withsignificant potentialforSA tokick-start localisation andbeneficiation in SAand to produceand exportgreen hydrogen,” says Viljoen. “The great potential ... is that it allows for thestorage of excessrenewable energy thatcan thenbeusedin transport,heating and industrial processes.”
Platinum groupmetals, ofwhich South Africa is the world’s largest supplier, play a vital rolein polymerelectrolyte membrane (PEM), electrolysersand fuelcells. Byinvestinginthe hydrogeneconomy,saysViljoen, the companysecures future demandfor its metalswhile alsobeingableto materiallyinform a greener, cleaner future.
For several years now,the company has been investingin hydrogentechnologies and
Amplats’ Mogalakwena mine ore sorter. Picture: Anglo American Platinum
Natascha Viljoen
Steve Phiri
ventures. In 2018, itspun off a number ofthese investmentsin start-upcompaniesinto anindependentventure capitalfirm, APVentures, withinvestments of $100meach from Amplats and the PublicInvestment Corporation.Over 500PGMopportunities havebeen discovered,withinvestments in 24PGM-containing or enablingtechnology companiesacross the hydrogen value chain.
TOP 100 COMPANIES
Anglo American Platinum
August2022: R47,440
201920202021 20182022
Graphic: Ruby-Gay Martin
“Thisis inaddition toin-house market development efforts, all targetingtheunique catalyticpropertiesofour metals to make theworld healthier and greener,” says Viljoen.
Oneofthe company’s four strategic priorities isto bea leaderin environmental,social and governance (ESG). It is therefore focusing on implementingthe threepillars ofits sustainable mining plan by developing trust as a corporate leaderand providingethical value chainsand improvedaccountability tothe communitiesitworks with,improvingthe health, qualityof educationand accessto
But it’s Amplats’ people who arethe real differentiator,saysViljoen. “As an organisation,weareclearthat wewouldnotbeable todoourwork ofreimaginingminingtoimprove people’s livesifit werenotfor themen andwomen whodo theintensive workof miningthemineral resourceswehavebeen blessed with as a country.”
“From a leadership perspective, ourvaluesand purposearenotjust words we say, butare embodied in everything wedo. This startsat the topand tricklesdown beyondthe mine gate,” says Viljoen.
The company expects global platinumsupply anddemand totighten asautomotive platinumdemandimproveson theback ofautomakers replacing somepalladium inexhaust catalysts with platinum.
Palladium supply and demand, says Viljoen, is likely to loosenfor the opposite reason, though the extent will depend on how overallautomotive productionfares.Rhodium supply and demand is expected to remain tight.
Amplats iswell positioned tomeet growingPGMdemand, particularlyasmorecountries announce hydrogen-specific strategies and moreinvestment iscommitted tobroader hydrogen infrastructure and green hydrogen production.
Exxaro makes most of coal price
Top priorities solving logistics challenges and phasing out fossils
By LYNETTE DICEY
● Record coal prices helped Exxaro Resources togrow headline earningsby more thana fifthin thefirst sixmonths of2022. This isdespite reduced exportvolumes and lower earnings from its iron ore investments.
cludes coal, iron ore,zinc and renewable energy, grew its half-year group revenue by 48% to R22.3bnat end-June2022 afterexport prices for coal more than tripled.
This year, Exxaro is ranked number five in the Sunday Times Top 100 Companies.
Thelandscapefor coalhaschangedsignificantly sincethe last Sunday TimesTop 100 Companies, says Exxaro CEO Nombasa Tsengwa. “Webegan experiencinganincreasein coal pricestowards the end of2021, attributableto acombinationof supply-sidechallenges and increasing demand.”
August2022: R35,646
Coal prices have continuedrising in 2022, reachingrecordlevels duetofurthermarket tightnessand theenergycrisis resultingfrom theRussia-Ukrainewar. Butwhiletheprice environment has been favourable for Exxaro at a time whenit has been positioningto improveits quality coalmix, logistics challengeshave meantthere has been only limited opportunityto maximiseits thermal exportvolumes and take advantage of prices.
201920202021 20182022 Graphic: Ruby-Gay Martin
As aresult oflimited availability byTransnet Freight Rail, Exxaro has been forced toresortto truckingcoalto ports, including Maputo in Mozambique. This has, in someinstances, doubledthe
“Solvingtheselogistical challengesisa critical priority,” saysTsengwa. “We’ve been involvedwith findingand implementingsustainablesolutionswith Transnetbothindividuallyasa companyandcollectively throughtheMinerals CouncilSouthAfrica. However, thereis a lotfor thegovernment to
Exxaro’s flagship mine, Grootegeluk, near Lephalale in Limpopo. Picture: Exxaro
consider inincentivising theprivate sectorto help create sustainable rail capacity.”
She reports somesuccess, particularly in relation to bettersecurity of the coalline in certain areas.
Exxarohas anambitiousplan todiversify away from fossil fuelstowards alternative resource opportunities.While phasingout fossil fuelsis a priority,the businessis determined to follow the Just Transition principles and also decarbonise its operations.
Tsengwa says the company aims to be carbon neutral by 2050.
The companyalso plans todiversify its mining portfolioto ensureits growthis driven by lower-carbon businesses.
Thefirst ofthese investmentswas into renewable wind energy through a whollyowned renewable energy business, Cennergi, currentlyoneof SouthAfrica’s largest locally-owned renewables developers. Cennergi’s wind farms,Amakhala Emoyeni andTsitsikamma, togethergenerate229MW ofelectricity into the grid.
Other renewable energy projectsinclude the developmentof the70MWLephalale SolarProject. The latter development aimsto lower the emissions for Exxaro’s Limpopo-based Grootegeluk operations.
Ensuring Exxaro’ssustainability, shesays, is acombination of factorsincluding navigating andresponding tochange, balancing stakeholder expectationsand needs,as well asthe considerationof social,environmental and economic issues in all its strategies to ensure profitability and competitiveness.
Withcoal pricesexpectedto remainat current levels till the first half of 2023, Exxaro will continue to maximiseits volumes and highest quality mix to benefit from exports.
Exxaro’s safety achievements, community empowerment initiatives, employee engagement efforts, environmental stewardship and high levels of governance resulted in a 3.8 out of 5 score in the FTSE Russell ESG Index.
Bythe middleof 2022,Exxaro hadbeen fatality free for more than five years.
Aspart ofExxaro Resources’ biodiversity and environmental strategies, the mining company isdonating 40white andblack rhinos fromits Manketti Game Reserveto the Zinave National Park in Mozambique.
Bringing long-term growth and opportunity for all our stakeholders
Coolead 18932
Nombasa Tsengwa
ARM in good stead
Group improved its financial position despite low iron and PGM prices
By AURELIA MBOKAZI-KASHE
● Diversification hasproved advantageous for AfricanRainbow Minerals (ARM)in the face of lower ironore and platinum group metals prices.
The mining andminerals company held steady in sixthplace for a secondyear runningintheSunday TimesTop100Companies, notwithstanding a13% drop in headline earnings to R11.3bn for the year ending June 30 2022.
Headlineearnings pershare alsoslumped toR57.87from R66.88 in2021, thoughtotal dividends paid rose toR32 a share comparedwith R30theprevious year.
caterfor athirdofthe division’s consumption. Pending boardand regulatory approval, the project should be complete in three years. Plans to generate about 80MW of solar energy for the ferrous division are advanced.
ARMemploys 22,000people,including contractors.Salariespaid inthe2022financialyearstoodat R4.2bn,whileR198mwas spent on skillsdevelopment. Historically disadvantaged people make up 68% of management.
ARM spent R151m on community projects with the emphasison supporting women, youth, thehistorically disadvantagedand people with disabilities. These projects focus on water provisionand sanitation, building andupgrading roads, health and education.
“ARM’s qualitydiversified portfolio enabledus to improveour financial position despite lower prices for iron ore and platinum group metals. Our net cash increased fromR8.2bn toR11.2bn, enabling ARMtocontinue investinginourexisting business,paydividends andpursuevalueenhancing growth,” saidexecutive chairand founder Patrice Motsepe inthe annual report.
In accordance with its commitment to the ParisAgreement, ARMaimsto achievenetzero greenhouse gasemissions from mining before 2050. Meanwhile, scope 1 and 2 emissions werereduced by8% duringthe reporting period andwater withdrawn decreased by 13% to 17.3-million cubic metres.
The developmentof decarbonisation plans at the company is under way.
ARMPlatinumhas signedanagreement topurchase solarpower fromSola Group,in which Solawill build aphotovoltaic facility and wheel clean, low-costenergy to ARM’s PGM operations in Limpopo and Mpumalanga.
The solar energy supplied is expected to
Communities which have an 8.5% shareholding in Modikwa mine received R255m in dividends.
The miningand resource group recorded twofatalities inthe 2022 financialyear; thelost-time injuryfrequency rate improved by 24%.
period, andfully settledthe R3.5bnpurchase consideration on September 1.
“Thestrategic acquisitionof thisquality asset enablesARM toscale itsPGM portfolio andimprove ourglobalcompetitiveness. Thismine isexpectedtomore thandouble our attributablePGM ounces overthe next five years,” Motsepe said in theannual report.
Thedevelopmentof Bokoni,Motsepeadded, wouldalso create sustainablevalue for employees, local communities and black industrialists ascollectively theywould own 15% of the mine. The mine is also expected to create5,000 jobs,halfofwhich willbepermanent.
“Central to this mine plan is improving efficiencies, reducingunit costs and providing early revenue. We envisage development capital of about R5.3bn [inreal 2021 terms] over three years toramp the mine upto steady-stateproductionof about300,000ounces of6EPGM and 255,000 tonnes of chromite concentrateper annumfrom 2028,” CEOMike Schmidtsaid inthe annual report.
With operationsin SouthAfrica and Malaysia, ARM minesand beneficiates iron ore, manganese ore, chrome ore, PGMs, nickeland coal.Italsoproduces manganesealloys andhas astrategic investmentin gold through Harmony Gold.
ARMFerrous headlineearningsfell 16%to R6.7bn asa resultof lower iron oreprices; whileARM Platinum headlineearnings dropped 34% to R3.1bn on the backof lowerrhodiumand palladium prices.
Higherexport coalprices drove aR1.2 billionincrease inARM Coalheadlineearnings to R928 million.
Inline withitsvalue-enhancing growth strategy, ARM acquired the Bokoni platinum mine in the eastern limbof theBushveldComplex during the reporting
The R10.4bnmodernisation andexpansionprojectofBlack RockMinewascompletedand handedoverto operationsfor production.Unitproduction costsareexpected to decline as a result, while production of manganeseore shouldrampup to4.6-million tonnes a year by the 2025 financial year.
w wo omen men’’s s sse eat at at at thethe tabletable
By AURELIA MBOKAZI-KASHE
● GloriaTomatoe Serobeisone ofSouth Africa’s iconic businessleaders, known for being an architect of women empowerment.
A co-founderof themultibillion-rand Women Investment Portfolio Holdings (Wiphold), her business acumen is steeped in socialtransformation valueswith theend goal being the empowerment of women.
Her sociallyinclusive economicmodels empower marginalised rural women through interventions underpinnedby agriculture and tourism, as well as corporate executives wholean onherforpersonal wisdomand business strategies, in equal measure.
Humble, kind, compassionate, hardworking and determined are among the com-
Astute businesswoman, champion of the poor and inspiring leader, Gloria Serobe’s integrity and passion informs all she does
monadjectives usedby familyand friendsto describe Serobe, this year’swinner of the Sunday Times Lifetime Achiever Award. She sits on variousboards of directors, including Hans MerenskyHoldings, Denel and AdcorpHoldings, andalsoserved onthe Presidential EconomicAdvisory Counciland the Presidential Working Group on Women. During her illustriousbusiness career, she has received many accoladesfor her contribution toSouth African society. Someof the tributes includebeing namedBusinesswoman of the Year in the corporate category and theAfrican WomenCharteredAccountants Woman of Substance in 2006.
Louisa Mojela,group CEOand co-founder ofWiphold, saysSerobedeserves everyhonourandrecognition bestowedonherowing to herpassion for ensuringwomen’s empowermentis alwaysontheradar ofpolitical leaders and at everygovernment policy discussion.
“One of the benefits of working with Gloria isthat she’s greatat ensuringthat women from all walksof life have a seatat the table sothat theirviewsareheard andaddressed,” says Mojela.
“Sheis alwaysinvolved intransforming
To Page 14 ➛
Gloria Serobe has been awarded the Lifetime Achiever award at the Sunday Times Top 100 Companies event. Pictured here, Serobe was theguestspeakeratthe InauguralArchbishopThaboMakgobaAnnualPublicLectureatNMU SouthCampusinMay2022.
Picture: Werner Hills
andempoweringwomen inurban,periurban and rural areas. She takes services to Centane to ensure women there are not left behind while also ensuring that Wiphold grows and benefits its shareholders.”
Serobe’s projects in Centane, a small rural coastal townin theEastern Cape,where she hasbeen drivingsizeable communitydevelopment partnerships, includean upmarket seasidehoteland alarge-scalecommunal farming project of maize and soya beans. This commercial-sized farming projecthas enabled rural women to take charge of their finances.
Mojelafurthercredits herlong-timebusinesspartnerand colleagueforensuringthat all Wiphold employees uphold the highest level of integrity and governance.
In March 2020, Serobewas appointed by President Cyril Ramaphosa to chair the Solidarity Fund a collaboration between business, the government and civic society establishedto offsetthe impactof Covidon citizens and the economy. Her role was to try tohelp thepoor andwomensurvive thehumanitarian crisis created by the pandemic.
Recognising her contribution to business inSouth Africa,fouruniversities have conferredherwith honoraryPhDsoverthe years.
Serobe credited her conservative, religiousupbringing (hergrandfather wasa Baptist priest) for hervalues underpinned by integrity, and for her success in business.
Her childhoodwas livedbetween Gugulethu inCape Town,and Centanein theEastern Cape. She has adapted the life lessons she learntgrowing uptomoderntimes toshare with the younger crop of professional women who look up to her for inspiration.
In aninterview with702, Serobeencouraged youngwomen businessleaders towork smarter andfocus on finding agood worklife balance and not abandon their families to pursue corporate careers.
She usedher entrepreneurialmother asa good example.
“My parents ran shops in townships. My mother would be gone from 7am until 9pm, but we knew where she was and that she was fending for us. After school, we would simply go to the shops to be with her.
“Beingan absentmother isnotnew andI don’twant youngprofessionalsto feelguilty. Youjusthaveto levelwithyourchildrenand letthemknowthat youwillnotalwaysbe present.However, don’tshock childrenby promising them you will be at their swimminglessons andnotbe there.Thisis oneof the lessons I learntfrom my mother,” she says.
“When you talk about legacy and mentoringwomen, wehaveanobligation togive them tools to ensure theydo not only focus
Whenever we experience challenges and there’s an issue we need to address with the government, Gloria is our arsenal
Louisa Mojela Group CEO and co-founder of Wiphold
She humbles herself, treats people with respect, and is persuasive while managing to make the family’s elders feel important
City Serobe brother-in-law
on careers and abandon their homes and families. Theburden of balancingwork life and home is a huge struggle, but we have bettertoolsthanour mothers.Wehavetechnologyandfacilitiesthat takepressureoffus, such as delivery apps, thatallow us to be [both] presentmothers thatcreate warm homes forour children andpowerful executives,” she says.
Her brother-in-law,City Serobe,speaks glowingly ofSerobe’s dedicationand lovefor her biggerfamily, which has elevatedher to the role of thegreater Serobe family matriarch, filling the shoes left by his mother.
“Gloria tells people that she is a wife and a motherfirst, andmanagesher differentroles withfinesse. Shehumbles herself,treats people with respect, andis persuasive while managing to make the family’s elders feel important,” he shares.
Mojela maintains that among her many business attributes, Serobe is resolute and fights towin in everyrespect andnever accepts failure.
“Whenever weexperience challengesas a company and there is an issue we need to addresswith thegovernment, Gloriais ourarsenal.”
She says Serobe does not tolerate any form of mediocrityand gets morefrustrated when people whohave been entrustedwith important positions instate-owned entities and the privatesector “drop the ball” and forget their core mandate.
Gloria Serobe sits on various boards of directors, including Hans Merensky Holdings, Denel and Adcorp Holdings,and also served on the Presidential Economic Advisory Council and the Presidential Working Group on Women. Picture: Robbie Tshabalala
Business Leader of the Year
Providing hope and long-term vision
Andrew
Kirby’s exceptional leadership steered Toyota through its biggest production disaster
CEO of Toyota South Africa Motors Andrew Kirby advises young leaders to focus on upskilling, rather than on how quickly they can get promoted. Picture: Darren Stewart/Gallo Images
By LYNETTE DICEY
● PresidentandCEO ofToyotaSouthAfrica MotorsAndrew Kirbyisthe 2022Sunday Times Business Leader of the Year in recognition of his leadershipduring a particularly trying period for the vehicle manufacturer.
Toyota’sDurban productionfacilities suffered the most extensivedamage ever experiencedby thecompany inits 60-yearhistoryinSouth AfricaonApril122022 asaresult of flooding.
“The magnitude of the disaster was enormous,” admits Kirby. “We hadbetween 0.6m and 1.8mof mud over ourentire 87ha site and extensivedamage to electrical, mechanical and IT equipment.We had to order just over 100,000new equipment parts to replacedamaged partsand wereforced to crush about 4,300 vehicles.”
Parent company Toyota Motor Corp in Japandispatchedits seniordisastermanagementexecutive toDurbanafter thefloods, whoconfirmed thiswasthe biggestdisaster causing themost extensive damage toany of the company’s productionfacilitiesin itshistory.
This was not the first flood to affect Toyota’s Prospectonplant. Aftera much smaller floodin 2017, the companycreated a disaster protocol whichhas been regularly updated.Addedprecautions wereputin place, including strengtheningthe plant’s gutterand storm-waterdrainage systems,as
It’s important for leaders to spend time at the coalface of their businesses
Andrew Kirby CEO of Toyota SA Motors
well as installing a storm-water warning system. Eventhese precautions,however, were not enough to withstand this year’s floods.
“Iwas inJapanin2011 afterthetsunami
and ourdamage was evenworse than theirs,” says Kirby. “We wereshocked atthe enormityofthe destructionthefirsttime we wenton siteafter thefloods. Theentire plant was covered by thisthick mud. It took us months to recover.”
The company’s firstpriorityin theaftermath of the floods wasto ensure the safety and wellbeing of its employees. “We were fortunate that none ofour staff lost their livesorwereinjured, butanumberofthem had their homes damaged.We have been assistingthosewho suffereddamageto their homes to rebuild.”
Its secondpriority wasits community, including suppliers andits dealer network, with Toyota’s technicalteams tasked with helping where necessary.
Recovering production wasonly a third priority,says Kirby,addingthat noemployees lost their jobs during this period.
“What was very reassuringwas the support wereceived fromour parentcompany. Theysenta numberoftechnicalexperts and engineersto helpus repairand rebuild. This,combined withthesupport fromlocal technical partners, gaveme enormous hope.”
He says he was also particularly proud of how manyof thecompany’s youngeremployeestook responsibilityandownership duringtherecovery phase. “They were
Workers assemble vehicles as operations begin after flooding in April shut down the Toyota South Africa Motors plant in Durban. Picture: Rogan Ward/Reuters
presentingon thestatus ofthe recoveryas though theyhad fiveto 10years ofexperience,” he recalls.
By the end of July,the plant had started ramping up production and regained full production inSeptember. “Ourrecovery has beennothingshort ofmiraculous,” says Kirby.
The companyhas now developeda comprehensiveset ofmeasuresdesigned fordefence againsta floodof thismagnitude. It’s working with the local authorities to address infrastructure issues, hasbetter secured its perimeter, and has put additional on-premise protections in place.
The company has had a difficult few years. Its operationswere haltedby theCovid pandemicin 2020,which wasfollowed bycivil unresta yearlater andthen thefloods. Kirbysays thecompany remainscommitted to South Africa.
Heconcedes, however,thecountry isnot without its challenges. To achieve shared prosperity, South Africa urgently needs to address a numberof fundamentals, including lawand order,fraud andcorruption, andexpediting the judicial system. Getting these fundamentals right,believes Kirby,will go somewaytowards attractingbothlocaland foreign investment.
“At the same time, we need to be investing inutilitiesincluding energy,waterandsanitation aswell asinfrastructure suchas rail, ports, roads and dams as these are all important for businesses and will create opportunities for growth.”
In the past year, thecompany has made a number of adjustments.
“We’renowpartof amuchlargerglobal disruption characterised bynew energy vehicles and carbon neutrality. Given that the majorityof ourexportsareto Europe,where petrol, dieseland hybrid vehicleswill ultimatelybe banned,weneedto ensurewe don’t become an old-technology supplier if we plan to maintain that export volume.”
Business leaders, he says, need to focus on whatthey cancontrolandnot expendtoo much energy on aspects out of their control.
“Our role as leaders is to provide hope and along-term visionforthefuture. It’s also important for leadersto spend time atthe coalface oftheir businesses. For me,that is spending time on the production line, in our offices, withour suppliers and withour dealer network. Not only doesthis allow us to keep grounded,but it ensuresbusinesses are galvanised in the right direction.”
Hisadvice toyoungleadersis tobepatient.
“South Africais in desperateneed ofa talent pipeline of good leaders.Try to stay in one sector and focuson upskilling, rather than on how quickly you can get promoted.”
Northam’s growth strategy on track
Miner continues to benefit from acquisitive and organic growth strategy
By AURELIA MBOKAZI-KASHE
● NorthamPlatinum hasmoved onenotch up the Sunday Times Top 100 Companies list, fromeighth in2021 tosevenththis year,despite a7.6% decline in operatingprofit from last year’s record R16.1bn.
In contrast,in theyear toend-June 2022, revenuefor theintegratedmine-to-market platinumgroupmetals (PGMs)producerwas up from R32.6bn to R34.1bnand so was production from 690,867ounces lastyear to 716,488 ounces in 2022.
Northam attributes thedip in operating profit to lower metalprices, increased social unrest inthe areassurrounding itsoperations,andan 18.9%uptickinproduction costs.
CEO PaulDunne saidthe company’s growthstrategy isstill ontrack, withthe miner having set itselfa medium-term annual production target of 1-million ounces.
Nodividend wasdeclaredinthe 2022financial year as the company continued to pursue its countercyclical investment in both acquisitions and an organic growth strategy, the cornerstone of which isdevelopment of lowcost,long-lifeassets toderiskoperations against muted or volatile markets.
“In 2015, we embarkedon a focused programme of acquisitions, targeting operations andmineral resourceswith synergisticand
Northam Platinum
optionality benefits,” said Dunne in the group’s integrated annual report. Inaccordance withthe strategy,Northam acquired a34.5% shareholdingin RoyalBafokeng Platinum (RBPlat)from its parent company, RoyalBafokeng InvestmentHoldings(RBIH), inNovember2021, withoptions andaright offirstrefusalto buyafurther 3.28%.
The transaction increasedNortham’s debt to R16bn, though CFOAlet Coetzee has subsequently saidthe companyexpected todeleverage aggressively in the next 12 months.
Aspartofthedeal, RBIHtookupan8.67% stake in Northam so the RoyalBafokeng Nationcould continue tohold aninterest in RBPlat.
The transaction led to a skirmish withImpala Platinum(Implats), whosebidto acquire a controlling stake in RBPlat wasalready under way. Implats has since grown itssharein RBPlattojustbelow 40%.
Meanwhile, Northam’s application to becomean inTo Page 17 ➛
A smelter at Northam Platinum’s Zondereinde operation. Picture: Northam Platinum
tervening party in the Competition Tribunal’s hearingfor theproposedmerger ofImplats andRBPlat hasstalledthedeal, whichImplats originallyintended to finaliseby April 2022. Ironically, Northam received a R536.2m dividend from RBPlat in April.
“RBPlathasa large,proven,qualityresourcebase, containingapremium mixof PGMs.Itsmines areshallow,well-capitalised and partiallymechanised. Theyare currently producing, have extensive lifeand are cash generative, withthe potential ofoperating in the lower half of the cost curve.”
Analysts havesaid that Implats’ bid to control RBPlat woulddeliver more valuegiven the proximity of the entities’ assets, but Northam argues RBPlats’ two assetsare within 80kmof itsfullyowned Zondereinde and Eland operations. Northam’sthird mine,Booysendal,is situatedin the BushveldComplex. It fundsthe Buttonshope Conservancy Trust, which manages 8,500haof the14,690habiodiversity-rich land which the mine ownsand in which it’s located.
Northamalso countsaPGM recyclingfacility in theUS among its assetsand holds significant interest in Dwaalkop Platinum Mine and SSG Holdings.
Mvusi leadsa boardwith adiverse skills set, whichcomprises four womenand five men,includingformer deputyfinanceminister McebisiJonas. Theboard haspaid tribute to late former chair David Brown.
Northam has created 2,864 new sustainable jobs in the2022 financial year, bringing total jobs created since 2015 to 11,096. The bulk of the workforce (82%) comprises historically disadvantaged people, with 64.5% in management,and15.4% womeninmanagement. The company maintains good relations withorganisedlabour andhassignedfiveyear wage agreementswith the National Union ofMineworkers atZondereinde and Eland.
Covid continuedto affectoperations duringtheyeardue tomedicalabsenteeismand employeeturnover ofolderstaff members,in particular. The company’s vaccine rollout yielded positive results. Sadly, two operational fatalities were recorded at Zondereinde.
At Anglo American, our people are at the heart of everything we do. Our people are our business.
Together, we create and deliver sustainable value by working towards common goals while empowering individuals to realise their full potential.
We are committed to realising our Purpose of ‘Re-imagining mining to improve people’s lives.’
This is how we continue to nurture relationships with our host communities, government, suppliers, customers, and partners.
Thank you Sunday Times for recognising Anglo American, Kumba Iron Ore and Anglo American Platinum in the 2022 Top 100 companies.
Together, we are shaping a better future.
Paul Dunne
Strong showing in a tough year
Kumba’s disciplined cost control and value over volume strategy is paying off
By LYNETTE DICEY
● Despitethe challengingmacroeconomic environment, South Africa’s largest iron ore producer,KumbaIron Ore,deliveredasolid financial performancefor the firsthalf of 2022, which translated into ebitda of more than R23bn and an ebitda margin of 54%.
Thecompany deliveredthis strongperformance in the first half of the year amid adverse seasonalweather conditions,equipmentavailability issues,logisticchallenges, and a safety resetinitiative which affected operational activity.
Kumbais rankednumbereight inthis year’s Sunday Times Top 100 Companies.
Aside from weather-related impact on the railway line, suboptimallogistics performance hampered the business.
Though there was a slight improvement in
Reducing our costs to ensure that we stay competitive is a priority
Nompumelelo Zikalala
Kumba Iron Ore CEO
the secondquarter of 2022,rail constraints had a knock-on effect on performance: lower levels of stock at the port resulted in lost sales andrevenue, aswellashigher freightcosts due toship-loading delays,and ultimately meantthat salesincreased onlymarginally off a low 2021 base.
“Weare workingwithTransnet toimplement improvement initiatives, including in-
tegrated planningand trackingto reducethe number of speedrestrictions and unscheduled maintenance events. We should mitigate some of the losses through the use of the multipurpose terminalat SaldanhaPort, which will help to improve loading efficiency,” says KumbaCEONompumelelo Zikalala.
Despite theimpact ofthe recentrail and portstrike,Kumba maintaineditsfull-year productionguidance,though atthelower end of38- to40-million tonnes,enabled by an increase in production at Sishen. However, thecompany recentlylowered itsfull-year export guidance by about 6% as a result of the Transnet strikeand theunplanned delayin the annual maintenance shutdown.
In aninflationary environment,it isdisciplined cost control that’s paying off for Kumba.The costincreasesbrought aboutby operational headwindsincluding increased fuel, haulageand explosive costswere offset by higher work-in-progress stockpile replenishments.
“Reducing our costs to ensure that we stay competitive is a priority,” says Zikalala.
Kumba Iron Ore's Kolomela mine near Postmasburg in the Northern Cape. Picture: Philip Mostert
slowdown inthe priceof ironore. Thismeansinvesting innewtechnology toprocess the ironore at sourceso ithasahigher ironcontent and thus higher value before transporting it toKumba’s customers around the world.
Kumba Iron Ore
Share price, daily (cents)
“Over the years, we’ve been focusingon ourTswelelopelemarginenhancement strategyunderpinned by three drivers: improving the quality of products to maximise value,improving operational efficiency, anddelivering a cumulative cost saving of R4.5bn. This has seen our marginincreasefrom45% in2018to54%as we achievea marketpremium forthe quality of our ore,” she says.
TOP 100 COMPANIES
August2022: R32,607
201920202021 20182022
Graphic: Ruby-Gay Martin
Asthe marketembraces theneed fordecarbonisation,Zikalala believessteel willremain pivotal for the future, because it is a crucial ingredient that enables energy transition across all renewable power infrastructure and electric vehicles.
“Steel demand is expected to increase in the global shift towards renewable energy,” shesays. “Steelintensityin renewablepower infrastructure is between 10and 30 times that of fossil-based power infrastructure.”
In aneffort to decarbonisethe steelmaking process, mills are investing more in direct reducediron, witha healthypipeline ofprojects coming on board inthe next three decades. China and other traditional steelmakingfurnaces areconsolidatingproduction into larger blast furnaces, reducing emissions by usinglump oreinstead offine ore,which significantly reduces overall emissions. These trendsare expectedto benefit Kumba given that its share of lump ore is muchlarger than itscompetitors’ and itsproducts havea muchhigher ironore content.This, believesZikalala, willdrive demandfor high-qualityoreas itoffers higher productivity andhas lower energy
requirements.
Kumba, partof theAnglo American Group, is an acknowledged leader in sustainability. Anglo’s FutureSmart MiningTM is focusedon developing the futureofsustainable miningwithan ambitiousplanto driveanincreasingly decarbonised “green steel” value chain.
“As part of our decarbonisation pathway, we are targeting a 30% reduction in scope 1 and 2 greenhouse gas emissions by 2030, and achieving carbon neutrality by2040.Asa result,weareprioritising our participation inthe broader Anglo American Group’sregional renewable energy strategy.
“This includes the plan to develop a 65MW solar plant at Sishen by 2025, as well as wheeled wind and storageby 2030, which offers us a pathway tozero scope 2 emissions,” says Zikalala.
Kumbaachieved aFTSE4GoodIndex score of 4.8 out of 5.
Thebusiness isalsostrivingto createa safe, inclusive and diverse workplace that encourages high performance and innovative thinking. Anew hybridemployee shareoptionscheme offersa tangibleand lastingbenefit toemployees. Kumbais particularly proud ofhaving achievedsix consecutive years of fatality-free production.
Powering sustainable mining by integrating renewable energy into our existing minerals portfolio is how we will maximise coal’s full scope of possibilities, fulfilling a critical role in our industry.
Building our core businesses and diversifying our organisation to remain relevant and resilient in an ever-changing global environment means we will continue to make our coal business successful – a competitive cash generator and critical enabler to the broader South African economy.
It It’’s not s not just just a aboutbout pr profi ofit f t for or A Anglonglo Amer Americican an
Mining giant walks the talk in its commitment to employees, the environment and host communities
By AURELIA MBOKAZI-KASHE
● Havingbeen inbusiness formore thana hundredyears, AngloAmericanis nowfocusingonmorethan justmakingmoney.The global mining company celebrated its centenary in September 2017, and has since been on a quest to “reimagine mining to improve people’s lives”.
This yearis nodifferent, eventhough its financial performance for the six months to June 30was somewhatmuted compared with 2021’s commodity price-driven record earnings.
Underlyingearnings beforeinterest,tax, depreciation andamortisation (ebitda) slipped 28% to $8.7bn,but was still the
Anotableachievement wasthecommissioning of Quellaveco ontime and on budget; the conglomerate’s mineinPeru isexpected toproduce 300,000copperequivalent tonnes in the next 10 years.
Atthe releaseoftheresults, themining giant wasmindful of how itsoperations were affectingemployees, hostcommunities,the environment and society at large.
CEO DuncanWanblad expressedsadness at theloss ofan employeein anequipment lifting incident in Australia.
“It issimply unacceptableto losea lifeat work andwe aredetermined toeliminate workplace fatalities once and for all. This is my number one priority,” he said, adding that the Elimination of Fatalities Taskforce supporteda93%reduction infatalincidentsin the past decade.
Covid continued to affect operations in the first half of theyear via related absenteeism, thoughhospitalisation anddeath rateswere lower due to less virulent variants and higher levels of vaccination.
The company made significant financial contributions to accelerate vaccination rates usingits ownhealthfacilities,while theLiving with Dignityprogramme helped tackle gender-based and domesticviolence to create a healthier working environment.
Throughits SustainableMining Plan,the groupiscommitted toreducegreenhouse emissions by30% by 2030;improve energy efficiencyby 30%;achieve a50% netreduction in freshwaterabstraction in waterscarce areas; andreach net-positive impacts in biodiversity where it operates.
It is also committed to employing its assets to make products thatenable a low-carbon economy.
Aligned tothis strategy,it signeda memorandum ofunderstanding inMarch with EDF Renewables to work together to develop a regional renewable energy ecosystem in South Africa.
Theecosystem issettomeet AngloAmerican’s operational electricityrequirements in the country by supplying between 3GW and 5GW of solar and wind power, as well as storage, by 2030.
Any excess electricity willbe supplied to
AlexTumisangLekga isAfrica’sfirstlicensedhydrogen truckoperator.Hewas behindthewheelwhenAnglo American unveiled the world’s largest hydrogen-powered mine haul truck that operates at its Mogalakwena PGMs mine in Limpopo. Picture: Anglo American
the grid to bolsterits resilience. The partnershipis expectedtostimulatea hostofeconomic benefits,including developmentof new sectors, and supportthe country’s Just Energy Transition.
At theend of June, themultinational started negotiations with FirstMode to combine Anglo American’s nuGenzeroemissions haulage solution(ZEHS) withFirst Mode’s
Share price, daily (cents) Anglo American
Graphic: Ruby-Gay Martin
specialisttechnology toaccelerate thedevelopment anddeployment ofZEHS technology across Anglo American’s mine haul truck fleet. The ZEHS is powered by a hydrogen fuel cell and aims to decarbone heavy-duty transport.
TOP 100 COMPANIES
Earlierin JuneAnglo Americanannounced it had signed a$100m 10-year sustainabilitylinked loan agreement with the International Finance Corporation, to support community development in South Africa’s rural areas close toits operations.The loan will beused to promote jobcreation aswell asimprove thequality ofeducation for 73,000 students.
In 2021, Anglo American supported 147,000jobs across Australia,Brazil, Chile, China, India,South Africa,the UK andNorth Americaetc. It paid $3.5bn in taxes,a 6% rise from 2021.
The groupdropped five placesfromfourth toninthin this year’s Sunday Times Top 100 Companies.
A resilient and agile portfolio
Strong performances from Nutun and WeBuyCars has driven organic earnings
By LYNETTE DICEY
● TransactionCapital nowhasa decadeunder its belt as a listed company, during which timeithasremained aperennialmarketfavourite.
The company invests in and operates a diversified portfolioof high-potentialbusinesses in marketswhere historically low levelsofclient serviceandstakeholdertrust provide opportunities for disruption.
Thegroup isranked number10 inthis year’s Sunday Times Top 100 Companies.
This pastyear itextended itstrack record of organicearnings growth,driven primarily by strongperformances fromNutun (previouslyknown asTransaction CapitalRisk Services) and WeBuyCars.
Nutun has positioneditself to drive growth through twomain revenue streams: capital-enabled services and customer experience management services,the latter beingthe fastest-growingsegment ofthe
We are determined to eliminate workplace fatalities once and for all
Duncan Wanblad
Anglo American CEO
business.
Customerexperience managementservices are capital light,and diversified across geographies, sectors andclients, which lowers concentration risk, enabling the businessto earnreturnsindifferent marketconditions.
This market positioning,says CEO David Hurwitz, is yielding positive results, with Nutun’s earningsfor this financialyear growing at a higher rate than historic levels.
WeBuyCars, on theother hand, continues to gain market share, having exceeded its medium-termtarget of10,000vehicle salesa month in the first half of the year.
Thisgrowthhas,in part,beendrivenby the expansionof itsphysical footprint.It has launched five new branches this year, including alarge vehiclesupermarket atThe Dome in Johannesburg with a capacity of 1,400 bays.
Thebusiness plansto establishphysical dealerships across thecountry, which will
varyinsizeand structurebasedonmarket demand in the region.
The outlook for the used vehicle market in SouthAfricaremains positive,saysHurwitz. “There areabout 11-millionpassenger vehiclesin circulationinSA,with growthof between 2% and5% a year overthe past decade.The globalsupply ofnew vehicleshas recovered,which supportscontinuedgrowth in SA’s vehicle ‘car parc’ and, in turn, benefits used vehicle trading.”
“Parc” is a European term for all registered vehicleswithin adefined geographicregion, originating fromthe Frenchphrase parcde véhicules,meaning thecollective numberof vehicles or a vehicle collection.
He says cash-strappedconsumers trading down tomore affordable usedvehicles will drive future growth. “Vehicle ownership is an aspirationthatis deeplyrootedinSouth
➛ From Page 21
African culture,” he says.
WeBuyCars’ proprietary data, tech and artificial intelligence capabilitiesenable it to make rapid adjustments to market pricing and this, combined with its high inventory turnover rate,reduces theimpact ofadverse vehicle price movements.
Over the medium-term, says Hurwitz, earnings from WeBuyCarsare expected to continue to grow at higher rates than before.
Over the past twodecades, SA Taxi’s businessmodelhasevolved fromaspecialityfinancier withinthe minibus taxi sectorinto a vertically integratedmobility platformofferingaccess tominibustaxi ownership,finance, insurance and maintenance.
SA Taxi’s earnings this year have remained below 2021levels. Macroeconomicheadwinds including rising fuel and energy prices, inflationary pressures, rising interest rates, poweroutagesand persistentlyhighunemploymenthave placedpressure onminibus taxi operator profitability, resulting in finance andinsurance instalmentaffordabilityconstraints. And, though commuter activity is increasing, it is not expected to reach pre-pandemic levels in the short term.
SA Taxi’searnings were alsoaffected by Toyota’s productioncapability, whichconstrained the business’s abilitytogrowgross loans and advances.
Encouragingly, demand fornew minibus taxis and SA Taxi’s pre-owned quality renewedtaxis(QRTs) continuestoexceedprepandemic levelsand remainsfar higherthan supply, says Hurwitz.
Vehicle ownership is an aspiration deeply rooted in South African culture
David Hurwitz Transaction Capital CEO
“SATaxihas builtcapacitytorefurbish QRTs from 280 a month in 2020 to about 400 amonth,while increasingaccesstospare parts by enhancing its import processes.”
This increasedrefurbishment capacity will supporthigher QRTvehicle supplyand, in turn, grow QRT loan origination, he says. It’s astrategy which partiallybuffered the businessfromtheimpact oftheToyotaplant closure afterextensive flooddamage earlier this year.
Inthe yearahead,thebusiness plansto optimise its core minibus taxi lines.
In2022, thecompanylaunched GoMo,a used vehicle mobilityplatform, which leverages offSA Taxi skillsand systemsto underwrite, fund,collect, repossessand designfinance and insuranceproducts. It also leverages off WeBuyCars’ access to low-cost distributionatscaleand abilitytovalueand liquidate collateral efficiently.
GoMo aims to disruptand capture market share in an underpenetrated used vehicle finance and insurance sector.
Hurwitzsays GoMohasreceived avery positive response from themarket with the number of loan applications being significantly higherthan expected. “We expect GoMo tobe beneficialto WeBuyCarsand to increase volumes traded aswell as drive higher penetrationof financeand insurance products, particularly onolder vehicles whichare nottraditionally financedby banks.”
Transaction Capital successfully completed an acceleratedbookbuild in September 2022,raising R1.28bn ofadditional capital. Thebookbuild wasoversubscribed, highlighting just how strong shareholder support for the business remains.
Hurwitz believesthe group’s well-diversified portfolio of businesses is strategically and operationallyrelevant, resilientand agile.
“Based on our current assessment of operating conditionsand growthprospects, we expect organic earnings growthover the mediumterm tobeat leastinline withhistoric growth rates,” he says.
WeBuyCars showroom at The Dome in Johannesburg, with a 1,400 bay capacity. Picture: Supplied
