To power the energy transition, mining companies will need to pivot toward producing critical minerals such as copper, lithium, and rare earth elements, which are essential components of electric vehicles, solar panels, and more. Meanwhile, industry leaders are contending with legacy issues on environmental, social, and governance (ESG) topics and recruitment and making progress on exploring technological developments regarding artificial intelligence and automation.
McKinsey senior partners Harry Robinson and Richard Sellschop spoke with Neal Froneman to find out how he is modernizing the mining company he leads. As CEO and executive director of Sibanye-Stillwater, a multinational metals and minerals mining and processing group, Froneman described how he is leading the company forward using lessons from his past and discussed what he sees as the biggest challenges—and opportunities—facing mining today.
Lessons from life in the mining industry
McKinsey: As you look back to your early days in the sector, what are some of the big lessons you’ve learned that have helped you build Sibanye-Stillwater’s strategy?
Neal Froneman: As I was studying mechanical engineering, I received a bursary from Gold Fields, one of the leading South African mining companies. One of my first jobs there during summer break was to relieve a foreman over a vacation period, which was an incredible responsibility at a young age. It really motivated me, and it turned into a lesson I carry even today. Enabling people as a leader is something that really excites and drives me.
When I had the opportunity to become a CEO, I embraced the idea of empowerment. I realized that businesses weren’t just about resources. They weren’t about technical issues. Predominantly, they were about people. If you can motivate people, if you can have a purpose that everyone can aspire to, you’ll move mountains. And if you back that up with innovation and good technical and business acumen, you can build wonderful organizations.
Strategically, I’ve learned that following is not a good way to achieve success because you’ll always be a follower rather than a leader. You have to do things that others aren’t doing, which to some extent means that you can be perceived as a contrarian. For instance, I built a leading global uranium business in the early 2000s at a time when uranium was unpopular, but I did so just ahead of a uranium boom, which created significant value for stakeholders. And to some extent this has been repeated with part of Sibanye-Stillwater’s successful growth and diversification journey, achieved by entering platinum group metals when everyone else had written them off.
In addition, you can’t learn without making mistakes—but you’ve got to embrace failure for the right reasons, and you need to recognize what caused the mistakes and adjust your approach accordingly. You can’t keep looking backward, and you can’t drive a car over bumpy, tortuous roads by looking in your rearview mirror. You have to constantly look forward as you navigate challenges.
All these learnings have served me extremely well in terms of what we’ve created at Sibanye-Stillwater.
Finding solutions with a purposeful, resilient strategy
McKinsey: Looking at the future of the industry, what is your strategic vision for Sibanye-Stillwater?
Neal Froneman: Our corporate purpose is to safeguard global sustainability through our metals. In addition to our current portfolio of metals that can benefit the environment, we are increasing our investment in the green metals required for the energy transition, which will reduce global warming. We also aim to ensure that our metals are produced with some of the best green credentials, which means increasing our involvement in secondary mining and recycling to complement our primary mining activities.
Our vision is to be a leader delivering superior shared value by having high levels of responsibility regarding ESG issues. This is what gets people out of bed every day. From there, we built our strategic foundation, our iCARES values: innovation, commitment, accountability, respect, enabling, and safety.
Beyond our strategic foundation, our strategic differentiators take us to the next level. Being inclusive and diverse is a strategic differentiator, as is building a portfolio of green metals and energy solutions.
Another strategic differentiator is increasing our resilience. When the world was shut down by the COVID-19 pandemic, we had to develop an antifragility mindset. To us, pandemics are not just viral in nature. I would argue that they include other major forces such as geopolitical conflicts, which create pandemic-like effects that can affect markets globally, such as how the invasion of Ukraine has disrupted supply chains.
When you build resilience, you’re not just a mining company anymore. You’re providing solutions. But you don’t achieve those positions by being average.
It comes back to what I learned at a young age: you’re not going to get everything right, so if you’re going to fail, fail quickly. That’s innovation.
The challenges—and opportunities—of modern mining
McKinsey: Talk to us about the challenges you’re seeing in the mining industry. How do you think mining companies can position themselves in today’s environment?
Neal Froneman: I think one of our challenges is dealing with the negative reputation that mining has with many of our stakeholders. It is generally not an industry young people aspire to work in because of historical perceptions, including concerns about the environmental and social impacts of mining. While I have to admit that mining has a number of legacy issues, I do not believe the reputation is entirely deserved, especially now that mining has transformed and modernized significantly and is creating a lot of social and environmental value.
And today, we have an ideal new opportunity to address the perception that mining doesn’t do good. The clean-energy transition to arrest global warming is based on increasing the use of critical metals. This has significant future social, environmental, and economic implications and is putting mining in the spotlight, but now in a potentially positive way. As the industry continues to take the necessary actions to decarbonize and adopt more-sustainable mining practices, we’ve got a chance to prove that we can meaningfully contribute to addressing climate change while also creating superior social value in host communities and society through responsible mining.
Modern mining, as I see it, is the extraction of resources in a way that creates opportunities for everyone across the value chain and where value is shared in an appropriate way. This includes communities, governments, and civil society. To do this, stewardship of these metals is critical, managed through secondary mining to treat historical discard materials and recycling end-of-life products—urban mining, if I can call it that.
Beyond perceptions of the industry, another challenge that has become apparent since the outbreak of COVID-19 and other geopolitical events is that the world is becoming increasingly less global and more polarized, especially when it comes to minerals value chains. Mining companies will likely play a leading role in ensuring where metals go, which is a significant new responsibility. So you have to position yourself in the right ecosystems.
Africa is a significant untapped source of metals that are in short supply for the future clean-energy economy. The western world needs to cultivate strong trade agreements with African countries to secure credible supply while advancing Africa’s growth as an underdeveloped continent. In addition to leveraging our African heritage, Sibanye-Stillwater is positioned to deliver critical metals in North America and Europe to support the world in dealing with climate change.
Attracting talent with a ‘bionic’ mining company
McKinsey: In many parts of the world, it’s increasingly difficult for employers in the resources space to recruit talent. Are you seeing any signs of this? If so, how are you addressing talent issues?
Neal Froneman: There are local or regional issues in areas, especially in North America, where we find accessing skills to be very, very difficult. In Montana, for example, there were up to three job openings for every unemployed person, although that is starting to decline slightly. But we find ourselves generally able to employ the people we need because we have a dynamic strategy and a purpose that appeals to young people as well as older, experienced people.
To become more attractive to young people, the whole industry has to evolve into becoming more bionic. By “bionic,” I mean implementing technology in a way in which people still feel as if they fit in, but in a modernized work environment. It’s about making work easier across age ranges using AI, digital data, automation, and so on—using technology to make people more effective and taking the less exciting, more routine content out of work. For instance, automation and working off computer screens appeals to young people. And people are living longer, which means people are going to work longer. By taking a bionic approach, organizations can use technology to help people do less manual work.
Leading the C-suite and the board as CEO
McKinsey: How do you think about your leadership style as a CEO? What role do you play in getting the most from your team?
Neal Froneman: I like to refer to myself as “chief enabling officer” to reflect my preferred style of leadership. As a CEO, you want to surround yourself with good people and work in a team environment. And when you have done that, you need to support, guide, and liberate them to realize the value that top performers are capable of delivering in support of the corporate purpose and strategy. But you can’t always seek a consensus. Sometimes as a CEO, you’ve got to know when it’s the right time to make the call. You’ve also got to go a long way to achieve participation from people. Otherwise, they’re not really empowered, and empowerment is important.
I’ve got a great team that’s empowered. We don’t work in silos. We have good role clarity. We are focused, but we don’t put people in boxes. Because of this, our team is resilient, and we’ve been able to address change almost continuously as we’ve become more international. What really pulls us together and allows us to achieve these results is developing the strategy together. The purpose is a purpose we all own. Everyone is involved, and my job is to lead.
You can’t do this without a supportive board. Few companies have shareholders that have allowed them to pivot out of their original business. The way we’ve done this is by developing credibility. We create value for our shareholders by doing things that are contrarian. We also openly talk about our strategy with the purpose of ensuring our shareholders are never surprised. If they don’t like what we are talking about, they can engage with us. And if they engage with us and they are still not satisfied, they can exit responsibly or change management.
New technologies on the horizon
McKinsey: What do you have your eye on in the evolving technology landscape, in mining and beyond? What do you think is going to be interesting and important to you and Sibanye-Stillwater in the next ten to 20 years?
Neal Froneman: We’ve got a plethora of areas in which we can become involved, innovate, and use technology more than we previously have.
First, we’re looking at new ways to use our data. We have the equivalent of 3,000 factories underground at any one point in time, with more than 70,000 people in our organization doing various jobs, including mining, accounting, and looking at the environment. We have a huge amount of data, and to help understand that data, we’ve funded what we call DigiMine, a digital laboratory at a South African university. DigiMine allows us to use AI to assess data in a way we’ve never done before, improving the way we run mines remotely, exposing people and the environment to fewer risks, and greatly enhancing our ability to be more responsible when it comes to mining.
The evolution of grid-scale storage is going to start becoming critical toward the end of this decade to a clean-energy economy based on high renewable penetration. While lithium-ion batteries are the current benchmark as a proven technology, it’s not the ideal technology for this application. Renewables require much lower cost and longer-duration bulk energy storage technologies. We are excited about batteries based on different metals, such as vanadium redox flow batteries and molten-salt batteries, as well as a range of other technologies leveraging legacy mine infrastructure, such as gravity storage systems. This is an aspect of technical innovation that we would love to get into. In addition to assisting in decarbonizing our mine energy supply, these are all technologies that can deliver significant impact on how electricity is provided globally with the right development.
Nuclear energy is going to be critical to the energy transition and is also on our radar, with increasing interest in alternative zero-emissions baseline generation. While the uranium resources that we own in South Africa provide a natural entry into the nuclear energy value chain, small modular reactors are an area that we see as ripe for growth. Just as telephone systems morphed from wide-area networks into mobile phones on local networks, I can see energy decentralizing and moving that way.
Another area we’re looking at in terms of energy solutions is sustainable liquid fuels. This includes biofuels as well as synfuels, as well as green-hydrogen applications. The use of sustainable fuels in internal combustion engines or even hybrid vehicles has not been focused on enough.
A vision for the future of Sibanye-Stillwater
McKinsey: What will Sibanye-Stillwater look like in the years to come?
Neal Froneman: In ten or 15 years, Sibanye-Stillwater aims to be a mining business that is uniquely positioned in the critical-metals space. These critical metals could give us the competitive advantage to build a large energy-solutions business. It’s all part of that pandemic-resilient, antifragility concept I mentioned earlier.
To get there, we need to work our way forward in a responsible way. It’s nothing new, but culture eats strategy for breakfast every day. We have a wonderful culture in Sibanye. We pride ourselves on doing what’s right. And every day I’m inspired by what we do.
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