AMONG the best of acknowledgements of Paul Dunne’s Northam Platinum was that shares it issued through a book-build attracted a mere 1% discount. Yes, it’s not an entirely fair comparison ... but match that against the 94% discount applied to Lonmin’s rights issue. The fact is that Northam is atypical in the South African platinum market as it’s cash flush following an R4bn BEE deal, it can boost low-cost production 50%, and even had its credit upgraded last year. Yet it’s not all beer and skittles for Dunne who knows at a platinum price of $900/oz he will not be able to sanction the R4.5bn Booysendal expansion the feasibility of which is due in May. It’s also unclear if Northam will have to impair assets at these market prices, as the rest of the sector is likely to do. There is also the issue of AMCU’s growing presence on Northam’s Zondereinde mine. Labour relations are one of the areas of concern Dunne has not properly addressed as yet. Nonetheless, a 13%, three-year wage deal with the NUM at Zondereinde takes the pressure off Northam whilst its colleagues sweat out wage talks in 2016. Dunne has taken Northam by the scruff of the neck, cashed it up, empowered it and given it new legs. Let’s hope he can keep the momentum going.
LIFE OF PAUL
Born in Lancashire, England, Dunne took his first job in South Africa at Buffelsfontein gold mine in 1987. He glided through the management ranks after joining Impala Platinum (Implats) becoming executive director for mining, concentrating and smelting at Rustenburg and Marula. Then came a volcanic conflict with Terence Goodlace, CEO of Implats, forcing Dunne into the grateful arms of Northam.
- Web Address: www.northam.co.za