13 November 2009
column
Johannesburg — FEW things highlight the extent of the problems facing SA's gold mining industry as the somewhat ironic news yesterday that, as the gold price broke another record, production in September fell 9,3% year on year.
Gold rose to 1222,80, continuing its extraordinary bull run that has seen it more than quadruple in value in about 10 years. Yet our gold mining sector is not exactly reaping the full benefits.
The systemic problem is that we have deep-level mining in SA, which makes it far more expensive to extract the ore than shallow or open-cast mining. That means margins are always tight, but the higher gold price has been largely negated by rand strength. Eskom's electricity supply problems have also not helped.
Meanwhile, the elephant in the room is that SA's gold mines are ageing and producing lower and lower ore grades.
All in all not a good outlook for a sector that thought things were bad when the gold price seemed stuck well below the 300/oz mark in the late 1990s but cannot flourish with the price more than four times that level.
THE crisis at Eskom and now also at Armscor illustrate perfectly one of the best arguments against nationalisation. In a private company, decisions might be made incorrectly or management judgment calls might be wrong, but at least the lines of authority and the main aim of the organisation are usually pretty much agreed.
But in public companies their duty to be profitable, like a private company, or serve the public, like a government, can cause terrible confusion.
The Eskom saga was complicated enormously by the political undertones of the issue to the extent that it is effectively unclear whether the board had the legal authority to accept the resignation of the CEO. It is often said that the board should instruct the CEO where it wants to go, and leave it up to management to decide how to achieve that aim.
It's rather like appointing the captain of a ship. The board can tell the captain to sail to Cape Town, but should refrain from making day-to-day decisions on how to get there.
Eskom's problems have been compounded by micromanagement, particularly micromanagement with political rather than operational goals.
FOR those taxpayers who have still not submitted their returns, the South African Revenue Service has warned that it will not extend the November 20 deadline.
Don't let trepidation of dealing with its call centre put you off getting it done.
A recent caller found the centre to be extremely efficient. She was told that she was caller number 51 when she got through, then had to wait for less than a minute to speak to a real live person.
And before that, the machine- voice kept updating her where she was in the queue. Its list of options were clear, directing her quickly to where she had to go (income tax) "and it didn't make you fearful that the call would be dropped", she says.
The real live person who dealt with her problem was also efficient. She understood the caller's issue, knew how to deal with it and was polite and friendly.
The operator even warned the caller that e-mails she had received about a tax refund were a scam. "She told me SARS would never send e-mails to taxpayers about refunds. She was very knowledgeable."
Well done to SARS. Over the years it has simplified the income- tax process, and gathered far more taxpayers into its net. But by improving the processes for dealing with the public to such a degree, it has gone that one step further -- a step that the call centres of many private sector companies would do well to emulate.
It is rather bewildering why private companies that rely on their customers for their income institute call centres that seem designed to do little else other than infuriate their customers and keep them as far away as possible from real people.
The Bottom Line is edited by Colin Anthony.
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