South African mining giant, Impala Platinum Limited (Implats), employs no less than 29 CIMA members and students. This puts management accounting at the heart of its business strategy, resulting in costs that are considerably lower than that of its industry peers, says Leon van Schalkwyk FCMA, group executive: strategic finance.

The harnessing of CIMA knowledge and expertise contributed to the establishment of one of the most extensive and deeply integrated sustainability strategies in the world, providing Impala’s workforce with a plethora of healthcare, education and agricultural support – as well as 2,000 affordable new homes.

It is no surprise, then, that Implats has won the South African Sunday Times Corporate Social Investment Leadership Award for the second year running at the end of October this year.

What is the role of CIMA knowledge and skills at Implats?
Although the mining industry is a challenging environment, it is also a management accountant’s dream in terms of the challenges and areas to become involved in.

The management accounting team members at Implats are key players in gathering business data, proactively interpreting the meaning of the data and working with the business units to respond appropriately to the analysis.

Our strategy is to recruit young people from university who have already learned the numbers. They are then trained in our environment to understand the business. Each senior team member has been with the company for an average of 15 years.

Most of us started our careers in the mining industry and have developed a deep knowledge of the business and a strong relationship with the key players. It is crucial to know the story behind the numbers and to ensure other players in the business know they can trust our advice.

My management accounting team coordinates various aspects of our 20 operational sites. For example, some members coordinate our significant capex programme, while others are responsible for the working costs.

Our management accountants do not sit in their air-conditioned offices disconnected from the operational site. They are an integrated part of the action and enjoy strong credibility with senior managers across the business.

This credibility was earned by providing solid information every time. We don’t change our numbers. Instead, we stick to a highly consistent model, providing clear business information that can be readily understood by those at the operations.

“Doing it right first time” is another important component of building the management accounting team’s credibility across the business. The information provided remains solid. We avoid changing the numbers supplied to business managers at all costs.

The numbers provided today will still be the same tomorrow. “Never give up” is another golden rule for my team. We work tirelessly to convince stakeholders within the company to always act in the interests of the business.

What specific challenges does the mining sector present to management accountants?
The first challenge has been the global recession. Before the downturn we were making a significant amount of money.

Current profits are probably a third of what they were pre-2008. Secondly, in early 2004 the business embarked on a significant capital expansion programme, creating three major new mining shafts at our Rustenburg operation.

The third challenge is significant increases in energy prices and wage costs.

There is also the threat of industry nationalisation, as well as a raft of new health and safety regulations. The eyes of every aspect of the South African society are focused on the mining sector at present.

It is vital for management accountants to stay on top of these formidable challenges, to understand the business and to be able to convince the key players that their analysis and recommendations should be followed.

The good news is that Implats remained the lowest cost producer in the industry, enabling us to continue with the development of our future investments. The first of our new mining shafts will start producing early next year, with another two following at two-year intervals.

To what extent are sustainability issues on the management accountancy team’s agenda?
This is absolutely at the top of the agenda. For example, approximately four years ago Implats developed a ZAR2bn accommodation strategy, designed to uplift the conditions of workers by providing them with affordable new homes.

There is a commercial as well as an ethical philosophy behind this: if people have a good quality lifestyle, they will be more productive. Mining is a highly labour-intensive business. Including contractors, there are around 57,000 people working for Implats. [EMBED IMPALA CSR VIDEO HERE]

When did sustainability issues start to rise up the agenda in the business?
Health and safety have always been crucial in the mining industry. We have always cared for our people. During the last few years sustainability issues became even more vital to ensure we retain our licence to operate within society at large.

The fact that we, as a mining company, have won the Sunday Times Corporate Social Investment Leadership Award for two consecutive years is a testament to our success in this area.

How important is CIMA as a qualification to the South African business environment at large?
The beauty of the CIMA qualification is that every aspect of it applies to the modern business environment. South African companies need people who can connect the numbers to the business.

What’s high on your priority for the next 12 months?
Maintaining our cost position will continue to be key. Capital execution will remain crucial as our new mining shafts come into production and our work to further improve the living conditions of our employees will remain a focus point.

How do you deal with global economic uncertainty?
Mining is a long-term game. All we can do in terms of the current uncertainty is to ensure our business remains solid. Applying financial discipline is also key. Impala is strong and we are generating a significant amount of cash, despite the contemporary economic climate.

What’s your advice for today’s CIMA students?
Be assertive in the workplace, opportunity very seldom knocks a second time. If you are a weak management accountant, no one will accept your advice. If you want to sell your story, you have to believe in it yourself. Learn how to “market” it.