In 1973, Bothwell Mazarura was born in rural Zimbabwe in a place called Murewa in the Mashonaland East Province. He grew up surrounded by acres and acres of endless land, enveloped by long pale green grass, umbrella-shaped trees and the freshest air imaginable. His father was an agricultural officer who would wake up each morning, jump onto his motorcycle and ride around the province visiting farmers.
There was something about his father, about farming and about making a living off the land that inspired Bothwell to pursue the career he has today. The notion of Africans thriving off the blessing of land, what is above it and what is beneath it, is the unerring nexus for farming and mining.
Bothwell’s journey from ‘plough and cow’ to ‘chuck it and truck it’ entailed moving to the capital city Harare where his education journey took him to St. George’s College. It was there that he heard about the accounting profession and decided to apply to join Deloitte’s trainee programme. He joined the firm in 1993 and was deployed to a number of mining audit engagements, including that of Anglo-American’s nickel operations in Zimbabwe. He later moved to South Africa and left auditing for mining.
Ore to Awe
In September 2017, Bothwell took up the CFO position at Kumba Iron Ore, which is part of the Anglo-American Plc Group. His appointment was part of a shake up in the leadership of the company, which included Themba Mkhwanazi’s appointment to the role of CEO a year before.
‘When I joined the company, the key thing was to ensure we were sufficiently competitive from a margin perspective to withstand the commodity price cycles,’ Bothwell explains. ‘In 2017 Themba conceived a great strategy called Tswelelopele – Ore To Awe, which I helped implement. The strategy has three main premises; extracting full potential from our assets by making them more competitive, extending the life of our mines and expanding our footprint.’
Tswelelopele is Tswana for ‘moving forward’ and Kumba has indeed been advancing ever since its conception. One of the major targets set was saving R2,6 billion within five years. They achieved this landmark within two and a half years. The quality of their iron ore product has also improved, resulting in better pricing in comparison to their competitors. Moreover, the life of the mine at Sishen has been extended from 13 to 19 years and a project for the conversion of the plant to further enhance the quality of their iron ore products has been approved by the board.
Bothwell states that the key to success for any strategy starts with understanding the business, its purpose and its operational context in terms of the environment it operates in. Companies should focus on resilience to ensure that they are profitable and sustainable which allows them to contribute to the preservation of livelihoods.
Sustainability
‘Sustainability is a long-term concept which can be achieved by understanding why you do what you do. For us, it was important to avoid having to go through another massive retrenchment in the future. Having established our strategic direction, it made it easy to take the next step, which is setting up the building blocks. This included finding our competitive advantage which is centred around ensuring we have quality product and extracting it safely and efficiently.’
Given the inherent risks in mining, it is sensible to follow a risk-based approach to setting out your strategy, Bothwell explains. This means performing a careful analysis for potential risks throughout the value chain and determining the elements necessary to manage them.
‘Then it is all about a relentless push to meet the targets you had set for yourself. Where there are setbacks, you need to understand the reasons for them and find ways to compensate for the setbacks. Strategy is also not a static thing; you need to continuously scan your environment and evolve your strategy based on what is happening in that environment.’
An example of how strategy can evolve, relates to how Kumba has approached the diversification of its customer base. For a number of years, the company has had a heavy reliance on sales to China and there was a desire to to have a more balance share of other markets. Prior to the Covid-19 pandemic they had reduced the proportion of sales to China from 80% to 55%. However, China was one of the first countries to re-open after economies had shut down to contain the disease and therefore Kumba adjusted its strategy to increase sales in China which helped protect the business in a challenging macro environment.
‘You need to be nimble as things change,’ Bothwell advises.
WeCare Programme
The corona virus brought about a prodigious dilemma for Kumba management. The company plays such a mammoth role in the Northern Cape economy that if they were to stall operations, the province would be brought to its knees. The mine employs thousands of community members and provides a number of district municipalities with water and medical services.
Bothwell says while the company was unsure how many lives would have been saved by shutting down the mine but certain how many livelihoods would have been threatened if they did. And as protecting livelihoods is the central theme in their purpose, they took the decision to apply to the Minister of Mineral Resources and Energy to permit them to continue with reduced operations under strict health and safety protocols.
In addition, Kumba launched the WeCare programme that undertook community education on preventative measures to halt the spread of the disease. They also provided material support in the form of food parcels, masks and sanitizers. In collaboration with the Department of Health and local government, Kumba also provided critical medical equipment such as PCR testing machines, ventilators, oxygen and quarantine facilities. In addition, the company’s vaccination drive is underway and will initially vaccinate the workforce and later their families.. ‘I believe we have done right by our people since the start of the pandemic and this is a personal highlight for me,’ Bothwell states.
This article is an extract from the book ‘Masters of Money – Strategies for Success from the CFOs of South Africa’s Biggest Companies’ available here – https://www.takealot.com/masters-of-money/PLID90121297?gad_source=1&gclid=CjwKCAiAyp-sBhBSEiwAWWzTnmLGsW3EWthrsEzrN69lcPhFqkxkQjPsxSF6CHoP2oj6-XRBtDB5gBoCfA8QAvD_BwE&gclsrc=aw.ds
