South Africa’s Public Investment Corporation (PIC) is pushing for two seats on the board of Mining company Lonmin by year end, and has suggested the platinum miner move its main listing to Johannesburg, its chief executive officer, Daniel Matjila, said.
Matjila, told Reuters in an interview, “We are more concerned about leadership. The chairman and the board should understand the challenges the company is facing and the role of the board and the executive should be clearly defined,” he said.
“We are a 30% shareholder, so we can ask for at least two board seats. We will do it soon. It has become an urgent matter now,” CEO Matjila said.
In a recent meeting, PIC’s state shareholders, keen to keep jobs in South Africa’s mining industry, had expressed concern about its exposure to Lonmin and what action was being taken to “to mitigate risk”.
“We don’t wish to exit. Let’s put representatives on the board to at least give guidance to management, to start taking the right decisions needed to stabilise the company and take it forward,” Matjila said, during the meeting.
Lonmin spokesperson, Wendy Tlou, said in a statement,”We would not want to comment on any statement the PIC might wish to make as we do engage with the PIC regularly as a shareholder.”
Lonmin, majority-owned by state-run PIC and listed in London since 1961, has been hobbled by persistently low platinum prices, rising costs and strikes, forcing it to tap investors three times in the last eight years.
Lonmin, which is the world’s third biggest platinum producer with output 650 000 oz in 2017, carrying out an operational review to boost margins by selling off assets and laying off employees.
Its shares lost more than a third of their value on Nov. 3 after the firm delayed full-year results to complete the review.
Lonmin said this month it had enough liquidity to fund the business through the review process. But analysts at Goldman Sachs and Citi, among others, have said Lonmin needs a cash boost urgently to ensure its survival.
The firm’s liquidity crunch has eclipsed improvements in mine performance and a rise in net cash to $103-million at the end of September from $86-million at the end of June. The 2015 cash call steadied Lonmin’s finances but the miner has still struggled since then. Lonmin’s shares closed at 66p on Tuesday, hovering near their lowest on record. The stock was trading above £12 at the start of 2011.