‘I think the industrial relations reforms are going to set back productivity’
SOUTH32’s Graham Kerr navigated one of the stormier years in the company’s eight-year existence. It was forced to scale down operations at its Cerro Matoso ferronickel mine in Colombia due to a benefits-related community protest. At its Mozal aluminium smelter in Mozambique there were two fatalities following an accident. In South Africa the logistical headaches caused by Transnet’s inadequate rail and port infrastructure went from bad to worse in the fourth quarter, adversely affecting manganese ore sales.
The headwinds for its manganese operations started at the end of 2022, when South32 lost 15% of its rail allocation to emerging and junior miners. As a result, large volumes of the commodity had to move from rail to truck transport via roads. Kerr warned it would be difficult for South32 to compete globally if the situation persisted. Another hurdle is electricity generation at South32’s Hillside aluminium smelter. South32 is in a quest to secure lower carbon electricity supply for its Hillside operations. Currently, it relies on Eskom’s coal-fired power stations.
Failing to move to cleaner energy will mean South African-produced manganese will incur cross-border carbon tax for its exports to Europe. South32 is exploring the possibility of procuring electricity generated at the Koeberg Nuclear Power Station, and investigating wind and solar power generation options over the medium and longer term.
There are also challenges on South32’s home ground: Australian miners could potentially face steep increases in labour costs as their government is considering a so-called ‘same job, same pay’ policy, requiring employers to pay hire workers the same rate as direct employees performing the same job. Kerr warned that the policy could potentially harm the industry.
LIFE OF GRAHAM
Kerr, an accountant, holds degrees from the Edith Cowan and Deakin universities in Australia. After his studies, he joined the diversified mining house BHP, where he held positions in South Africa, South America, North America and Australia. In 2015, he was appointed CEO of South32, a spin-off from BHP. Kerr is an advocate for gender equality in the workplace and is director of CEOs for Gender Equity, a grouping of business leaders who lobby for gender equity in Western Australia.