Platinum CEOs say mechanisation not a panacea – by David McKay ( – February 27, 2015)

THE mechanisation of mines has become a buzzword in the South African mining sector construed as something of a panacea for investors especially in the platinum sector where estimates suggest two-thirds of production is still cash negative.

For unions, however, mechanisation implies looming job cuts. According to Chris Griffith, CEO of Anglo American Platinum (Amplats), the Anglo American listed subsidiary, mechanisation is neither quite of these things entirely, although he acknowledges there’s a long-standing debate on the effect of mechanisation and the impact on jobs.

“[I]t is common cause that better productivity is better for the economy,” said Griffith in a presentation at the Mining Indaba conference earlier this month. “Jobs don’t get lost – they get created in new areas,” he said, adding that mechanisation was “… a social and economic imperative”.

Tell that to Lonmin shareholders who witnessed the efforts of former CEO, Brad Mills, who pioneered mechanisation from about 2007 at the group’s operations with the intention of taking mining costs down to 35% of total costs from 65% at that time. It failed and cost him his job.

Said Griffith in an interview with Miningmx: “Mechanisation is not universal panacea; sometimes it’s not the solution. At Lonmin, it was at an early stage of mechanisation but we’ve had a long history since then.

“We’ve also had failures where we’ve tried to retrofit mechanisation at conventional mines. So it’s a combination of what we’ve learned on positive and negative things. Where we’ve chosen to mechanise, we’ve had success,” he said.

Terence Goodlace, CEO of Impala Platinum, is perhaps a tad more sceptical of the mechanisation, at least in respect of the extent to which it can be applied at the firm’s giant Lease Area in Rustenburg.

“We have certain areas open to mechanisation, but it’s not a universal solution,” he said in response to questions at the firm’s interim results earlier this week.

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