Exxaro appoints former Lonmin boss Ben Magara as CEO, much to NUM’s displeasure

Former Lonmin boss Ben Magara has been appointed CEO of coal producer Exxaro Resources, which has just gone through the throes of a bruising C-suite scrap that saw Nombasa Tsengwa resign from the post last month, a move that angered the National Union of Mineworkers (NUM).

Read more: Loaded for Bear: Exxaro’s CEO saga hobbles its diversification drive and may stoke labour tensions

The NUM, which staunchly backed Tsengwa, expressed its displeasure on Thursday at the appointment of Magara, whom it regards with suspicion from his time at the now defunct Lonmin as well as his current role as a non-executive director at Exxaro.

The NUM believes Exxaro is on a mission to replace permanent workers with contractors and that Tsengwa — who faced management allegations of bullying and intimidation — stood in the way. Magara, the NUM believes, has now been tasked to carry out that strategy.

“The NUM is opposed to Magara’s appointment. He was responsible for the mess at Lonmin,” NUM Highveld Regional Secretary Tshilidzi Mathavha told Daily Maverick.

“Tsengwa was pro-worker and was trying to prevent outsourcing at Exxaro. The board pushed her out to make way for Magara, who is part of the board. They orchestrated the move to get her out and bring him in. What they are doing is not in the interest of the business or the workers,” said Mathavha.

Trust between the NUM — the biggest union by a country mile at Exxaro — and the board is frosty to say the least, so selecting a member of that same board to be CEO was bound to make the union see red.

Exxaro in response to Daily Maverick's queries about the union's concerns regarding outsourcing did not directly answer the question but provided a comment from Chairman Geoffrey Qhena that the company was engaging with NUM.

“NUM is one of our key stakeholders and we will engage with them to understand their departure point, and from that engagement we are comfortable that we will find each other," Qhena said.

Magara will have a sense of déjà vu as he once again takes the reins at a mining company against the backdrop of simmering union resentment and a challenging economic and market environment.

Flames of unrest

A Zimbabwean whose affable exterior conceals a steely interior, Magara assumed the helm at Lonmin in the wake of the 2012 Marikana massacre which saw police shoot dead 34 miners during a violent wildcat strike.

Tensions between the militant Association of Mineworkers and Construction Union (Amcu) and management at the troubled platinum producer were raw, and Magara was brought in to douse the flames of unrest which threatened to engulf Lonmin.

He forged good relations with Amcu’s charismatic leader, Joseph Mathunjwa, who had spearheaded his union’s often bloody campaign of dislodging the NUM from its once dominant labour position in the platinum shafts.

That did not stop Amcu from launching a five-month strike against Lonmin and other platinum producers in 2014, and Magara’s overtures to Mathunjwa alienated other unions, which felt they were being cold-shouldered by management.

Lonmin never recovered from the horrific events at Marikana and numerous rights issues failed to arrest its decline. In fairness to Magara — a mining engineer who is regarded as a capable operator — there was probably little he could do with a company that had been rendered toxic in the eyes of many investors because of its association with the massacre.

Lonmin was swallowed by Sibanye-Stillwater in 2019 and Magara has kept a relatively low profile since.

He now finds himself back in the spotlight and must navigate union antagonism while trying to find opportunities for Exxaro’s drive to diversify its asset base from coal.

“I am honoured to be taking up the role of Exxaro CEO and 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,” said Magara.

“This is in line with our diversification strategy which I have been part of as Exxaro’s non-executive director and Investment Committee chairman.”

Unveiling its annual results on Thursday, the company said it was in talks with several parties to acquire its first manganese asset in South Africa.

Exxaro’s headline earnings for the year fell by 36%, in part a reflection of lower coal export prices, and so Magara once again finds himself jumping into the hot seat in a tough market. Platinum prices were depressed during much of his tenure at Lonmin — another key reason for the company’s woes.

Magara assumes his new role on 1 April and will need to hit the ground running. He may find this time round that the NUM is as tough a challenge at Exxaro as Amcu was at Lonmin. DM