Table 3.6: Importance ratings for different risk factors (Impala)

Table 3.6: Importance ratings for different risk factors (Impala)

Geo

DB DE LP PD Avg Avg STDV

I I I I

I I I I I

Operational upsets (Furnace shutdowns, ,

flooding etc.) 5.5

Asset risks (mine slides, fires, explosions etc.) 6

I I I I I

Relationship with labour unions 5.75

Electricity supply fl r! 3 5.9

I I I 1 _ •

- rights, nationalisation,

120litical stability) 5 4.8

Source: Researcher's own compilation

The following conclusions can be drawn:

• Impala Platinum's executive committee regards health and safety, environmental risks and human resources and skills as the biggest risks to shareholder value (red) .

• Operational upsets, relationships with unions, asset risks, relationships with labour unions, electricity supply and political risks are seen as medium risks (grey).

• Decline in product demand is seen as a very low risk. This is a sign of confidence in future product demand (green).

64

3.2.2 Anglo Platinum

Only one respondent from Anglo Platinum's executive committee completed the questionnaire. July Ndlovu (Director of operations) gave his view of the items discussed in the questionnaire.

Risk

0)1 Managing risk is of paramount importance to Anglo Platinum. The following order of importance was provided:

Table 3.7: Importance ratings for different risk factors (Anglo) IN

I

Op'erational upsets (Furnace shutdowns, looding etc.)

I

6 Asset risks (mine slides, fires, explosions etc.) 5

I

4

I I I

Source: Researcher's own compilation

67

Fig. 3.6: Comparison between R/oz and $/oz platinum market price

Daily Pt prices

I

- $/Ol - R/Ol

I

2500

- r - - - ---,-

²⁰⁰⁰⁰

18000

2000 -/---flfJIII~ ....l _ - - - --+ 16000

14000 1500 t--~~_,FT_---_Jj._---"i::;""'~f_...e ;D't 12000

10000 ~

IX

1000 -/-- - - ---ill-f--'--ad- - - --+ 8000

6000 500 -\-- - - --+ 4000 2000

0 0

.... .... .... ....

^{00 00 00 00 00 00 C1\ C1\ C1\ C1\ C1\ C1\ 0}

,..,

^{0 0}

,..,

⁰

'i' C 'i' 'i' 'i' !Ill 1:: u Cl>

~

Cl> ~ Do 'i' 'i' 'i' 'i' ^C ~ ^!Ill 1:: ^u Cl> .i:l ⁰ Cl> ~ Do 'i' 'i' 'i' 'i' c !Ill 1:: u Cl> .b Cl> ^";' D.. C :;^";'

<t ^{0 C LL} <t ^{0 C LL} <t _'7 <t ^{0 C LL} <t _'7 '7

,..,

~ ^{~ ~ ~ ~ ~}

,.:. _J:, J.. _~

..:.

^{N "f.}

_,.., ^..:.

0 .;, _.0 J:, ,.:. ^ID ~ ,;,

..:. ..:. .... _....

.... .... ^{,.., ,.., ,..,} .... ....

^J..

Source: Researcher's own compilation The evolution of each individual company's share price is evaluated below, after which a summary is provided to show how companies succeeded (or failed) in optimising shareholder value during the recession period.

78

3.4.1 Anglo Platinum

Fig. 3.7: Anglo Platinum share price compared to Rloz price

Anglo SP vs Pt price

160,000 20,000

18,000 140,000

16,000 120,000

14,000

... ...

_{<: 100,000}

III 12,000

~ &:.

u N

III 80,000 10,000 ₀

.~ ...

~ 8,000 a:

60,000 .r.

"'

'"

^6,000

40,000

4,000

20,000 2,000

0 0

... ... ... ... co co co co co co en en en en en en 0 0 0 0 0 0 _{9 9} 0 0 0 0 ₉ 0 ₉ 0 0 0 ₉ 0

.... .... ....

_";'

.:., u 1> i:. .:., .J:J i:. .:., .lJ ^~ i:.

i:. 1:: ;i 1:: ;i 1:: Q. :;

:::0 :::0 III III :::0 :::0 ~ III :::0 :::0 ~ III :::0

..

_... ^< _.;,

^q

_in ^c _.l-

^...

_N ^< _N

.. _....

^~

^q

^c

^...

^{~ <}

^q

^{c '+ ~}

.. .. ....

0 en 00 .;, ...

d:

.;,

...

^..;,

^....

^N

^.... ....

.... .... .... .... .... .... ^.... ...

- AngloSP - PtR/Ol

Source: Researcher's own compilation Fig. 3.8: Anglo Platinum share price compared to $Ioz price

Anglo SP vs $/oz Pt

160,000 2,500

140,000

2,000 120,000

~ <: 100,000

III 1,500

~

c:

u III

80,000 ₀ ^N

.~ ...

~ 1,000

'"

60,000 .r.

"' '"

40,000

500 20,000

0 0

... ... ... ... co co co co co co en en en en en en 0 0 0 0

0 0 0

.... ... ^....

9 9 9 9 9 9 9 ^";'

<: 9

..

^{u ~ <:}

.. ^<t

^~

^'l

^i:.

..

^{t; u .lJ Q..:. i:. :;}

:::0 :::0 1:: III III ;i _{:::0 :::0}

~

III III Q. :::0 :::0 III III :::0

0 c

...

⁰

...

c

... .. ..

..

^{< ~ < c ~ ~ 0 ~}

^....

... .;, .;,

...

^{N N}

^:::

0

en

00 .;, _...

d: ...

^{..;, ,.!, N}

^.... ....

... .... .... ... .... .... .... ....

ⁱⁿ

- AngloSp - $/01

79

3.4.2 Aquarius Platinum

Fig. 3.9: Aquarius Platinum share price compared to Rloz price

Aquarius SP vs Pt price

16,000 20,000

18,000

14,000 +-- - - - ---.-- - - --j

16,000 12,000

14,000

~ 10,000 +---++--=---'l---:--,....,.~--I

'"

^12,000

~

'"

.~

Q. ^{8,000 10,000}

0:

N

... 0 Ill::

~

"'

..c: 6,000 8,000

III 6,000

4,000

4,000 2,000

2,000

°

r-.

°

er

_&::

,.:...O!

...

r-. 0

.:0 :::J

et ,J,

...

r-.

er

1:: 0 .;.

...

r-. 9 _u

'"

0 .i­

...

co 0

1>

'"

N

...

...

co 0

et

li

N

...

co 0

r:.

:::J

"7

... ...

co 9

I>Il :::J

et .:,

...

co 0

0

t:

a.

co 9 _u

'"

00 0

0"1 0 oD

'"

...

J,

0"1

'Z

Q.

et ,.:..

0"1 0

r:.

:::J

"7 ID

0"1 0 .:0

:::J

.;. et

0"1 0

t:

0

or

0"1 0 6

'"

....

0 0

...

oD

'"

'+

...

0

...

_~

Q.

et N

0

... _r:.

:::J

...:.

0 0;<

:;

"7

... ....

- Aquarius SP - Pt R/oz

Source: Researcher's own compilation Aquarius's share price experienced a much steeper original drop in share price than some of the other companies. Other remarks include:

• Recovery growth rate lower than growth in $/oz and also slightly lower than R/oz.

• June 2010 share price levels still considerably lower than baseline (Second half of 2007).

81

VI

3.4.3 Impala Platinum

Fig. 3.10: Impala Platinum share price compared to $/oz price

Impala SP vs $/oz Pt

40,000 , -- - - -- , - 2,500

35,000 +--- - - - . .H - itA-- - - -1 2,000

30,000 +---~~~~._---~

"iii'

~ 25,000 +--,;---a:-::I--::;;,o~---_...__---_+\ihoF_-'---w1O\____l

0/ 1,500

~

.~ 0/ 20,000 o

...

D. _<I>

-

~ 1,000

~ 15,000 ~---''It____.¥___;_:~'--=---1

10,000 +-- - - --1"-1-- - - ---1

500 5,000

°

^... <;> ^... <;> ^... ₀ ^{... co co} ₀ ^co <;> ^co <;> ^co ₀ ^co <;> ^{en en} ₀ ^en <;> ^en ₀ ^en <;> ^{en 0}

... ... ...

^{0 0 0} '";'

°

I:

...

_:>

tl ^'Z

0/ ^~ 0/ ^~ D. ^I:

...

:>

tl

^u 0/ ^~ 0/ ^~ D. ^I:

^.:.

:> t:l

^'Z

0/ ^.D 0/ ^~ D. ^C 3

~ 0 ^Q

...

_"f. ~ ^{0 Q}

...

"f. ^{:> et 0 Q}

...

"f. ^~

::;

,..:.. .;, _N N

...

^"f. cf. .,0 .;, ... ;b _.;, ~

..:.

^N

..:.

... ^l ... ... ... ... ...

^~

... ...

^{0 M .."}

- lmpalaSP - $/oz

Source: Researcher's own compilation Impala Platinum's share price followed the evolution of the $/oz price very closely except for the growth period in the first half of 2010. Other remarks:

• Impala Platinum's June 2010 share price is just below baseline levels.

• Impala's share price also seems to be less volatile than some of the other companies.

82

3.4.4 Lonmin

Fig. 3.11: Lonmin share price compared to $/oz price

Lonmin SP vs $/oz Pt

70,000

, - - - --r

^2,500

60,000 +--J....- - - -f i -- -I1-- - - -_ I 2,000 50,000 +---l.---:. .- - I-E1Ho11. . . .,...,. , - - - --l

...

VI_c:

1,500

~ 40,000 1----:-~~-'--'---'\a--lI---_/f!Ito.~~---l

.~

a

^{~ 30,000} -t---''-l+--..."..III-~----'''---_I

-­

<h ^{N o}

1,000

RI .J:.

III

500 10,000

° .... ....

_{'i' 0 'i'}

.... ....

_'i' ⁰⁰ 0 00 00 _'i' 00 _'i' 00 _{'i' 'i'} 00 en 0 cn _'i' cn _'i' ^en 0 ^en _'i' ^{en 0}

... ... ...

^{0 0 0} _~

°

c:

.:.

_1:: ^u Qj

..c

Qj ^~ Q. c: ^1>1) 1:: ^u Qj

..c

Qj

a

c:

.:.

^1::

'Z

^Qj

..c

^{Qj .!. Q.}

c

3

:> :> :> :> :> :> :>

et 0 C u. et 0 c ^u. et 0 c ^u. <f '7 '7

;:::

_.;, ,;, .t ...:. ...:.

...

^'7

...

^{<f 0}

^a.

^{cO J, ,..:. ;b <f .t M .; N}

...

M

...

... ... ... ... ... ... ... _'"

- LonminSP - $/oz

Source: Researcher's own compilation Lonmin's share price performed far below the market price of platinum in both Dollar and Rand terms. Other remarks include:

• Very sharp decline from pre-recession baseline period.

• Very slow growth since trough period.

• Considerable drop in value from baseline period to June 2010.

83

3.4.5 Northam Platinum

Fig. 3.12: Northam Platinum share price compared to $/oz price

Northam SP vs $/oz Pt

9,000 , - - - --,- 2,500

8,000

2,000 7,000

VI 6,000

'l: Cl> 1,500

~ 5,000 -t---IkIIbd:---t---f:Im---:--,.F1-:JI~_:_J"__l:_--1 Cl>

.~

a

^4,000 +---Y'--=---rth---.J'---II'''----..I\!L""I:-:-I''~---j ...<h N o

~ 1,000

'"

~ 3,000

2,000 -t--- - - --'-W"T:JI - - - ; - - - -- I 500

1,000 -+-- - - -- - - ---1

° _"

₀

.., .., .., .., .., ..,

<n <n <n <n <n <n 0

....

⁰

....

^{0 0}

°

'i' _c

"

.:a

^'i'

" ^"

'i' _u

~ 'l

^'i' c 9

...,

^{9 9} u

%

^{~ 9 c 9}

...

^{9 'i' u .lJ '";'}

c

^'";'

::I ::I t:l _{Cl> Cl>} D. ::I ::I t:l Cl> Cl> D. ::I ::I t:l _{Cl> Cl>}

a

::I :;

a c

...

^c( "7 ^a c

...

^{c( c(} c

...

<f- ^{"7 "7}

;:::

<f- ,;, ..t ^{,.:., ,.:.,}

.... _~ .n

^{J, ,.:.. ;i;} ,;,

~

^{,.!, N}

....

M

....

....

^\0

.... .... .... .... .... .... ....

^{cO rh}

- NorthamSP - $/oz

Source: Researcher's own compilation Northam experienced exceptional growth since the trough period (Nov/Oec 200) . Growth since beginning of 2009 outpaced growth in $/oz, as well as R/oz market prices. Other remarks include:

• Northam showed higher volatility than Impala.

• The June 2010 levels were at the same level as baseline period.

84