JOHANNESBURG (miningweekly.com) – The introduction of a strike ballot process as suggested by Deputy President Cyril Ramaphosa would be a great step forward for industrial relations in South Africa, Anglo American CEO Mark Cutifani said on Friday.

Cutifani was responding to a question Rothschild mining analyst Dr Fiona Perrott-Humphrey put at the company’s presentation of interim results, on the steps Anglo management was taking to curb strike violence and halt the seeming war of attrition between rival unions.

Anglo's underlying operating profit declined 10% to $2.9-billion in the strike-hit six months to June 30.

“Deputy President Ramaphosa made the observation yesterday that ballots should be considered. I think that would be a great step forward for the country. It is encouraging to hear those sorts of comments coming from the government," Cutifani told mining analysts in London and Johannesburg.

Ramaphosa has been widely quoted as saying that unionised workers should be allowed to vote on whether to strike and that, as a former unionist, he believed "strike ballots should be the norm to signify the intention and the determination of workers to strike".

Cutifani said that, in his personal engagement with government, it had become clear that there was a commitment to deal with strike violence across all industries.

It was the type of change that the government and the mining industry needed to advance together.

He also praised the reference President Jacob Zuma made in his speech on the need for protection from violent behaviour during strikes.

“Those two things will make a real difference,” Cutifani added.

It has been widely reported that South Africa’s Department of Labour is considering making compulsory both strike ballots and arbitration in the resolution of protracted strikes.

Also in response to Perrott-Humphrey, Anglo American Platinum (Amplats) CEO Chris Griffith said that Amplats had adopted a far firmer stand on the need for discipline during the 2014 strike than during the 2012 strike, which had resulted in the level of violence being an order of magnitude lower in 2014.

“At the same time, we have been engaging with unions and government and there have been all hands on deck to see that people respect the rights of others,” Griffith said.

Post strike, the company had introduced a programme called Building Bridges From Hurt To Wellness and there was a strong focus on culture change.

“There have been more isolated incidents of violence recently but I don’t think we should let the isolated incidents deter us from thinking that we’re making progress,” he added.

Anglo’s underlying earnings for the first half of 2014 were 3% higher at $1.3-billion, but the underlying operating profit was a 10% decrease on the same period in 2013.

Lower realised prices resulted in a reduction of $1-billion in underlying operating profit.

These included a 23% decrease in achieved Australian export metallurgical coal prices, a 17% decrease in achieved iron-ore prices at Kumba Iron Ore and a 3% decrease in realised copper prices.

Attributable return on capital employed (ROCE) was 10% compared with 11% in the same period in 2013, which was a consequence of lower operating profit coming from Kumba, Amplats and Coal Australia and Canada.

Average attributable capital employed increased from $39-billion to $41-billion, owing to increased capital expenditure during the 12-month period.

London mining analyst Liberum said the strong result from De Beers at $765-million was 30% higher than consensus estimates.

However, it made the point that the diamond gain was offset by weaker results elsewhere. Liberum believed that the sale of Anglo’s platinum mines could disappoint on price and timing.

While it was a “decent result” from Anglo, Liberum said the stock – which rose 2.97% on the Johannesburg Stock Exchange to R290.20 a share on Friday afternoon – remained the “most expensive of the majors”.

“Expectations are high on 2016 delivery but we believe the 15% ROCE target is too much of a stretch given the significant hurdles and risks ahead,” Liberum analysts added.