African Rainbow Minerals CEO Phillip Tobias
Considering its long and successful history with joint ventures (JVs), diversified miner African Rainbow Minerals (ARM) CEO Phillip Tobias has noted the importance of mutual respect and transparency in JV partnerships.
Speaking to London Indaba chairperson and South African mining luminary Bernard Swanepoel on the second day of the indaba on June 26, Tobias noted that, as a partner in JV operations, it is important to consider the best interests of the JV.
“There’s different personalities . . . different philosophies, so [there is] the need to really make sure that we take our partners along, [as] they take us along,” he said.
He explained that, as a partner, long-term decisions need to consider the best interest of the JV, adding that JV’s call for an influential, as opposed to a positional, form of leadership.
He noted that this meant that, if there are disagreements between the JV partners, the parties must engage with each other. He said that, perhaps after a few engagements, one would be able to convince the partner to agree on a particular stance or matter.
“And at times, you may not necessarily land where you want to land and then you have to regroup and say, how do we move forward from there.”
Regarding capital allocation in the JV space, Tobias noted that ARM has a comprehensive capital allocation framework, whereby the company prioritises investing proceeds into the business, ensuring that operational growth is taken care of.
“So when we have to make an investment decision, you also need to. . . present your case . . . So I think what this calls for …[is] more work . . . one has to do his homework thoroughly, make sure that when you come up with an investment case, you know that you've considered all the scenarios such that when you present it, it must be a very palatable . . . for your partners.”
Tobias noted that ARM was keen to drive mechanisation at its Bokoni platinum mine, in Limpopo.