LIFE OF SIPHO
Nkosi holds an MBA degree from Massachusetts University. He set up Eyesizwe Coal in 1998 and from there did the deals that eventually led to obtaining control of Exxaro.
Web Address: http://www.exxaro.com/
Black empowerment has not been getting a good press lately. There's a growing and well-informed suspicion that behind many headline-grabbing BEE deals lies very little real transformation.
And this week the hopes of black empowerment mining company Khumo Bathong went pear-shaped with the announcement that East Rand Proprietary Mines in Boksburg, in which it holds 60%, will be closing thanks to the hammering our strong currency has given to earnings.
However, away from all the grandstanding, one company is quietly and consistently giving the lie to whatever notion one might have that true BEE is nowhere to be found.
This is Eyesizwe Coal, an empowerment company put together over a three-year period from 1998 through to 2000 from a piece of Billiton-owned Ingwe Coal and Anglo Coal.
The man who grabbed the opportunity with both hands when it came along is Eyesizwe chief executive Sipho Nkosi. He was working with Anglo Coal at the time and put together the team that won a tightly contested bid to buy New Coal, which was owned jointly by the two coal mining giants.
Recent news is that Nkosi, who says he prefers to stay away from the headlines as much as possible, is about to clinch a deal for a 26% stake in Sasol's mining operations.
Insofar as the deal is meant to enhance Sasol's empowerment credentials, CEO Pieter Cox couldn't have made a better choice.
Mineworkers' Union boss, Gwede Mantashe, who does not hand out bouquets easily, rates Eyesizwe as the best BEE company in the industry.
"To me, it is the perfect example of what should be done and what can be done," says Mantashe.
Professor Johan Rall of Unisa's Graduate School of Business Leadership recently completed a "climate survey" of Nkosi's company and described it as a "model of transformation". He was so impressed that he asked if he could publish his results as a case study for other companies but Nkosi, out of modesty rather than pigheadedness, said no.
"We haven't finished yet," he explains. "We can still do a lot better."
What particularly impressed Rall was that in the process of transforming the company from being completely white-owned, controlled and managed, Nkosi had achieved the "incredibly difficult" feat of developing at Eyesizwe a "very, very committed workforce from the highest to the most junior levels, white and black".
When Eyesizwe started, all four of its mines were run by white managers. Now two of them, including Matla, its biggest mine which produces 15-million tons a year out of Eyesizwe's total production of 25-million tons, are run by black managers.
And they're there because they're good, not just because they're black.
One has more than 25 years experience with Sasol and De Beers on mines in Zambia and Zimbabwe. The other "we stole from Sasol, brought him here and trained".
The other two mines have white managers, including one who has just been promoted to that position.
"The balancing act is important," says Nkosi, who sits behind a fabulous red leather-topped desk he nabbed for himself when the chairman of Rand Coal (which became part of Ingwe in the pre-Eyesizwe days), John Hall - in charge of peacekeeping during South Africa's first democratic election - retired.
"Nobody else seemed to want it, so I took it," says Nkosi with a happy smile.
"When we moved in there was fear on the part of the whites that they'd be dismissed."
Nkosi's first act was to embark on roadshows to assure them that their jobs were safe. In return, he asked them to help him train young blacks, explaining that transformation of the company was non-negotiable.
He assured whites they'd continue to be promoted. "And you promote them. On merit. I have to tell the black guy, you're not there yet, work a bit harder and we'll promote you. The balancing act is very, very important."
Nkosi says that key to transformation has been managing white fears as well as the expectations of black staff, who' ll "think that because it's now a black-owned company the world is their stage and they can just walk in. No, it's all through merit. You cannot just walk in. That's what we're emphasising."
At the same time, he's doing everything he can through bursary schemes to send youngsters - black and white in proportion to the demographics of South Africa - to university to become mining engineers, mechanical engineers, chemical engineers, geologists and accountants.
He says that 30% of senior managers are now black, and these are people in highly specialised positions exercising full operational control in their areas of expertise.
This may not sound very dramatic, but he is building for a long future, he says, and wants to be sure he has the right people.
"It's going to take a long time, it's not going to happen overnight."
Nkosi makes a point of being interactive with the unions. Mantashe praises him for his accessibility but doesn't necessarily make Nkosi's life any easier out of gratitude.
Says Nkosi: "I go to Gwede's office and he craps on me all the time."
Last year the NUM even threatened him with strike action.
Top of Nkosi's priorities is staying in touch with his staff at the mines, black and white.
A month ago he was at the Arnot Colliery near Middelburg.
"My mission was just to talk to white folk and see how they're doing. Even though we're a team, there are fears that will always be there. So we talk about them. We break bread and they tell me about things. And you deal with those things."
He also gets together with his black staff as often as possible. "They fight with me and call me all sorts of names and I deal with their problems. Conditions of employment will always be problematic - housing, salaries, bonuses, how you manage HIV/Aids. I'll never say we're perfect, but we're trying."
Nkosi was born in Vryheid, Kwazulu-Natal. After getting a BCom degree at the University of Zululand, he worked as a market analyst for Ford Motors in Port Elizabeth but lost his job when they disinvested in 1984.
He got a USAid scholarship to study for an MBA at the University of Massachusetts in the US. From there, in 1987, he was recruited by Anglo American to work in their coal business on the marketing side. After five years he left for an 18-month stint in the insurance industry, but returned to coal mining with Trans Natal, where his job was to look at opportunities in developing markets such as India, Malaysia and South America.
He joined the power generation division of Swiss company ABB (Asea Brown Boveri) in South Africa. Then came the chance of a lifetime - to transform New Coal into Eyesizwe.
Two of its mines are Eskom-tied, one produces for the export market and one for industrial supplies in South Africa.
Last year Eyesizwe produced 25 million tons, making it the fourth-largest coal producer in South Africa and the third-largest supplier of coal within the country.
It exports only about 2% of output but this contributed 25% of revenue in 2002. The strength of the rand has reduced the percentage to 15% but this has been balanced by "incredible export prices".
Two years ago coal was $20 a ton. Because of increasing world demand it is more than $60 a ton today, which is why Nkosi's focus is on growing Eyesizwe's export business for all he's worth.
The obstacle is the tiny access Eyesizwe's 1.2% shareholding in Rich ard's Bay Coal Terminal allows it. Through his deal with Sasol (which will also afford access to its worldwide synfuel markets) and another with Kumba Resources, Nkosi hopes to increase access to the facilities and realise his goal of exporting 10 million tons within five years.
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