The best-performing mining CEOs in South Africa

Harmony Gold CEO Peter Steenkamp is the best-performing mining CEO among South Africa’s largest miners. Since he took over, the company has delivered an annualised return of almost 30%.

Over the past decade, South African mining companies have been on a rollercoaster ride, experiencing significant vitality with impressive highs and deep lows.

The resources sector is particularly difficult because its performance depends on global commodity prices and demand.

Therefore, high prices for some resources, like gold, could generate strong revenue, but slumps could cause significant financial strain.

In South Africa, miners are beholden to these global external forces and subject to domestic challenges like load-shedding and logistics failures, which can severely hamper their performance.

Overall, mining production in South Africa has declined, particularly in gold, which has experienced a long-term downward trend.

There have also been bright spots with the increase in the production of platinum group metals (PGMs), coal, and chromium.

South Africa once had a reputation as a mining powerhouse, dominating the production of minerals from gold to diamonds to platinum. 

However, this reputation has fallen apart over the past decade, as issues such as volatile labour relations, disputes with surrounding communities, organised crime, and regulatory uncertainty plague the industry. 

The Fraser Institute, based in Canada, conducts an annual survey on the attractiveness of different countries as mining jurisdictions. These days, South Africa ranks among the ten least attractive mining destinations.

The financial ecosystem that supported junior miners in years gone by has also largely disappeared. 

Local investors have limited appetite for supporting early-stage mining companies, and global investors have little appetite for investments in South Africa. 

Little exploration is done despite geologists estimating that a rich natural bounty remains. 

The evidence is in the form of declining mining production—the volume of stuff pulled out of the ground—over the past twenty years. 

Excluding gold, largely mined out, makes the picture somewhat better, but not much. 

In contrast, Australia, not facing the same physical and institutional bottlenecks as on this side of the Indian Ocean, has doubled output over this period.

This contrast is shown in the graph below. 

These conditions have put intense pressure on mining CEOs to turn the situation around and keep their companies profitable.

Many have failed at this task, with some coming under scrutiny for overspending during periods of high demand and then having to dramatically cut costs when the tide turns.

In particular, many local mining companies have turned to job cuts to lower costs at their operations.

For example, Sibanye-Stillwater has announced job cuts in two waves over the past year:

• In October 2023, the company cut around 2,000 jobs at its PGM operations in South Africa following a decline in metal prices.
• In April 2024, Sibanye announced a planned restructuring of its South African gold operations that could result in job losses for up to 4,022 people.

There are also few signs of an improved operating environment in 2024, with research from BMI indicating that, after a decline in 2023, the South African mining industry is projected to face a further contraction in 2024.

This is due to persistent challenges linked to power supply disruption, rail and port bottlenecks, and a weaker outlook for coal prices weighing on the sector. 

The organisation explained the coal industry represents a large portion of the broader mining market in South Africa. Therefore, offsetting the losses resulting from the sector’s structural decline in the coming years will be challenging.

However, amidst these tough times, some CEOs have largely managed to weather the storm, with their companies showing impressive share price growth during their tenure.

Mining companies by share price performance

Below is an overview of the mining companies’ share price performance under their current CEOs.

Overall, gold producers have been some of the most successful miners in terms of share price, likely due to record gold prices experienced over the past few years.

Note that Gold Fields CEO Mike Fraser was omitted from the list because he only became CEO at the start of this year.

Harmony Gold’s Peter Steenkamp has achieved an impressive 29% return since he took the helm in 2016. He is followed by AngloGold Ashanti’s Alberto Calderon, who has been CEO since 2021.

The worst-performing CEOs in terms of share price performance have been Sibanye Stillwater’s Neal Froneman, Anglo American’s Duncan Wanblad and Kumba Iron Ore’s Mpumi Zikalala.