Namdeb beyond Oranjemund

It is a little over 100 days that new Namdeb General Manager Riaan Burger (RB) has assumed the reigns of the diamond mining giant. Already he has a lot of things he must get right.

First, Namdeb needs to be cost-effective and productive after a sloppy 2011 to create profits to build on its new 2012 and 2014 projects.

Secondly, the long term dream of Namdeb needs investment—increase in knowledge of our in-shore and mid-water areas while finding technical solutions to mine in these challenging environments.

Finally, Oranjemund - there has to be a winning formula for everyone after the town’s proclamation. In this interview, he gets to the bottom of matters.

PF: How did you find yourself in the mining industry?

RB: After completing my mechanical engineering degree in 1990, I worked in the aviation industry for a few years but by 1994, I saw no further career growth. I then decided to apply to Namdeb, and joined the company in January 1995 as an assistant engineer. I have never looked back.

PF: What are your key responsibilities in Namdeb today? How far and how huge is the level of your responsibility?

RB: I have the overall responsibility for Namdeb’s operations, inclusive of our three mining areas, our future projects and the communities in which we operate. In this regard, my number one priority is the safety of our people followed by the responsibility to look after Namdeb’s current and future profitability. At the same time, I am also very conscious of our accountability for ensuring that we are a good corporate citizen that makes a lasting contribution to Namibia.

PF: Of course, 17 years at an organisation like Namdeb is no fluke. What are the lessons learnt which has enabled you to reach this far?

RB: I must admit that I have learnt a lot in my 17 years at Namdeb! Most of what I have learnt has come the hard way – by making a number of mistakes first. I think, first and foremost, it has been the realisation that everything that a business achieves comes from talented people and that the number one role of any leader is to select, coach, mentor and create the right environment for talented people to flourish. I have also learnt that strong teams must have diverse people who are able to bring different perspectives to a problem. The only things that they need to have in common are a positive attitude and a common set of values.

PF: What are your and for Namdeb’s immediate objectives in your new role?

RB: Our top priority at the moment is to improve our safety performance, and our relationships in the workplace. I think that these two aspects are closely linked, and that a happy workplace where people are motivated, is also a safe workplace. The next priority would be to ensure that we achieve our productions plans for 2012, as our profitability over the next few years is essential for the delivery of our projects.

I have no ‘secret formula’ for achieving this plan – I know that these objectives are only achievable with the buy-in and commitment of our employees and our stakeholders, and hence the need to firstly improve our relationships.

PF: You are also tasked to see that Namdeb moves in line with its Vision 2050 and beyond. But with the increasing changes the world, especially the environment is taking, do you see yourself and Namdeb sailing perfectly through the next 40 years?

RB: I have no doubt that the world is going to change a lot over the next 40 years. We continue to deplete natural resources and the realities of climate change, and increasing population pressure on, the world will affect all of us. At the same time, however, we believe that the market demand and value of diamonds will also continue to grow.

Our long-term challenge is to find ways of transforming our business so that we are able to continue to produce diamonds in a sustainable way. We are already doing a lot in this regard, but I think that we can do a lot more to find complementary technologies and systems to allow us to change the nature of our business. The same goes for the way we interact and work in our communities – a lot more can be done to create communities where the local economies are diversified and where people create economic benefit from a variety of activities. In this regard, I believe that the recent proclamation of Oranjemund creates unique opportunities for the town.

In the short term, our immediate problem is to ensure that we get our business back on track after a rather poor 2011. This is a significant challenge as we need to improve our safety performance and become more productive. It is essential that we reduce our unit cost by improving operational efficiencies and keeping our cost under control. At the same time, we have to manage the expectations of our employees and our stakeholders, and to focus on the necessity to produce good profits in the next few years in order to fund our future projects.

PF: But what is really needed for Namdeb to start mining its challenging shallow marine deposits, cost-effectively?

RB: There are essentially two key ingredients necessary for this, and they are linked. The first is that we need to build confidence in the resource, and the second is that we have to develop the right technology to access these areas. Up to now, our technology development has primarily been focused on developing systems that can sample in the shallow water areas, in order for us to create confidence in the resource. In building these sampling systems, we have also gained a deeper understanding of the nature of the different resources, and we are learning more about it every day. Our Probe Drilling Platform (PDP) is a rather bold step to move further off-shore and to drill sample holes in areas that were previously completely inaccessible. Whilst it is a very good tool for this purpose, we are also learning a lot about the challenges of operating in this hostile environment.

PF: Five years from now, what is the biggest challenge that could face the mining industry in general and Namdeb in particular?

RB: I think the issue of sustainability is going to become much bigger than most people anticipate, and that the responsible use of our natural resources, in particular water, will become a serious issue for the industry. Furthermore, the challenge for the industry to balance a fair return to shareholders with social responsibility and contribution to the Namibian economy will, no doubt, remain a key issue. Mining investment is generally high-risk and with projects often requiring many years to break-even, it is understandable that investors would want a higher return. The challenge for Namibia is to remain an attractive investment destination whilst, at the same time, ensuring that the maximum value is derived from our natural resources for the country. This ‘balancing act’ requires careful consideration and involvement of all stakeholders.

PF: But what do the future diamond mining prospects look like for Namdeb down south?

RB: Our prospects continue to look very good, albeit that future mining would be very different to what we have done in the past. Over the next few years, we will use our profits to re-invest in the development of new projects in all our mining areas. These projects are aimed at carrying Namdeb to 2020 which, in turn, will buy us the time to develop the technology and systems to mine in the shallow marine and mid-water areas. Several projects have already commenced and we are in the process of commissioning a new processing plant at Elizabeth Bay Mine. We recently received approval to proceed with the construction of a new central recovery plant, and a new mining operation near Sendelingsdrif.

PF: With all these developments, what does the proclamation of Oranjemund mean to Namdeb’s future operations?

RB: The proclamation of Oranjemund has been on the cards for a very long time, and was initiated by Namdeb in 1998. It is indeed a significant event, one that paves the way for the diversification of the town’s economy. Whilst Oranjemund will no doubt continue to be primarily dependent on Namdeb’s activities for many years, opportunities will continue to open up as the town attracts new investors. We are under no illusion that this will happen immediately, as the process of transfer of title deeds will take a substantial time. In the meantime, Namdeb and the newly elected Town Council will continue to work closely together to ensure that the process continues smoothly, and that effective municipal services remain in place.

PF: Approximately how much did Namdeb invest in Oranjemund?

RB: After around 80 years of development and upkeep by Namdeb and its predecessor, Consolidated Diamond Mines (CDM), it is virtually impossible to say how much has been invested. The replacement value of the town is estimated N$2.6b.

PF: Wow. And in so doing you had to give off the longest privately owned road and bridge in the world to Government, as part of the proclamation, how tough was it reaching this decision?

RB: The bridge has remained Namdeb’s property. The bridge is also located in South African territory. Giving off the town and road is a normal part of the proclamation process and not really a difficult decision. It was essential for the process to succeed.

PF: Generally, what is your take on the argument around the revision of the Diamond Act because the local authority’s status of Oranjemund now means there is freedom movement around the area, a conflict of the Diamond Act. Do you think the Diamond Act should now be revised to suit Oranjemund’s town status?

RB: It should be clear that the Diamond Act still applies to all Namdeb’s licence areas, and that only the road servitude and the Oranjemund town lands have been excised. The normal Restricted Area permitting system of the Ministry of Mines and Energy thus remains in place for all mining areas. At present, the same permitting system is also still applied to the town area, but I would expect that this will be reviewed once the Town Council has had the opportunity to settle into their positions and to set up the necessary systems to effectively run the affairs of the town. This decision, however, now rests with the Town Council, and no longer with Namdeb. It has been agreed during a meeting with the Permanent Secretary of Regional and Local Government that the current permit system will remain in place till the legal processes in town have been completed and the Local Authority has a billing system in place and is in a position to offer effective municipal services to the town. Namdeb will for this period still be responsible for these services to the current community. Let it be also noted that Oranjemund lies within a National Park, another aspect which makes the town fairly unique.

PF: To what extent and until when will Namdeb continue assisting the newly elected local authority?

RB: The reality is that the newly elected town council (board) will only become financially independent when it can start charging rates and taxes and municipal services to the residents. It is currently estimated that this process will take at least a year to be finalised, and Namdeb will continue to provide all the services until the Town Council has the necessary means to take over this function. This is, however, on the condition that some form of access control to the town remains in place, as Namdeb cannot be expected to provide free services to a significant number of new entrants.

PF: So, how true is that some land is yet to be prospected? Soon Oranjemund will see an influx of investors who might start scrambling for land.

RB: Prior to commencing the proclamation process, we completed a detailed evaluation of the town areas and have concluded that there aren’t any viable diamond deposits present within the proclaimed town lands. The entire town and surrounding area lies on the ancient fluvial Orange River channel, and was not subject to the process that created the economic diamond-bearing deposits.

PF: Briefly explain what difference has the arrival of Anglo-American brought to your current operations?

RB: The acquisition of the Opperheimer family’s interest in De Beers by Anglo-American is still in progress, and we have not been affected by it. I also doubt if it will make a significant difference to the day-to-day operations, but it is likely that we will benefit from Anglo’s well-known technical and project management expertise, as well as new opportunities for employees to gain experience in other operations.

PF: What advice would you give to anyone willing and wishing to invest in Oranjemund?

RB: I believe that Oranjemund will become a great investment opportunity over time, and that it can develop into a beautiful, diverse, town with unique attributes for those who live and work here. Investors should, however, be willing to bring fresh ideas and new business to town, and should leverage the town’s unique character and location.

PF: What was the recipe that Namdeb used to keep Oranjemund the Eden it is today for so long?

RB: The number one reason that Oranjemund has remained in this condition, is that access has been restricted ever since the inception of the town, and through this a community has developed in which every person in the town plays an active economic role. This has effectively resulted in a crime-free environment, where people live in harmony with, both, each other and with the natural environment. At the same time, Namdeb has continued to maintain and develop the infrastructure, provided medical facilities, a school and supported numerous sports clubs that make it an attractive environment for our employees and their families.

PF: What are your biggest fears in this whole proclamation process, obviously it won’t be smooth sailing for everyone?

RB: I have no concerns about the process, as I have full confidence in the elected Town Council members. They are all highly respected members of our community and I firmly believe that they have the necessary wisdom and insight to ensure that the process runs well.

PF: If you were to speak to some graduates about how to enter the corporate world, what would you advise them to do?

RB: The majority of our graduates are highly capable young people who know their field of study very well, and have done well academically. I also find that they generally learn very quickly how our business works and can technically master their jobs quickly. The majority of them, however, fail to learn how to lead people effectively, as this is a skill that is generally not taught at university, nor is it something that you can just learn from a textbook. It is something that you have to gain through experience, and probably the number one thing that a young graduate should seek to do. Effective leadership is also learned though observation and seeking the guidance of those in leadership positions. In this regard, I am not only referring to business leaders, but also those in community, spiritual and educational leadership roles. I would encourage young graduates who want to be successful to seek out a mentor who can guide them in becoming a better leader. PF

Who is Riaan burger?

Where were you born and where did you grow up?

I was born in Otjiwarongo and grew up in Windhoek.

Where did you study and what course(s)?

After matric at Academia Secondary School in Windhoek, I studied mechanical engineering at the University of Stellenbosch, and also later completed an MBA at Stellenbosch Business School.

How did you land this position?

After working in the aviation industry for a while, I joined NamDeb in 1995 as an engineer. I worked in various areas, including asset management, technical training earthmoving and projects, before moving into the position of Head of Strategic Projects until my appointment as General Manager in December 2011.

I am told you are a pilot how many hours have you done?

I have done around 800hrs.

What kinds of planes do you fly?

I only fly light aircrafts since I only have a private pilot’s license

What drives you?

A desire to improve things. I believe that tomorrow will be better than yesterday, and we can do something about it today.

What is your motto in life?

Something worth doing is worth doing well.

What are your worst dislikes?

Negative and destructive behaviour.

What makes you happy?

I find real joy in seeing people rise to a challenge and succeed in what they are doing.

How do you relax?

I enjoy spending time outdoors, doing a bit of exercise or just spending time with my family.

Do you read books - favourite book?

Business books, I enjoy the work of Steven Covey. I unfortunately don’t have much time for leisure reading at the moment.

Favourite food

Anything my wife makes . . .