CAPE TOWN // Under the dusty hills of northern South Africa is a vein of platinum so rich it supplies most of the worlds’ demands – but extracting it takes money, sweat and, at times, blood.
Lonmin, a century-old London registered company, is one of those operating there. Despite its venerable age, the Africa-focused Lonmin remained little known outside mining circles until a terrible day in 2012 when dozens of its workers were gunned down by police during a protest.
The miners were striking over wages and charged towards police who panicked and gunned down 34 of them in full view of television cameras. The incident has gone down as the Marikana massacre, named for the area where the miners held their protest.
Today, Marikana is peaceful again but, underneath the soil, miners still toil to extract platinum. Many had wanted the company to close down after the tragedy. However, more than 35,000 employees and surrounding communities are dependent on the operation and what has followed has been a painful rebuilding process to recreate the business.
"It has been a challenging three years," the executive vice president for human resources at Lonmin, Abey Kgotle, tells The National.
“Coming from the tragedy of 2012, and building a relationship with a new union, has made for a difficult time. But we are getting there.”
In 2015 the company was nearly broke and asked shareholders for support through a US$400 million rights issue. It also had to write down $2.05 billion in assets. As a result the company, valued at more than $13bn at its peak in 2007, was worth a mere $210m by January this year.
Over the past few months, though, it has doubled in value, as work on rebuilding has started to pay off. The miners themselves have been an integral part of it, says Evert Coetzer, who manages one of Lonmin’s most productive operations at Marikana.
“These are tough crews, and we’ve worked hard at putting the right guys together with the right supervisors,” says Mr Evert. “The mood of resentment and anger that emerged from the period of strike unrest has now disappeared. Everyone just wants to get on with the job.”
Putting together men from deeply different cultures, speaking up to a dozen different languages, is not easy and with the killings of 2012 hanging over the company, managers had to be especially sensitive to communication.
“I know it sounds trite but getting everyone to talk to each other and understand where the other guy is coming from has turned things around for us,” says Mr Evert.
The world’s third-largest producer of platinum, Lonmin is a resource institution. It was founded in 1909 to acquire mining rights in northern and southern Rhodesia, now Zambia and Zimbabwe, and for the next century continued to build its mining presence in the region.
Unlike gold, with which it shares the status of a precious metal, platinum has a wide variety of industrial uses. It is the key element of catalytic converters mandated in many countries to keep vehicle emissions low. It is also used in the fuel cells that convert hydrogen to energy, which could some day replace fossil-based fuel in cars and power plants.
The Marikana mines are relatively shallow compared with those operated by the gold producers who often must push below 4 kilometres to find ore. Platinum operations rarely go deeper than a kilometre. Even so, the conditions would put anyone to the test.
Crews operate in spaces as narrow as a kitchen table. Thudding rock drills create holes for charges, in a set pattern determined by the rock engineer. Blasting takes place early evening and, two hours later, the night shift arrives to begin cleaning and removing the ore.
Workers still die doing this. At least three have been killed at Lonmin this year, and more still at other platinum operations in the area.
“It is dangerous but we do it because it’s work,” says Sipho Mchunu, a rock driller at Lonmin’s mine.
“Our families must eat and they wait for us to come home. This is why we do it.”
business@thenational.ae
Follow The National's Business section on Twitter
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Brief scores:
Toss: Kerala Knights, opted to fielf
Pakhtoons 109-5 (10 ov)
Fletcher 32; Lamichhane 3-17
Kerala Knights 110-2 (7.5 ov)
Morgan 46 not out, Stirling 40
The specs: 2018 Nissan Altima
Price, base / as tested: Dh78,000 / Dh97,650
Engine: 2.5-litre in-line four-cylinder
Power: 182hp @ 6,000rpm
Torque: 244Nm @ 4,000rpm
Transmission: Continuously variable tranmission
Fuel consumption, combined: 7.6L / 100km
A new relationship with the old country
Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
What should do investors do now?
What does the S&P 500's new all-time high mean for the average investor?
Should I be euphoric?
No. It's fine to be pleased about hearty returns on your investments. But it's not a good idea to tie your emotions closely to the ups and downs of the stock market. You'll get tired fast. This market moment comes on the heels of last year's nosedive. And it's not the first or last time the stock market will make a dramatic move.
So what happened?
It's more about what happened last year. Many of the concerns that triggered that plunge towards the end of last have largely been quelled. The US and China are slowly moving toward a trade agreement. The Federal Reserve has indicated it likely will not raise rates at all in 2019 after seven recent increases. And those changes, along with some strong earnings reports and broader healthy economic indicators, have fueled some optimism in stock markets.
"The panic in the fourth quarter was based mostly on fears," says Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management Company. "The fundamentals have mostly held up, while the fears have gone away and the fears were based mostly on emotion."
Should I buy? Should I sell?
Maybe. It depends on what your long-term investment plan is. The best advice is usually the same no matter the day — determine your financial goals, make a plan to reach them and stick to it.
"I would encourage (investors) not to overreact to highs, just as I would encourage them not to overreact to the lows of December," Mr Schutte says.
All the same, there are some situations in which you should consider taking action. If you think you can't live through another low like last year, the time to get out is now. If the balance of assets in your portfolio is out of whack thanks to the rise of the stock market, make adjustments. And if you need your money in the next five to 10 years, it shouldn't be in stocks anyhow. But for most people, it's also a good time to just leave things be.
Resist the urge to abandon the diversification of your portfolio, Mr Schutte cautions. It may be tempting to shed other investments that aren't performing as well, such as some international stocks, but diversification is designed to help steady your performance over time.
Will the rally last?
No one knows for sure. But David Bailin, chief investment officer at Citi Private Bank, expects the US market could move up 5 per cent to 7 per cent more over the next nine to 12 months, provided the Fed doesn't raise rates and earnings growth exceeds current expectations. We are in a late cycle market, a period when US equities have historically done very well, but volatility also rises, he says.
"This phase can last six months to several years, but it's important clients remain invested and not try to prematurely position for a contraction of the market," Mr Bailin says. "Doing so would risk missing out on important portfolio returns."
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills