One of the biggest assets of mid-tier platinum miner Royal Bafokeng (which recently delivered a 33 per cent increase in interim headline EPS) is its relationship with both employees and the leadership of the union that represents them – NUM. So much so that RB Plats was a pillar of work force peace, stability, and production-as-usual on the recent strike-torn platinum mining landscape in the North West Province. In this interview with Alec Hogg – which was temporarily upended by breaking news of the Orkney earthquake – CEO Steve Phiri confirms investment of his own time in ensuring that employees are happy. “I do it personally, but I also take my EXCO along,” he says. Meanwhile, the strong RB Plats relationship with NUM is reflected in a recently-signed five year wage agreement with the union – an achievement which Phiri ascribes to the quality of NUM leadership at the mine. Yes, there is a chance that AMCU could step into the frame, but he doesn’t see it as a risk because of the excellent service that NUM leadership on the mine is delivering to employees. Speaking on equal terms, and understanding each other, is key to solving problems that may arise, says Phiri. An exceptional housing scheme – for which workers themselves chose the site, the plan and the home designs – is clearly another factor which sets RB Plats aside as an employer. – GK
ALEC HOGG: Well, one of the platinum stocks that you’d like to be invested in is Royal Bafokeng, which reported a 33 percent increase in interim headline earnings per share when all around them are collapsing. The Chief Executive Steve Phiri is with us in the studio. Well Steve, you avoided the strikes. You managed to continue operating when Impala and Anglo Platinum (in your region) were having big problems. The reason for this, no doubt, is your relationship with the trade union and I say the trade union because National Union of Mineworkers seems to be a lot more mature and easier going than the AMCU guys. Is there any possibility that AMCU might get a majority on your mine?
STEVE PHIRI: Firstly, thanks for the compliment ‘it’s a company to invest in’. I wouldn’t want to compare our National Union of Mineworkers with AMCU as distinct institutions but certainly, I would possibly compare our branch leadership (National Union of Mineworkers) at the mine with other leaderships you’d find in other operations. I need to give credit to the quality of the leadership.
ALEC HOGG: My question is more important, from an investor’s perspective. Is there any risk that AMCU can take over the control of the labour at your mine?
STEVE PHIRI: I wouldn’t say there’s no chance of that. I wouldn’t call it a risk because we practice freedom of association and we allow any union that can prove that it has a following and has raised the recognition threshold, to come in and organise within our mine. It’s a Constitutional dispensation in this country, because we will be falling foul of the law if we were to say ‘no’. However, with the strong leadership that we are consistently seeing at our mine, and the servicing of the members… The strength of a union is in how they service their members, look at their interests, and address them. It’s going to be quite a tall order for them to do so.
ALEC HOGG: Steve, forgive me, but I’ve been told we need to interrupt to get an insight into what exactly happened with that earth tremor that all of Johannesburg and Pretoria is talking about. On the line… Help me out here, guys. Mr Smith is on the line here. Mr Smith, would you give us some insight into what it actually was that we felt?
MR SMITH: Hello and yes, it was definitely a tremor of sorts – an earthquake. I’m sitting here in a fairly central part of Johannesburg and it did continue for about three to five seconds, so it’s definitely some significant seismic event, some sort of energy release within the crust of the earth that caused some sort of tremor or earthquake.
ALEC HOGG: Is there any need for concern?
MR SMITH: I would not say so. No. The really large earthquakes that you get that cause significant damage are usually related to plate tectonic processes and South Africa is surrounded by what we call a passive margin, so there are no plate tectonic boundary anywhere close to South Africa. I wouldn’t be too concerned. This was most likely some type of deeper level collapse, maybe the collapsing of old mine workings or possibly the collapse of some deeper-seated dolomite sinkholes. It’s most likely old mine workings that collapsed in the deeper level of the earth.
ALEC HOGG: So we can all take a deep breath and move on. Thank you to Electra from UJ – Bertus Smith. It’s back to Steve Phiri now. The two big issues here I guess, that we have to concentrate on: (1) is Employee relations and the old Impala Platinum learned this to their cost. Then they had Steve Kearney fixing things and then Steve Kearney left and it went back to problem times. You invest a lot of time, energy, and effort in making sure that your Employees are happy.
STEVE PHIRI: A lot of time… I do it personally, but I also take my EXCO along. Last week, I spent the whole day – Friday – at the mine, talking to various levels of workers.
ALEC HOGG: What do they want to know from you?
STEVE PHIRI: Simple things, such as the CEO always asking ‘how is life going’. It makes them really appreciate and feel grateful because some of them had never seen a CEO with the naked eye. Some of them would ask whether the CEO actually existed…
ALEC HOGG: A cardboard cut-out somewhere?
STEVE PHIRI: Fundamentally, our relationship is based on simplicity and humility from the top to the bottom, and underlying that is respect and mutual trust. Once you build that foundation, you can sort out any big problem that you encounter because we’re speaking on equal terms, understanding each other.
ALEC HOGG: And action, as well. I was intrigued to see that you handed over 213 houses to your Employees. I’ve seen the operation. I’ve driven around the village near RB Platinum and the houses are good.
STEVE PHIRI: They’re beautiful houses.
ALEC HOGG: They aren’t RDP houses…..
STEVE PHIRI: And the site, the plan, and the designs were chosen by the workers themselves. Obviously, there was a lot of interaction to say ‘guys, lower the cost a little bit here and there’. They’d say ‘we want this in our housing’. We want an investment for our members so that post their employment with RP Plat they can trade this asset. It’s an investment for them.
ALEC HOGG: We’ve said it before. You are leading the way in the Employee relations there, Steve, and congratulations on that.
STEVE PHIRI: Thanks.
ALEC HOGG: Where you’re not leading the way though, is this tax issue with SARS. We talk about it every time we meet. There’s a lot at stake here – R437m. Any closer to a resolution?
STEVE PHIRI: No, we’re nowhere close to a resolution. The circumstances remain the same. We’re still confident in the probabilities of success in the matter. We have engaged a legal team led by the senior council. We’re still speaking to SARS on the hand. We have applied for suspension of payment post the resolution of the issue and we have filed an objection. That’s the status, currently.
ALEC HOGG: Steven Phiri is the Chief Executive of Royal Bafokeng Platinum, the stock that right at the top of the program, you would have heard Piet Viljoen saying he owns the stock and he’s still and he’s holding.
STEVE PHIRI: That’s good.
