Tough task for new Implats boss Nico Muller - Business Day
The Implats board has hired an outsider with a turnaround track record to shepherd it through its transition.
Mining engineer Nico Muller has taken on one of the toughest jobs in the South African mining sector, heading Impala Platinum (Implats) as it faces the transition to three new shafts, one of which is in Zimbabwe, and bringing the company to its full potential at home.
Muller, who as the Gold Fields executive vice-president for SA successfully restructured the troubled and underperforming South Deep mine, will take over as Implats CE on April 3 next year, filling the gap left by Terence Goodlace who left at the end of November.
The Implats board deemed it important to hire an outsider with a fresh perspective, with one of the key focuses being the return of the mines around Rustenburg to their optimal performance to bring Implats to capacity of 830,000oz of platinum from 2020, chairman Mandla Gantsho told Business Day in October.
The Rustenburg mines have underperformed due to safety transgressions, fires and age.
Implats wants its flagship Rustenburg operation to deliver 715,000oz of platinum in 2017 compared with 2016’s 627,000oz. "The board believes the Rustenburg lease area is an asset that could perform better. It’s an area that needs special attention," Gantsho said.
Muller’s appointment was cautiously welcomed by analysts, who pointed to his strong operating credentials and said the perception was he had "left Gold Fields high and dry with one of its most difficult mines at a critical time".
From managing a single mine with twin shafts at South Deep, Muller will now be overseeing 22 shafts, excluding the partially built and stalled number 17 shaft in this country and the yet-to-be built $264m Mupani mine in Zimbabwe.
One analyst, who declined to be named for company policy reasons, said Muller was a serious operator with the human touch necessary to bring out the best in his teams — something he would need to command the respect and loyalty of the GMs of the mines. However, said the analyst, he was not close to the downstream market for platinum group metals and lacked the deal-making skills that Implats may need in the future.
"Nico's first love is platinum group metals (PGMs) and his track record in PGMs is excellent," a second analyst said. "He knows that industry inside out, with many proper relationships still intact."
Muller was moving out of the gold sector at a time when interest rates, particularly in the US, were starting to lift off all-time lows, which was negative for gold as investors started looking at other investments, whereas the analyst said prices for PGMs were at the bottom of the cycle and would improve in the next two years.
"Although Implats is also a tough nut right now, Nico now sits on top of the pile – he gets to direct the pressure to others that need to deliver, which is quite different from him being directly in the firing line at Gold Fields," the analyst said.
A company insider said Muller’s time as chief operating officer at neighbouring Royal Bafokeng Platinum (RBPlats), which has already let Implats mine part of its property, could open the way for greater cooperation between the companies if Anglo American Platinum, a partner of RBPlats, allowed it.
Muller will have to oversee the closure of the remaining four old shafts over the next three years and safely steer the new and delayed number 16 and 20 shafts into production, adding 300,000oz of platinum a year.
He will also have to steer the group in restarting serious development of the suspended number 17 shaft and the old Leeuwkop project the company bought from Afplats a decade ago to ensure a pipeline of production into the future.
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