Lonmin CEO Resigns

Ian+Farmer

VENTURES AFRICA – Lonmin’s CEO, Ian Farmer, resigned on Friday because of a “serious illness” that saw him hospitalised during a violent labour unrest at the company’s Marikana mine a few months ago.

This brings to a close the world’s third biggest platinum producer’s tumultuous year with a search for a new chief executive officer.

It has emerged that the trouble-hit platinum miner would seek external candidates to run the company. Farmer has been out of action since August shortly before the labour strike got deadly, leaving more than 44 people dead.

Interim boss Simon Scott, the miner’s finance chief, has ruled himself out of the running. It has been a turbulent year in the boardrooms of mining companies, leaving big names such as Xstrata’s Mick Davis and Anglo American’s Cynthia Carroll looking for work.

Both have the requisite experience to take charge of Lonmin, given that Anglo has a large platinum business and Xstrata owns a 25 percent stake in the miner already.

Xstrata called for the appointment of a new chief executive earlier this year as a condition of supporting Lonmin’s £507 million ($849 million) rights issue. This followed an unsuccessful attempt to take control of Lonmin even while Xstrata was in the middle of its own takeover by commodities trader Glencore.

Xstrata boss Mick Davis has put aggressive demands to Lonmin chairman Roger Phillimore, calling on him to “refresh” the company board and management team ahead of Lonmin’s R7.2 billion ($849 million) rights issue.

Davis accused Lonmin of the “destruction” of Xstrata’s shareholder value in the group and demanded changes in Lonmin’s board and management “promptly” after the rights issue.

He asked the Lonmin board to engage and co-operate with major shareholders to commence this process, refresh the board, strengthen the management team and overhaul the current business plan so that a realistic strategy to restore shareholder value can be developed.

Analysts said if Lonmin’s management refused to budge, Xstrata might have to make a bid for Lonmin. Cadiz analyst Peter Major said Lonmin Lonmin needed a tougher mining guy than the acting CEO, Simon Scott. “The company needs to get back to basics and start making some money,” said Major.