CEO scandal hits mining
Endeavour Mining’s shock firing of its chief executive has capped a miserable three months for the global mining industry – and an equally painful period for its shareholders.
The world’s biggest producers have spent much of the past decade trying to rebuild mining’s reputation, after a slew of bad deals and billion-dollar write-downs sent investors fleeing. That attempted makeover has taken a battering in recent months: The mining industry has suffered blow after blow, costing investors billions.
Knocks happening globally
In Panama, mass protests against one of the world’s largest and newest copper mines culminated in an order to permanently shut it down, and wiped out more than half of the market value of owner First Quantum Minerals.
In South Africa, Sibanye-Stillwater dropped as much as 25% in November after announcing a convertible bond sale. And an accident at rival Impala Platinum left 12 people dead.
The latest jolt came on Thursday, when Endeavour – the biggest gold miner listed in the UK – announced it had fired CEO Sébastien de Montessus for “serious misconduct” after discovering an alleged “irregular payment instruction” of $5.9 million related to an asset sale. The shares plunged as much as 15%. De Montessus has said that the relevant decision didn’t cost the company anything and had no benefit for himself.
The fresh wave of setbacks comes as the sector is seeking to position itself as a vital part of the green transition because of its role supplying materials like copper, nickel and lithium needed to decarbonise the global economy.
But to do that, the producers need supportive governments and local populations and investors to fund them. Panama’s move to “definitively” close First Quantum’s $10 billion copper mine – which opened just four years earlier and still has decades worth of copper to dig up – has sent shockwaves through the industry.
The shares ended the year more than 60% lower after the loss of its biggest profit generator, and analysts have raised questions about the company’s balance sheet, with billions of dollars of debt maturing in the coming years.