Impala Platinum CEO Resigns

David Brown, the CEO of the world's second largest platinum produce, Impala Platinum, resigned today.

In my mind’s eye, I have this picture of David Brown; with a glass of New Year’s champagne in one hand and the last bars of ‘Auld Lang Syne’ ringing in his ears, wondering what 2012 would bring him. A brutal self- assessment of his leadership of Impala Platinum (profile IMPUY.PK) might have provided the daunting answer: “Different year; same problems.”

A quick look at Implats’ prospects for 2012 gives one a sense of déjà vu. Zimbabwe, although its fortunes are not priced into the share, continues to be the basket case it has always been. Worse, there’s no sign that business conditions there are going to be clarified any day soon. In fact, they could become more complicated as Zanu-PF, Zimbabwe’s ruling party, considers shifting elections a year earlier to 2012. This would mean a resolution on indigenisation – black economic empowerment legislation – might have to wait until the completion of the election race.

Secondly, platinum mining cost controls are going to be predictably difficult to rein in. According to some estimates, ‘Section 54’-related work stoppages following underground fatalities on South Africa’s platinum mines will continue to hammer production; raising costs. We all want safety to improve, but the zero-fatality goal is still a dream. No-one wants to admit it, but there’s no end in sight to underground fatalities on South African deep level mines. In the first week of January, while most of us were blowing the dust off our laptops, two miners had been killed on two listed South African (gold) mines.

Additionally, labour expectations and union dominance will be a fixture in South African mining for years to come. Combine that with the likelihood that industrial demand globally will be stunted, at best, in 2012 – placing downward pressure on the platinum price – and you can see why Brown would come to the conclusion that he’d done what he hoped to do at Implats, and could do no more. As he commented to Miningmx earlier this week, he’s due some “quiet time.”

Knowing when to call it a day is not easy, particularly as Brown has played a relatively solid innings while in charge of Implats. Take the last five years, for instance. Impala’s share price performance is flat but, relative to Anglo Platinum, it has outperformed the company it used to call “Number One.” Even now, Impala is the preferred platinum stock for some of the mining analysts Miningmx consulted.

Brown certainly dealt with empowerment in South Africa much better than Anglo Platinum which, as we speak, is trying to re-piece its empowerment deal with Anooraq Resources, while its Mvelaphanda Resources platinum experiment is now part of corporate history.

From the article entitled, “End of a Well Trod Road for Impala’s Brown” by David McKay of Miningmx. Miningmx is a leading online publication providing news, editorial and analysis on the African resources sector. The information provided herein has been provided to by the author and, as such, is subject to our disclaimer: CLICK HERE.

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