Swanepoel on gold, CEO pay & speaking out

[miningmx.com] – IT’S a rare gift of the gab that can in the space of thirty hilarious seconds slap down one gold company, praise another two, pass comment on Australian sport (and Australians in general), and then ask to be ignored as “a bad loser’.

Sarcasm, aggression, deprecation … Enter Bernard Swanepoel, best known for leading Harmony Gold in the Nineties, but whose latest position in the South African mining industry is as host, sponsor, and driving force of the Joburg Indaba – a conference establishing itself as a place where miners can actually speak their minds.

And they do, abetted by Swanepoel, who whilst introducing the keynote speaker Mark Cutifani, Anglo American CEO, at this year’s Joburg Indaba, said: “I have an admiration for AngloGold, but I’m glad he [Cutifani] didn’t join Gold Fields, or I’d have to find something good to say about Gold Fields [Laughter].

“Neal Froneman [CEO of Sibanye Gold] has shown how Gold Fields assets would have been run if Harmony had owned them. [Nervous titters].

“I’m a bad loser. What can I say,’ said Swanepoel who then went on to observe that Australia’s soccer team always made it to the Fifa World Cup finals because “… they only play New Zealand’ before concluding that Cutifani was the second nicest Australian he knew.

“I know two,’ said Swanepoel. [Laugher resumed].

Even Cutifani, whose oratory is not insubstantial, had trouble following that introduction.

Thus has the sometimes prolix nature of the mining conference circuit been broken by a style of presentation where the questions are as entertaining as the answers.

The Joburg Indaba, now preparing for its third conference in 2015, has been a hit.

Encouraged to shake off the shackles, mining personalities came to the fore. Vali Moosa, chairman of Anglo American Platinum, declared himself “ashamed’ of the five-month strike in the sector that left tens of thousands scrabbling for subsistence. It was a statement that did justice to the role of “independent’, non-executive.

For his part, ANC secretary-general and former trade unionist, Gwede Mantashe, declared that the NUM and AMCU ought to merge. Steve Phiri, CEO of Royal Bafokeng Platinum, said corruption was South Africa’s national sport, while Cutifani himself warned the South African government against practices international investors wouldn’t tolerate.

Said Swanepoel in an interview with Finweek: “I personally thought some of the other platforms don’t live up to open conversation.

“Not only the Cape Town version [the long-standing Mining Indaba, now owned by EuroMoney] but the Lekgotla as well [Government’s public think-tank event]. It’s a case of form over substance’.

That Gold Fields bid

In his own executive career, Swanepoel was rarely a wallflower.

His term at Harmony Gold, for 12 years from 1995, was an exciting ride for investors as he grew the firm from a single mine in the Free State province into one of the world’s largest gold miners.

It ended on August 6, 2007 when, a few years after a hostile bid for Gold Fields failed – hence Swanepoel’s reference to being “a bad loser’ – he quit.

“I have absolutely no regrets. Tracey [his wife] and I celebrate that day, my freedom,’ he said, adding he had no desire to take on the corporate world again.

“I would have been very uncomfortable in the current remuneration environment,’ he said of executive pay. “I think it’s pervasive. It’s a case of “I’m happy with what I earn until I learn what you earn’,’ said Swanepoel who feels increased disclosure only raises the stakes, and rivalry, on what CEOs get paid.

Swanepoel hasn’t replicated the success of the first five years of Harmony Gold. Village Main Reef (VMR), a company that this magazine styled “his comeback’ ran into trouble amid the commodity sell-off. It is now talking to potential buyers of its assets.

Yet he thinks mining entrepreneurs and professional managers will continue to find in the Witwatersrand a business case worth pursuing.

“South Africa will mine gold for 50 more years. It just won’t look like it does today,’ he says.

Part of the current problem for gold miners is the mismatch between the long-term cycles in the industry and the fund managers who, sometimes, measure success on a quarterly basis.

“The cyclical nature of mining keeps on being missed by everyone,’ says Swanepoel. “The cycles are so pronounced.

“I think we’re seeing the same movie with the dollar gold price falling faster than the rand can weaken [so as to offset rising inflation].

“But we are going to see consolidation in the industry. Sibanye was telling moment,’ says Swanepoel referring to the demerger of Gold Fields’ South African assets ito Sibanye Gold, a firm run by Neal Froneman, a former colleague at Harmony, with Harmony-like rigour.

Swanepoel also applauds the work of Srinivasan Venkatakrishnan (Venkat), CEO of AngloGold Ashanti, who has carried on the pioneering work of Cutifani, a former AngloGold CEO, by adopting new mining technology where machines operated five kilometres underground extracting, unbelievably from a gold reef no wider than several school rulers.

“I like the conversation about modernisation of the industry,’ says Swanepoel. “Venkat shows you something they’ve not tried before and it has created 600 jobs. Modernising the mines will create new opportunities.’

The Joburg Indaba is a collaborative effort between Paula Munsie and Thinkspiration in which Swanepoel and his wife Tracey are partners.
“Thinkspiration does in organisations what we did at the Indaba, that is create processes and an environment in which honest conversation about the strategy or the future can take place. We use the power of story and analogy to make the strategy stick.

Beyond mining, Swanepoel is involved in some philanthropic work as well as social entrepreneurship. He is extremely proud of the 20 ‘decent’ and sustainable jobs that Little Green Number has created whilst he assisted a failing charity to convert itself into a sustainable business.

This business supplied the stunning conference bags at the Joburg Indaba, which was all made by self employed people ‘upcycling’ vinal advertising billboards into various useful products.

One activity involves partnering a headmaster of a school in Alexandra.

In ‘Partnership For Possibility’, founded by Louise van Rhyn, senior business leaders are asked to assist headmasters in studying for a diploma through the University of the Western Cape. “I think of it as a thinking partner,’ says Swanepoel. “I’d never tell a headmaster how to do his job, nor could I,’ he says.

Admitting to some “cheque book charity’, Swanepoel said he was inspired to take up the role in Partnership for Possibility by Bobby Godsell, another former CEO of AngloGold Ashanti, who at the 2013 Joburg Indaba spoke earnestly of the need for “active citizenship’.

“I would much rather run a platinum mine in Rustenburg than be a headmaster in Alex. This involvement with Partners for Possibility is the most satisfying thing I’ve ever done,’ he says.

This article first appeared in Finweek