Anglo American : Mark Cutifani’s keynote speech at Joburg Indaba 2020

JOBURG INDABA 2020

Keynote address by Mark Cutifani, Chief Executive of Anglo American

Wednesday, 7 October 2020

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South Africa's decade of promise

Mining's role in helping South Africa build back better

Wednesday, 7 October 2020

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Acknowledgements

Thank you for that warm introduction, Bernard. Let me start by congratulating Paula, for gathering all of us over the next two days. The Joburg Indaba, now in its eighth year, is such an invaluable platform for promoting and celebrating South African mining.

It feels odd to be talking to you virtually. One of the things I enjoy the most about this Indaba usually, is the conversations we have - often over a cup of coffee or a glass of wine - at the Inanda Club. But I take comfort in the fact that we can gather online to share our views on how we can best move South Africa's mining industry forward.

Introductory comments

The past few months have been undoubtedly trying for all of us. No one could have imagined just how severe the effect of Covid-19 would be on almost every aspect of our lives and on economies.

The mining industry stands out in its continued response to the pandemic. We can all be proud of the enormous effort we've made as an industry to safeguard the lives and livelihoods of our people, and nowhere more so than in South Africa.

But we're not out of the woods yet. We know that the pandemic and its effects are going to be with us for a long time. In South Africa's case, the country has had to battle the longstanding challenges of poverty, inequality and unemployment, which have all been further exacerbated by the pandemic.

Outside of the unparalleled goodwill and collaboration that we've seen over the past while in South Africa, we have also seen other headlines that tell a different story about the "own goals" South Africa continues to score against itself.

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It has become standard for us as the mining industry - and business more broadly - to make a case for urgent reforms for South Africa's present, and future. Sometimes, it feels like we're repeating the same script, over and over again, anxiously waiting for the change we desperately need.

But there is something about this moment that is different. We are at a crossroads. We can continue on this unsustainable path, or we can seize the day to turn the corner.

When it comes to South Africa, and its mining industry more particularly, I am ever the optimist. I am aware that there is much chatter at the moment on whether the past decade should be classified as South Africa's "wasted years".

And while the past ten years have been less than ideal, we need to set our eyes firmly on the future. This is why, today, I would like to talk about South Africa's next decade of promise- how we can turn that into real delivery and how I see the mining industry helping to secure the future of this great nation ‒ for the next decade and beyond - to help South Africa build and grow its way out of this crisis.

Our starting point - The importance of the "Long View"

As miners, we are used to thinking about the long term. Our way of doing business is built on sustaining ourselves not only for today, but tomorrow and for the long term.

I think we should apply the same thinking when it comes to the future of South Africa. Developing an appreciation for the "long view" might help us. If we look at the past ten years, we have had more missed opportunities than successes.

For instance:

• We have spent the past ten years desperately trying to navigate our way out of an uncertain and unworkable policy environment for mining - through much legal activity and debates;
• During this time:
• 1. Mining production has been stuck in levels last seen in the early 2000s due to logistical constraints, such as inadequate rail capacity and poor energy supply;
  2. Large-scaleinvestment in the South African mining sector has stagnated, even though there are flashes of recovery; and
  3. South Africa's mining investment attractiveness has remained in the bottom half of mining jurisdictions ranked globally

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But not all was lost. We also have some encouraging green shoots, and these can serve as a catalyst for the next decade. Three things stand out for me in this regard:

• In February this year, the Minister of Finance announced measures to facilitate cross-border financial transactions to provide multinational companies in South Africa with increased flexibility to manage cash resources optimally. This development levels the playing field with other OECD nations and is a significant further positive step towards building South Africa's attractiveness as a globally competitive investment destination.
• Just two months ago, Minister Mantashe withdrew the government's appeal on "the continuing consequences of previous empowerment transactions" under the new Mining Charter. This is a major development and one which should fill us with optimism as an industry - or at least for those that can bring new capital and growth to the industry.
  While there is still a lot that can be done to bring more regulatory certainty, this move paves the way to legal certainty over the current Mining Charter, which further strengthens our collective commitment to transformation as an industry.
• Over the past year, Eskom and Transnet, the two most critical state- owned enterprises that are vital for our success as an industry, have undergone massive changes under new and committed leadership. Getting our crucial infrastructure, in the form of reliable energy supply and adequate rail and port facilities, will take time, but the building blocks are being laid.

So, if we take a step back and discount the noise, we have more reason to believe in the future and success of the mining industry. I believe that the next decade is going to be crucial for the mining industry and South Africa. We have a unique opportunity to build a modern, inclusiveand equitablemining industry: this is South African mining's great promise. And all of it can be achieved within the next ten years. But we cannot postpone it any longer. Together, we can "build back better".

Which brings me to my first point: we need to build a modern mining industry if we're

going to succeed in the future

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