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Picture: SUPPLIED
Picture: SUPPLIED

In just two years we have transitioned from grappling with a pandemic to navigating the complex implications of Russia’s war in Ukraine. The global economy in which we all operate is characterised by geopolitical shifts that we haven’t seen for a generation or more, security concerns, an uphill battle against inflation, volatile energy markets, and a haze of uncertainty surrounding China’s economic recuperation post-pandemic. 

Yet, even in the face of these formidable challenges, countries with mining industries are presented with unprecedented opportunities. For the industry itself, building resilience in these turbulent times is not just critical for its sustained growth and vitality, but also for our host nations to be set up to prosper from the full benefits that can be unlocked through the global economic transition that lies ahead, with mining front and centre. 

When I took up my role as CEO of Anglo American last year I was clear that the only way to navigate the volatility we face is to keep our feet firmly on the ground. We have done this by building focus and momentum on operational stability and targeted incremental performance improvement. But I was also clear in my mind that never has mining been needed as urgently as it is right now. 

Mining’s opportunity 

Simply put: the world needs more mining, not less. We see three major demand trends spelling the need for more mining. First, the driver the whole industry is focused on: for the world to limit global warming to 1.5°C above pre-industrial levels we need a rapid acceleration of global climate change mitigation efforts.

This includes the deployment of low-carbon energy and transport technologies that will underpin an increase in demand for a range of mined products, including copper, nickel and platinum group metals (PGMs). And let’s not forget iron ore for steel. Without a far larger supply of these critical raw materials we will not achieve the Paris goals — it’s as binary as that. 

Second, when you look at the global population we expect 2-billion more people over the next 25 years, with an associated pull for higher living standards. People have everyday needs such as homes, energy, infrastructure, appliances and mobility. It is the products of mining (together with energy and food) that enable the economic development that helps lift people out of poverty — it simply cannot happen without responsibly produced metals and minerals. 

Third, 10-billion people need to eat, and they want to eat better, so we need to produce an altogether different quantum of food by the time we get to 2050. In fact, on some measures we need to produce more food over the next 30 years than has been produced to date in human history — and from a shrinking area of available and productive farmland.

With those three drivers there is no doubt that we will need a lot more mined metal and minerals — copper, nickel, steel, PGMs — and, of course, more effective low-carbon fertilisers to support this reality. And our task as leaders of this industry is to do more than just make the case for mining.

Our job is to step up and supply many of these future-enabling metals and minerals for a cleaner, greener, more sustainable world, that meets the fast-growing everyday demands of billions of consumers. In a society that seems to believe it is in a post-industrial era, if mining companies don’t make the case for the relevance of the industry, then no-one else will and our ability to deliver will be tougher than it already is. 

But we also need to up our game and live up to our promise of being a safe and socially and environmentally responsible industry. While we are certainly making progress towards that promise, we are still undervalued on various fronts — including in the eyes of the market.

Ours is an industry that requires investment to sustain itself and even more investment to grow, particularly pertinent given the demand picture I’ve just painted. Success in the long term really depends on having the funding to support a sequence of growth options that span the development cycle, from exploration and pre-feasibility through to actual construction.

Yet traditional equity markets don’t appear keen on financing mining, despite an enviable multi-decade demand pull on our products. Something has to give. This is why we invest so much energy in asset optionality and our social licence to bring those options to market at the right time.   

It is not by chance that we have some of the most compelling growth potential in the industry, across our diversified mix of metals and minerals, which are of course the essential products needed for a cleaner, greener world, and to cater for the consumer needs of the world’s fast-growing population. This is an opportunity that we must not lose sight of — even during the volatility we are all facing.

All will agree that these are indeed challenging times for the mining industry — and SA’s economy overall. Many of us across the industry are in the process of making tough decisions to drastically reduce costs, and reconfigure our operations, support functions and wider workforce to ensure resilience. But this is not a time to be despondent. 

SA’s promise 

Beyond our own resilience as an industry, the other important ingredient is the stability and resilience of jurisdictions themselves, such as SA. No country is without its challenges, of course. But in SA’s case we are facing a number of foundational challenges, as we all know.

SA has such extraordinary untapped potential that I know every one of us is frustrated by the roadblocks. As a proud South African I know this is a place truly worth fighting for. The prize is too big, and we owe it to every South African to help the country capitalise on its immense opportunities. 

For quite some time now the mining industry — and business more broadly — has made a case for meaningful change on the things that hold us back in SA. But this moment is different: we are at a crossroads. Do we carry on over the cliff, or do we turn a corner, for the better? 

Next year marks 30 years since the inception of our democracy — and of course we have a lot to be proud of. But we also need to acknowledge that we have a lot to do. We have been hard at work, collaborating with organised business to support government in addressing the three immediate constraints that severely hamper economic growth and stability in SA — crime and corruption, energy, and logistics. 

This is critical because the operating context in SA remains extremely challenging. The increased input costs that businesses face, coupled with national challenges ranging from load-shedding to poor performance in logistics, affect the profitability and sustainability of our business, the mining sector and SA at large. 

Billions of rand of economic output are being forgone every day. And we will never know the amount of investment companies within and outside SA are choosing not to make because of our very real challenges. 

Doing nothing, or simply criticising the state of affairs from the sidelines, will not help. Anglo American is one of the largest investors in SA to this day, and we are part of a significant effort to encourage collective action on the three priority areas I have just mentioned, through initiatives spearheaded by the National Energy Crisis Committee, the National Logistics Crisis Committee and the Joint Initiative to Fight Crime & Corruption. 

I am optimistic that we are managing to cultivate the foundation of partnership with government. But let us not rest on our laurels. We all need to continue to align on the most critical things to do, and then commit to getting them done in the agreed time frames and then hold each other to account for that deliverable. 

There are many issues facing our country. Unemployment and wellbeing are high on the agenda, but unless we get these issues of crime and corruption, energy and logistics right soon we won’t have a foundation to build on for the rest. Ultimately, our goal is to support the creation of the required conditions for the country’s success. This is necessary for business to thrive, but also for society to thrive.

In the face of its challenges it is crystal clear that SA demands nothing less than bold action. Mere intent will not cut it.

This is the time to step up with unflinching resolve and act. This is even more prescient for SA — the mining industry has the potential to transform our economy in terms of jobs and living standards, but that means working together to get the country on a stable footing now. We simply cannot miss this boat again. 

• Wanblad is Anglo American CEO. 

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