Impala CEO David Brown Resigns From World’s Second-Largest Platinum Miner
Impala Platinum Holdings Ltd. (IMP) Chief Executive Officer David Brown will quit with a five-year record of maintaining its share price amid a slump in the metal that carved as much as two-thirds off the valuations of its rivals.
The producer of a quarter of the world’s platinum fell in Johannesburg trading after saying today in a statement Brown, 49, would leave on June 30 “to pursue his own interests.” The board has identified a successor and is completing preparations, Chairman Khotso Mokhele said, without naming the replacement.
Among industry directors with experience as CEO of a mining company is Terence Goodlace, head of copper producer Metorex Ltd. (MTX), whose shares stopped trading in Johannesburg yesterday following the company’s takeover by China’s Jinchuan Group Ltd.
Impala, which appointed Goodlace to its board in August, was the biggest loser among the top 40 stocks by the close of Johannesburg trading today, declining by 2.5 percent to 171.45 rand and giving the company a value of 108 billion rand ($13.5 billion). Anglo American Platinum Ltd. (AMS) rose 0.5 percent and Lonmin Plc (LMI), the third-largest producer, gained 2 percent.
Brown has had to contend with government demands in South Africa and Zimbabwe, location of the largest platinum reserves, for control of domestic assets to be passed to local people. He also dealt with a 39 percent slump in platinum prices in 2008 as a six-year commodities rally ended, cutting producers’ profits.
“I’m sure his departure would be a great loss to the company,” Cor Booysen, a senior research analyst at HSBC Securities (South Africa) Pty. Ltd., said by e-mail. “He added significant stability to Impala through some difficult times.”
Brown told Bloomberg last year that unrealistic prices for the few assets it was interested in were curbing efforts to grow the business. He failed in 2010 to take over Royal Bafokeng Platinum Ltd. (RBP) with a bid of almost 20 billion rand.
“I have got a number of options,” he said in a telephone interview today, adding that while he would like to remain in the industry, there are possibilities for him in other areas.
Brown, a chartered accountant, was appointed as Impala’s chief financial officer in 1999 and CEO on Sept. 1, 2006. Its shares have risen 2.7 percent since then, against a 28 percent drop in Anglo American Platinum and 64 percent slump in Lonmin.
The company, which operates the world’s largest platinum mine at Rustenburg in South Africa’s Northwestern Province, was also the only gainer among the top three producers of the metal in Johannesburg trading last year. It rose 15 percent, compared with Anglo’s 10 percent decline and Lonmin’s 12 percent slide.
Impala is rated as the top pick among large platinum miners at HSBC, Macquarie First South Securities (Pty) Ltd. and SBG Securities Ltd. Six of 16 analysts recommend buying the stock, while two say sell it, according to surveys Bloomberg compiled.
Brown “successfully guided the group through the difficult business environment of recent years, maintaining a strong balance sheet while ensuring a balance between investment and returns to shareholders,” Impala said. He was “instrumental in the development of Implats’ Zimbabwean assets,” it said.
Impala faces challenges in boosting production in Zimbabwe, which has the second-biggest platinum reserves. In addition to requiring local control of foreign operations, the nation raised royalties last year. It will also ban exports of unrefined platinum, Deputy Mines Minister Gift Chimanikire said Dec. 27.
“I’ve got 5 1/2 months left and one of my priorities will be finding an amicable solution,” Brown said in an interview broadcast on SAFM Radio today. The CEO told Impala’s chairman that he wanted to leave two to three months ago, he added.
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