“Losing hundreds of millions of dollars was the right thing to do”
In 2007, shortly after being named CEO of South African mining conglomerate Anglo American, Cynthia Carroll made a snap decision that would prove costly. Here, she traces the chronology of that act — and how her bold move set a new standard for the entire mining industry. Ms. Carroll spoke at a panel discussion held at Columbia Business School on September 20th. The discussion was cosponsored by The Chazen Institute for International Business and The Eugene Lang Entrepreneurship Center.
“When I started [with Anglo American] and looked back at the prior years of operation, we had literally hundreds of fatalities, largely in Africa but in many other countries as well. Everybody kept telling me, ‘Cynthia, this is inevitable. It's part of the mining industry. People die and you have to get used to it.’ It's not an approach I could ever subscribe to, and I made that perfectly clear. I would not lead a global organization where people are being killed, with no intense effort and commitment on the part of management all the way down the line willing to do something different.
“A couple of months after taking my position, I was out visiting various platinum mines. We mine miles underground under very challenging working conditions: dark, wet, hot, and it gets more difficult as we go deeper underground. At the end of the day the CEO of one of these operations tapped me on the shoulder and said, ’Cynthia, we've had another fatality.’ I turned around and said, ‘That is absolutely it for me. We are shutting down this mine.’ The CEO said, ‘We've got to think about it and talk about it,’ to which I responded, ‘We're not talking about anything. You're going to notify your executive team immediately and tell them to start repairing.’ We brought 28,000 people up out of the ground; it's the largest platinum mine in the world. We lost thousands of ounces of platinum, and at $2,000 an ounce, the cost is pretty substantial. Hundreds of millions of dollars were lost in 2007 as a result of the decision that I took. I didn't ask anybody, I didn't talk to my board.
“It sent shockwaves through our Anglo American system. The platinum industry was turned upside down in a heartbeat. Yet despite the fact that I was starting to see some heightened awareness of standards and doing things differently, I knew that we couldn't make a breakthrough if we didn't engage and reach out to others with a vested interest. I went to the [South African] mining minister for support and said, ‘We've got to stand up for the issue of safety in this country.’ She told me I was out of my mind because it would expose Anglo American's pretty awful track record, although it was like everybody else's. It would also put great pressure on us to stick our heads out and commit to a very different standard.
“But we did it anyway. As a result, our fatalities have come down by over 60 percent. Our lost time due to injuries has come down over 70 percent. Fundamentally, our safety performance in South Africa has significantly improved. It's still not where it needs to be; it would take no fatalities and no injuries for me to be satisfied. I think [our actions] have uplifted the entire industry, and made us more competitive. Last year, we reduced the number of employees in one business alone by about 22,000 people, and we did it without a single walkout or strike. I think everyone is aligned in support of trying to do the right thing in the long term.”