Podcast

Charles Carter

Charles Carter Executive Vice President – Business Strategy and Organisational Effectiveness outlines progress made with Project ONE Listen to podcast

Project ONE

Holistic transformation plan to achieve  strategic goals

Project ONE, AngloGold Ashanti’s all-encompassing change programme, gained increased traction across the organisation during 2010 as its teams moved aggressively to progress implementation. The model was rolled out at 15 sites during the year, adding to the eight that went live in 2009. Originally designed to facilitate delivery of the company’s five-year business objectives, which encompass an ambitious set of financial operating and sustainability targets, Project ONE has secured tangible operating and cost efficiencies which together have helped unlock almost $500m in operating cash flow improvements across the business, with potential to improve significantly on that figure in coming years. The implementation of the model has also resulted in improvements in managerial effectiveness and accountability, both crucial to ensuring the improvements are sustained and enhanced. Project ONE is composed of two integrated initiatives – the System for People (SP) and the Business Process Framework (BPF) – which together promote standard business processes across every area of the company in order to ensure that the right people are in the right roles and are working to ensure stable processes that deliver consistently excellent results. The greatest advantage of Project ONE is that it engages employees as active participants in the design and the detail of their work, while leaders play a significant role in creating and sustaining a values-based culture that prioritises safety, diversity, mutual respect for colleagues, the environment and communities in which AngloGold Ashanti operates. Ultimately, Project ONE demands strict accountability at every level of the organisation as it strives toward achieving those five-year goals that were set in 2008 of: reducing accident rates by 70%; increasing overall productivity by 30%; cutting reportable environmental incidents by 60%; increasing production by 20%; achieving a 25% real reduction in costs; and earning a return of at least 15% on capital employed, through the commodity and investment cycle.

The SP is a managerial effectiveness system focused on ensuring that those at each level in the organisation are held directly accountable for their work responsibilities. This component of Project ONE was designed to create the most effective organisational design possible, in which a culture of mutual trust is fostered in order to facilitate the efficient execution of work. A core team has been established to enhance the design and development of the SP and to provide ongoing internal support during its continued implementation. This process will be led by Charles Carter, Executive Vice President – Business Strategy and Organisational Effectiveness.

The BPF is the second component of Project ONE. This is a scientifically rigorous system focused heavily on short- and long-term planning and execution of work. The BPF clearly defines business expectations and sets operational targets while also seeking continuous improvement once operational volatility has been eliminated. The BPF was launched in August 2008 under the direction of Tony O’Neill, Executive Vice President: Business and Technical Development and has seen a string of positive results across various mines, plants, shafts and corporate structures, where well-planned operating methodologies have reduced volatility and increased average productivity. While great progress was made in the implementation of BPF, the process is still in its formative stages and is expected to yield sustained productivity improvements in coming years as it is bedded down across the business.

The Mponeng plant in South Africa, at the outset one of AngloGold Ashanti’s most efficient operating units, was chosen as a pilot site for the project’s implementation to showcase its effectiveness. Throughput improvements of 15% achieved during 2009 demonstrated the potential that the process can unlock. Before the implementation of the BPF, ore from the Mponeng mine would regularly be trucked to neighbouring plants for processing, as the mill struggled to cope with volumes from AngloGold Ashanti’s largest mine. Since implementation of BPF, however, the plant has improved productivity to the point that it now has spare capacity, leaving the challenge now squarely with the mining operation to improve tonnage to fill the gap. The early signs of the implementation of BPF at the more extensive and complex underground mines in South Africa toward the end of 2010 have been enormously encouraging. At the Mponeng plant, meanwhile, the management team is applying additional Project ONE business process elements to further improve metallurgical performance. Emphasis on stabilised processes has also resulted in a 20% reduction in sodium cyanide consumption. Crucially, these improved processes and the lessons from their development can be rapidly extended throughout the company, a key benefit of the uniform operating model.

Mponeng mine – daily stoping (m2)

Mponeng mine – daily stoping

Improvements at Geita in Tanzania, are also emblematic of the potential that BPF can unlock. Implementation of the change model saw management’s focus shift to improved planning, scheduling and resourcing of maintenance work, in order to limit operational interruptions in the plant. This led to improved recoveries and a 30% increase in plant throughput. This performance has held since 2009, demonstrating the sustainability of the process. The BPF was also applied to the maintenance of the heavy mobile equipment fleet. Truck availability has soared following improvements to the service strategy and the establishment of a separate work crew to attend to unexpected breakdowns in order not to disrupt essential scheduled work. These improvements, coupled with improvements to utilisation through more efficient scheduling of driver shifts and improved road conditions in the pit, contributed towards Geita’s truck fleet reducing from 48 trucks in 2009 to 34 at the end of 2010, while moving more tons. Further fleet reductions are planned in 2011. The implications for fleet replacement and overall capital efficiency are significant and demonstrate how BPF supports the overall objective of achieving returns on capital of more than 15%, throughout the cycle.

Geita’s Project ONE implementation teams have since been repatriated to their home regions in Australia, West Africa and Brazil, where similar improvements are becoming evident. Most encouraging is the application of the improved planning, scheduling and resourcing of work to AngloGold Ashanti’s mining operations. The first pilot mining site, Lamego in Brazil, reported significant improvements in jumbo drilling advances as well as drilling and blasting cycles as a direct consequence of enhanced planning and scheduling. A similar focus is being applied at Sunrise Dam in Australia, Iduapriem in Ghana and the deep-level underground mines in South Africa.

Iduapriem mine – daily milled (m2)

Iduapriem mine – daily milled

TauTona – daily stoping (m2)

TauTona – daily stoping

Integrating the SP and the BPF was a priority in 2010. The systems are hugely complementary in delivering rigorous approaches to planning, scheduling, resourcing and execution of work. The resultant creation of cooperative processes, employee engagement and teamwork is a primary Project ONE objective that furthers a range of other initiatives intrinsically linked to AngloGold Ashanti’s organisational values.

Safety Transformation, an initiative developed to underpin safety improvements, outlines AngloGold Ashanti’s strategy to create workplaces free of occupational injury and illness. Embedding specific safety elements and concepts which define our new approach, into both components of Project ONE, will ensure sustainability of the overall safety effort. In the first quarter of 2011, specific safety training will commence, focused on Incident Management and supporting integrated Project ONE delivery.

‘We value diversity’ and ‘We treat each other with dignity and respect’, are two specific values that guide AngloGold Ashanti’s efforts toward transformation or employment equity. Achieving these goals requires the transformation strategy be an integral part of Project ONE. A policy for the transformation and localisation of labour was approved by the board of directors in November 2010 and will serve as a framework within which the regions will develop their own strategies. The policy is an expansion of AngloGold Ashanti’s previous approach to legal transformation requirements in South Africa which were focused on redressing past employment inequities by enhancing the representation of historically disadvantaged groups. With the full commitment from the board of directors and the executive team in October 2008, the policy was developed to include the elimination of local barriers to skills development and upward mobility, and to progressively recruit local talent into technical and managerial roles in host countries. The policy aims to take into account the legislative frameworks of these countries, as well as the company’s own values, in order to redress historical imbalances, promote gender equality and employment of local citizens at all levels, as well as the equitable employment of people with disabilities.

Project ONE has a significant role to play in creating and driving a values-based organisational culture. The programme is closely aligned to our overarching philosophy that People are the Business. This philosophy is testament to AngloGold Ashanti’s firmly held conviction that people working in the organisation are the key to its success.

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