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Secure alternative work force to break the strike: We could get labour brokers to advertise and hire
for roles such as excavator operators and to cold-call known coal mine workers ready to take up
work at short notice with better pay. This could be criticised as unfair to the striking workers as we

offer an amount higher than what we are willing to pay them –yet it could break the strike for fear of
job losses!

4.1.4 Recommendation

On the mineshaft decision –closedown and sink a new one; on the 7-day strike notice –capitulate on
union demands; on the protected strike –combine threat of dismissal with alternative work force to

break the strike.

Justification: The new mineshaft has a +NPV and resumption is a huge safety risk whilst a
permanent shut down is lost earnings. Capitulating on union demand to avert the 7-day strike notice
strengthens our safety resolve -if backed by threats of dismissals and temporarily replacing the
workers in the case of the protected strike, we stand a good chance to prevent this from engulfing

the group whilst extracting the wage cost savings we need as part of the overall US$ 5.8 billion cost
reduction drive.

Actions:

 Group Treasury should allocate US$135million from US$6,895million ‘Cash and Cash
equivalents’ and the Group Board should contract a globally reputable firm to immediately

commence mineshaft re-construction and investigate the prior contractor. A PR team should be
set-up to reassure the community and the markets that the right measures are being taken.
 Internal Audit (Forensics) should carry out a full safety audit and investigate the credibility of our
safety records in Australia Coal: its Board must take disciplinary action against anyone

implicated in undermining safety management records and systems. Evidence of action taken
must be documented by the local HR Executive and tabled to the unions to avert the 7-day
notice to strike.

 The HR Executive should appoint an outside labour broker to find temporary workers to replace
the workers on strike and issue a communique to resume work or face retrenchments.

nd
4.2 2 Priority: Corporate restructuring and re-organisation

We have hitherto, defined our strategic direction (scope, products and markets) in 8 strategic
segments. There has been fierce board disagreements on how to reposition that strategic direction.
The CEO believes the recalibration of the of the Chinese economy from infrastructure to

consumption means we should restructure our portfolio from 8 to 3 main segments -Diamonds,
PGMS and Copper whilst Coal and Iron Ore should be held for cash generation over time but with a
Developed by The CharterQuest Institute for 'The CFO Business Case Study Competition 2017'
www.charterquest.co.za | Email: thecfo@charterquest.co.za