JOHANNESBURG — Financial services group Cadiz Mining and Resources division head Peter Major has told Mining Weekly Online that the market’s response to the appointment of Ben Magara as Lonmin’s new CEO was “disappointing”.
Report by Miningweekly.com
The platinum miner’s shares were trading at £2,87 in London, down 1,24% on the March 28 close of £2,90
Lonmin’s shares on the Johannesburg Stock Exchange were trading at R40,25 down 2,26% on the March 28 close of R41,18.
“I am a little disappointed as to how the share price reacted to Magara’s appointment, particularly with the stable platinum price. I expected it to increase by around 2% because it is so bombed out right now,” Major commented.
Mining Weekly Online reported earlier on Tuesday that the former Anglo Coal South Africa CEO would occupy the top leadership role at Lonmin with effect from July 1, at which time acting CEO Simon Scott would resume his role as CFO.
Scott was appointed to head up the embattled miner in August after the then CEO Ian Farmer became ill in the midst of an international media storm over the deaths of 34 striking miners at its Marikana mine, in the North West province.
While Major believed Magara’s appointment was “a step in the right direction” he said that Magara’s areas of expertise — primarily around capital and engineering — meant that he may not have the hardline production-focused single-mindedness required to accelerate the company’s recovery.
“He doesn’t have a strong production perspective, which is what Lonmin needs at the moment — they need someone who can break rock and get the ore out of the ground,” he said.
He did, however, consider that Magara’s years of employment at large mining companies, most notably the Anglo American Group, meant that he would find the smaller Lonmin easier to manage.
In addition, Major said Lonmin’s decision to appoint a mining engineer rather than a financial expert was well considered.
“At the moment, Lonmin needs someone who understands what can and can’t be done, what is possible and what is not. Mining is such a complex business and it is important to have someone who understands what is going on at the rock face,” he commented.
He added that, on paper, Magara “ticked a lot of boxes” and that, while Lonmin was struggling to recover from continuing labour and production challenges, the appointment presented good prospects for the Zimbabwean national.
“It is not as though they are handing him a poisoned chalice; this is a very good opportunity,” he emphasised.
Magara currently occupied the position of executive head of engineering and capital projects at Anglo American Platinum and had occupied several positions within the Anglo American Group.
He boasted 22 years experience in the mining industry had been a director of Anglo American South Africa since 2006, and was a nonexecutive director of phosphates firm Foskor.
Magara completed a degree in Mining Engineering from the University of Zimbabwe, where he was, in 1990, named the Best Final Year Mining Engineering student.
About Ben Magara
Full Name: Bennetor Magara
Position: Executive head: Engineering and projects at Anglo American Platinum (Amplats) since 2009
Main Activity of the Company: Mining platinum
Date and Place of Birth: June 24, 1967, Bikita, Zimbabwe
Education: BSc (Eng) (Hons), University of Zimbabwe, 1990; ADP,
London Business School; and AMP, Gordon Institute of Business Science
First Job: Underground miner
Size Of First Pay Packet: Z$1 164 a month
Size of Capital Portfolio: R7 billion to R10 billion a year
Number of People under Your Leadership: About 5 000
Management Style: Inspire and empower people to work to a purpose and have fun
Personal Best Achievement: My wife and two sons
Best Business Achievement: Being CEO of Anglo Coal South Africa at 38 years of age
Person Who Has Had the Biggest Influence on Your Career: My mother
Person You Would Most Like to Meet: Richard Branson – again
Businessperson Who Has Impressed You Most: Richard Branson
Philosophy of Life: Making a positive difference and having fun in all that I do
Biggest Ever Opportunity: Turning around the New Denmark colliery’s safety, production, costs and culture
Biggest Ever Disappointment: The death of a fellow miner