Exxaro Resources picked Ben Magara as its new CEO on Thursday, bringing in the head of the board’s investment committee just a month after Nombasa Tsengwa resigned over clashes with the board.
The mining veteran’s appointment comes at a critical time for Exxaro, as the company executes its growth blueprint to maximise the potential of its vast coal assets while seeking new streams of revenue to mitigate the risk of stranded assets in a decarbonising world.
“I am excited to have the opportunity to utilise our strong coal foundation as a base from which to expand our portfolio towards the critical low-carbon minerals essential for the future,” Magara said in a statement. “This is in line with our diversification strategy, which I have been part of as Exxaro’s nonexecutive director and investment committee chair.”
Magara, a mining engineer graduate who headed Lonmin a year after the Marikana massacre, moves to the executive suite after overseeing the strategic direction of the company as chair of the investment committee. He directly interacted with Tsengwa, the former head of the Exxaro coal division, who faced accusations of slowing down the diversification drive.
Tsengwa, a PhD graduate in agronomy, abruptly resigned last month, after the Sunday Times shone a harsh spotlight on her in December. Citing unnamed sources, it reported that nine executives had resigned or been suspended since she took over due to her management style and workplace culture.
In her resignation letter, she defended herself against claims of misconduct and fostering a toxic workplace culture. She also raised questions about the shift from initial accusations to new, specific allegations of conflict of interest. She questioned the integrity of the investigation, which was conducted by ENS, a law firm, saying it had a predetermined outcome.
Magara, who starts in April, is the founder of Africa Mining & Metals Group, an asset management firm focused on electric-vehicle battery metals such as lithium, copper and cobalt. He also serves as an independent nonexecutive director at Weir, a mining engineering company. He will step down from the board of Grindrod on conflict of interest grounds in the same month as he starts his new role.
“We are confident Ben will stabilise the organisation and continue to drive forward our growth and sustainability strategy, particularly with the knowledge he brings from being chair of our investment committee,” Exxaro chair Geoffrey Qhena said. “Ben’s deep experience as an engineer, mine manager, corporate leader and listed company CEO will all be invaluable to Exxaro, as we continue to maximise the value of our current assets while accelerating our prudent transition into a diversified minerals and renewable energy solutions business.”
Magara inherits a company that has underperformed both operationally and in the stock market. Its share price has dropped more than 10.6% in the past year compared with gains of 4.7% by its closest rival, Thungela Resources, as it navigates rising operational costs and lower commodity prices.
Exxaro reported a 36% drop to 3,016c in headline earnings per share as revenue hardly grew, logging a 5% increase to R40.7bn. The fall in profit was largely attributed to lower commodity prices, increased operating costs and higher depreciation charges. The miner, which also has interests energy and ferrous markets, declared a final dividend of 866c per share, and unveiled a R1.2bn share buyback programme.
Exxaro’s share price initially gained as much as 6.2% but pulled back as investors looked past the operational performance and focused on the shareholder rewards, about 31% of which would flow to its biggest shareholder Eyesizwe. The shares closed 1.48% up.
Riaan Koppeschaar, who held the CEO role temporarily after Tsengwa’s exit, will return to his role as finance director.
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