AngloGold CEO seeks dignified exit

It was a mixed bag of news and results for mining companies last week, some good and some awful.

AngloGold chief executive Kelvin Dushnisky is leaving after two years, handing over to chief financial officer Christine Ramon until a permanent replacement is found. No reason was given for the resignation.

It may have something to do with the request from the Public Investment Corporation (PIC) for details relating to a bonus of $800 000 (R13.4 million), awarded to Dushnisky by AngloGold for stepping across from Barrick Gold in 2018.

Dushnisky voluntarily repaid the money after earlier receiving an incentive bonus of $926 160 from Barrick. The PIC is one of the largest shareholders in AngloGold, with 11.4%.

Another possible explanation is there may be no better time to lock in share options than over the past year or two and exit with some financial dignity.

Dushnisky presided over a five-fold increase in the share price and a three-fold increase in interim profits for the six months to June.

Pandemic pressure

Anchor Capital’s resource analyst Seleho Tsatsi says what is clear from the results is that sales volumes have been hurt by the Covid-19 lockdown, though precious metal producers have been inoculated to some extent by strong commodity prices.

Amplats sales were down 46% and Kumba Iron Ore’s 13%.

“Anglo American took a hammering ... with a 67% drop in interim earnings. Diamond sales fell through the floor and coal revenue was sharply down.

“The contribution from platinum, which accounts for 23% of operating profit, was hit both by the lockdown and the explosion of a converter plant in March.

“So, the news for precious metal producers has been good to excellent, while for the rest it’s a mixed bag,” says Tsatsi.

Some good news for SA

Kumba reported half-year revenue had declined 8.5% to R31.58 billion, with diluted earnings per share at R26.15 (2019: R31.15).

Good news for SA and the Northern Cape was its approval of the R7 billion Kapstevel South project at its Kolomela mine, with major shareholder Anglo American also signing off on the deal.