Lonmin Picks Amplats’s Magara to Revive Platinum Producer
Lonmin Plc (LMI) appointed Ben Magara as chief executive officer as the third-biggest platinum producer seeks to rebuild following last year’s violent strikes.
Magara, who starts on July 1, is currently the executive head of engineering and capital projects at Anglo American Platinum Ltd. (AMS), the largest producer of the metal, Johannesburg- based Lonmin said today in a statement. Simon Scott, who had temporarily taken over the duties of former Lonmin CEO Ian Farmer who was hospitalized in August, will resume his role as chief financial officer.
The new CEO will be charged with steering Lonmin’s recovery from last year’s $698 million loss which led it to cut expansion plans and renegotiate debts. Worker tensions at Lonmin mines resurfaced last month as labor groups competed to add members, in an echo of a dispute that resulted in 44 deaths last year.
“It’s difficult to describe him as an obvious choice, but based on his experience he’s a good choice,” said Michael Kavanagh, a Cape Town-based metals and mining analyst for Noah Capital Markets. “His experience in the industry should bode well.”
Before joining Anglo American Platinum, Magara was CEO of Anglo American Plc (AAL)’s South African coal unit.
A six-week walkout last year at Lonmin’s Marikana operation, about 170 kilometers (106 miles) northwest of Johannesburg, resulted in the loss of an estimated 110,000 ounces of platinum production, the company said. Marikana is in the Rustenburg region, site of the world’s largest platinum reserves. On the same day Farmer was hospitalized, police shot dead 34 protesting miners at Marikana in the worst mine violence seen since the fall of apartheid.
Farmer, who had been Lonmin’s CEO for four years, resigned in December. The company appointed an executive search company to find a successor.
Lonmin’s pick of Margara is “pretty non-controversial” in terms of the labor unions, according to Peter Major, head of mining at Cape Town-based Cadiz Corporate Solutions. “He’s kind of perceived as neutral.”
It’s cost-effective output that the company will need to focus on, which could still present a challenge for Magara, Major said. “He’s not really a production guy. What this place needs is to get producing.”
Lonmin declined 0.7 percent to 288.80 pence as of 2:26 p.m. in London.
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