THE RESURRECTION OF LAZARUS ZIM
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.