London, England — 05 August 2013 – The loss-making platinum industry of South Africa should have pushed through the mechanisation of mines years ago to avert its current problems with restive unions and soaring wage demands.
So says Brad Mills “’ chief executive of Lonmin, the country’s third-largest platinum producer until 2008 “’ adding that firms had to start the effort now or remain confronted by a large, highly unionised workforce, reports Fin24.
“My view was, this is a 15-year process but you’ve got to get your head out of this trap,” Mills said, “And the only way you’re going to do it is to convert and mechanise, as painful as that might be.”
Unlike coal and copper, transformed by automation and remotely controlled equipment, platinum mines remain labour intensive. The rock is drilled, blasted and cleared by men.
As Lonmin chief executive from 2004, US-born geologist Brad Mills led a push to take machines into Lonmin’s narrow, sweltering shafts. But progress was slow, costs were steep and he was ousted in a boardroom coup.
His efforts were reversed and some mine analysts say the opportunity has now passed.
“Given what’s happened, it was exactly the wrong decision. The whole disaster they’ve had has been with the rock drill operators, which is the guys you get rid of when you mechanise,” he said in an interview here. “Machines don’t come up to you annually and want 15% more salary to do their job.”
Profits at South Africa’s platinum producers slid last year after a wave of strikes during which dozens of protesters were killed.
Many companies are still struggling to resume generating cash, especially at a time of weaker prices. Mining companies are now locked in some of the toughest wage negotiations since the end of apartheid in 1994.
Source: Fin24. For more information, click here.