Off to smell the roses

Finweek English Edition - - Openers - DAVID MCKAY

THE AN­NOUNCED res­ig­na­tion of Cathie Markus, an Im­pala Plat­inum ex­ec­u­tive di­rec­tor, might her­ald other high-profile res­ig­na­tions in the min­ing sec­tor, partly be­cause its key peo­ple are mak­ing a killing.

In-the-money share op­tions, on the back of sky-high prof­its, are mak­ing ex­ec­u­tives richer quicker. “Many ex­ec­u­tives are mak­ing bucket loads. In an en­vi­ron­ment where you’ve made money, why con­tinue sit­ting in the same job?” an an­a­lyst asks.

An­glo Plat­inum’s Roeland van Ker­ck­hoven is an­other long-stand­ing plat­inum ex­ec­u­tive to an­nounce his re­tire­ment this month.

Markus, how­ever, in­sists that she just wants time to smell the roses, or “creative loaf­ing”, as she terms it. “I’ve been here for 16 years.

“Clearly it wouldn’t have been ap­pro­pri­ate to do it be­fore,” she says. Markus is re­fer­ring to the re­cent ap­point­ment of David Brown as Im­pala’s CEO, a post Markus says she never wanted. “It wasn’t my as­pi­ra­tion.”

Markus has been Im­pala’s le­gal coun­sel since 1991 and was most promi­nently in­volved in ne­go­ti­a­tions with the Royal

Bafo­keng Na­tion, which is now a 13,4% share­holder through Royal Bafo­keng Hold­ings.

Ac­cord­ing to Im­pala’s press re­lease, Markus was party to al­most ev­ery other cor­po­rate ac­tiv­ity with which it was in­volved.

There are ques­tions, how­ever, re­gard­ing how Markus’s de­par­ture will af­fect per­cep­tions of Im­pala’s man­age­ment.

Hav­ing lost for­mer CEO, Keith Rum­ble, last year, and now Markus, only three ex­ec­u­tives are left, Derek En­gel­brecht, Les Paton and Brown him­self. Says one an­a­lyst: “With all due re­spect, I’m wor­ried about the depth there now. I’m un­easy.”

Mar­ket watch­ers

want to know if Brown can main­tain a strong op­er­a­tional hold on the

com­pany.

That’s not to say Im­pala Plat­inum is fac­ing haz­ardous times. On the con­trary, the com­pany is highly cash gen­er­a­tive, has a rel­a­tively lazy bal­ance sheet (and could there­fore gear up for more ex­pan­sion), and the mar­ket for plat­inum group met­als re­mains strong.

There’s even the prospect of a bumper div­i­dend at its year-end an­nounce­ment, nor­mally in Au­gust.

But Brown still has to prove him­self. Clearly less cau­tious than his pre­de­ces­sor, Brown has al­ready an­nounced his in­ten­tion to spend R3,7bn for African Plat­inum, an AIM-listed com­pany. But as the for­mer fi­nan­cial di­rec­tor, mar­ket watch­ers want to know if he can main­tain a strong op­er­a­tional hold on the com­pany.

Pro­duc­tion fell 8% in the six months to De­cem­ber at the Im­pala Lease Area, the as­set from which Im­pala de­rives the most metal. Costs also rose 22%. The strength of the mar­ket cov­ers for th­ese blips at the cur­rent time, but other op­er­a­tional prob­lems could sud­denly throw the spot­light on Brown, sans his savvy le­gal ea­gle, Markus.

Wants to do some ‘creative loaf­ing’. Cathie Markus

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