April 2, 2013 4:58 pm

Lonmin picks new chief to face pay talks

Mine workers take part in a march at Lonmin's Marikana mine in South Africa's North West Province September 10, 2012. Around 10,000 striking South African platinum miners marched from one Lonmin mine shaft to another on Monday, threatening to kill strike breakers, as another illegal stoppage hit Gold Fields, the world's fourth biggest gold miner. Wage talks to end the month-long Lonmin strike, which erupted in deadly violence last month, failed to start as scheduled. The independent labour mediator said it could only take part in the process if workers returned to work by a Monday deadline, but the vast majority stayed away.©Reuters

Workers on the march at Lonmin’s Marikana mine

Lonmin, the London-listed platinum miner that was at the heart of last year’s wave of wildcat strikes in South Africa, has appointed a new chief executive.

Ben Magara, who is currently executive head of engineering and capital projects at Anglo American Platinum, will take over the post from July 1, the company said. He will replace Simon Scott, who has been acting chief executive since last August after filling the position when Ian Farmer, the previous chief executive, was diagnosed with a serious illness.

Mr Farmer’s health problems surfaced as the company was grappling with a wildcat strike at its mine complex in Marikana. The industrial unrest escalated dramatically after police shot and killed 34 protesters on August 16. The strike ended in September, but only after Lonmin had pledged to raise the salaries of several categories of miners by between 11 and 22 per cent.

The agreement sparked concerns that it had set a dangerous precedent and the unrest spread across the gold and platinum sectors.

Lonmin and other platinum producers were already struggling with spiralling costs and a subdued pricing environment. The company secured a financial lifeline when it successfully raised $800m in a rights issue in November after fending off a reverse takeover bid by Xstrata, which has a 24.5 per cent stake in Lonmin.

But it remains a tough climate for platinum producers as costs continue to rise while the industry is heavily exposed to the eurozone crisis, with the precious metal mainly used for auto catalytic converters.

Ben Magara

46-year-old Zimbabwean with 22 years’ experience in the mining industry

Current position: Executive head of engineering and capital projects at Anglo American Platinum

Previous position: Chief Executive of Anglo Coal South Africa

He has a degree in mining engineering from the University of Zimbabwe and has been a director of Anglo American South Africa since 2006.

Married with two children

One of Mr Magara’s key challenges will be seeing the company through two-yearly wage negotiations, which are expected to take place around June against a backdrop of increased worker militancy and fragmentation of the labour force.

A newish, more militant union, the Association of Mineworkers and Construction Union, has made strong inroads in the sector in the wake of last year’s unrest and now has more than 50 per cent representation at Lonmin’s operations, and similar figures with other platinum producers.

Roger Phillimore, Lonmin’s chairman, told the Financial Times that “the industrial relations climate is something we are watching and doing everything we can to manage properly”.

He described Mr Magara, 46, as a “people person and a listener” who would bring experience of the sector – and its challenges – to the post.

“What he’s doing for Anglo Plats at the moment indicates his ability in dealing with government, trade unions and stakeholders. Obviously the wage negotiations are something that’s going to be an issue,” Mr Phillimore said.

“As a seasoned hand in the platinum industry with Anglo Plats, and frankly having to deal with all these issues, he brings a wealth of experience to a situation that in detail will be different but in terms of climate is the same.”

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