Finweek English Edition - - FRONT PAGE - BY DAVID MCKAY ed­i­to­rial@fin­

Two years ago, the world of Lazarus Zim came crash­ing down . Forced to shut Afripalm Re­sources, he re­treated to t he shades while t he scep­ti­cal in­vest­ment mar­ket sucked its teeth. Zim had be­come one the most high-prof i le vic­tims of failed black eco­nomic em­pow­er­ment (BEE).

Afripalm Re­sources had first emerged in 2006 as a driv­ing force in the spec­tac­u­lar re­verse takeo ver of Tokyo Sexwale’s Mve­laphanda Re­sources, it­self the for­mer torch-bearer for fron­tier BEE in South Africa.

Zim, a for­mer MTN ex­ec­u­tive and head of An­glo Amer­i­can SA, was the new Sexwale. What lay be­fore him were hand­some-look­ing in­vest­ments in Gold Fields, Trans Hex and Northam Plat­inum. Noth­ing could go wrong. Then, it did. Three years later, the world eco­nomic cri­sis pre­cip­i­tated the enor­mous climb­down in com­mod­ity prices. There was re­cov­ery by 2010, but con­fi­dence in BEE seemed to have shaken. Northam shares that once guar­an­teed Zim’s debt in his cho­sen in­vest­ment of Northam Plat­inum now failed the covenant tests put in place by banks. So they called in the shares and the banks.

It was a heavy blow for Northam, which saw its em­pow­er­ment cre­den­tials re­duced from 26% to well un­der 10%. What’s worse, the depart­ment of min­eral re­sources in a po­ten­tially prece­dent-mak­ing decision, de­manded Northam re­build its BEE stake, no mat­ter the cost. For Zim, how­ever, the fail­ure of Afripalm was the end of a glit­ter­ing ragsto-riches story.

“The banks did very well,” said a rue­ful Zim. Per­haps look­ing slightly older, he is nonethe­less in re­mark­ably good cheer, be­tray­ing none of the bit­ter­ness you might ex­pect of some­one who has, as the Amer­i­can­ism has it, been ‘through the wringer’.

Zim is now a prin­ci­ple of the Atisa Con­sor­tium, a mem­ber of the Zam­bezi Plat­inum Con­sor­tium, which has taken a 5% stake in Northam Plat­inum equal to about R560m as per the plat­inum firm’s mar­ket cap at the time of writ­ing. He also re­mains chair­man of Northam Plat­inum with the ap­point­ment of Paul Dunne, who re­placed Glyn Lewis as CEO this year, clearly of ben­e­fit.

“We have a phe­nom­e­nal chem­istry,” said Zim of Dunne, who was pre­vi­ously head of op­er­a­tions at Impala Plat­inum un­til a fall­ing out with Impala CEO Ter­ence Good­lace led him to Northam. Dunne’s ar­rival was a piv­otal mo­ment for Zim since the for­mer Impala man did not at­tach to Zim the fail­ure of a pre­vi­ous em­pow­er­ment deal.

The plan now is for Zim’s Atisa to keep its in­vest­ment strat­egy re­stricted to Northam Plat­inum in terms of the plat­inum in­vest­ment mar­ket, hence the R400m lock-in fee Northam agreed to pay to Zam­bezi Plat­inum Con­sor­tium as a whole, that Dunne also de­scribed as a “re­straint of trade”.

Asked to com­ment on plans that Atisa would have other min­ing in­vest­ments, Zim is de­lib­er­ately vague. “Atisa is do­ing a lot of other things, but qui­etly. It is bet­ter to an­nounce things once they are done.

“Talk­ing about plans is not the best thing I have learned,” he said, re­fer­ring to his for­mer po­si­tion as the poster child for all things glit­ter­ing in the BEE min­ing space. “I am a great be­liever in plat­inum. I think this is the right time,” said Zim.



Tokyo Sexwale

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