By Dawn Mokhobo, Chairperson of Wesizwe Platinum
By Dawn Mokhobo.
Despite the macroeconomic challenges that have delayed our production goals, Wesizwe remains committed to becoming a sustainable mid-tier producer of high-value PGMs and delivering a fair return to our shareholders. The previous year, 2022, presented a unique set of challenges as South Africa and Wesizwe continued to face systemic and mounting macroeconomic pressures. These have required the Company to remain agile and carefully re-assess our path to safely reaching our operational goals. We are acutely aware that we have not met our commitment to ramp-up production in the fourth quarter of 2022. We remain committed to delivering a fair-return for the risk taken by our valued shareholders.
The external environment
The Covid-19 pandemic exacerbated pervasive economic pressures and disrupted the ability of companies to productively utilise manpower, trade and develop. Entering 2022, we continued to navigate this environment, focusing on optimising our development activity and negotiating recovering global trade dynamics that impacted supply-and-demand in the value chain. Furthermore, the South African economy remains plagued by inflationary pressures, rising interest rates, an electricity crisis and poor municipal service delivery which dampened consumer confidence and led to increased operational costs. The interplay of these factors has hampered the Company’s ability to achieve our strategic objectives – most pressingly, achieving operational readiness. PGM markets experienced significant volatility and intra-year price movements. The continued challenges faced by the semiconductor marketplace and the global supply chain influenced demand and supply drivers. We remain optimistic that the PGM sector will continue to be resilient as prices remained relatively stable towards the end of the year, which hold a promise of high demand for our products once BPM becomes operational.
Progressing to operational readiness
Our strategic intent remains: To complete development, ramp up production and become a profitable business for our shareholders and investors. The achievement of this goal has not only been hampered by macro-economic challenges, but in January 2022, community unrest disrupted operations and caused significant delays in production. As a result, key contractors failed to meet set targets, delaying the achievement of milestones in the development of the mine and the commissioning of the processing plant. In response to the unrest, our management team prioritised the strengthening of our relationships with key stakeholders, including communities, labour unions and regulators to enhance engagement, resolve legitimate concerns, and build mutually respectful relationships. We reiterate our commitment to health and safety and continue to take proactive steps to prevent future incidents.
Our leadership and governance
Wesizwe continues to uphold the governance principles of King IV. To support this, the Board conducts an Annual Review of the Code of Ethics and Business Conduct to ensure that business is conducted in an ethical manner. The Company continues to focus on improving its prompt management of unethical practices, and to this extent, management provides regular reports to the Board. The Company continues to ensure that it focuses on compliance with the Employment Equity requirements set by the Department of Employment and Labour, the Department of Mineral Resources and Energy (DMRE) and the Broad-Based Socio-economic Empowerment Charter for the Mining and Minerals Industry (Mining Charter). Our management team, with the support of the Board, continues to work and ensure compliance with all relevant legislation. We remain committed to transformation initiatives that are impactful for all our stakeholders in the year ahead.
Our Executive team has faced significant changes in the past two years, with the resignation of Jacob Mothomogolo (Executive General Manager), Hamlet Morule (Corporate Affairs Executive) and Vasta Mhlongo (Company Secretary) in 2021, and the appointment of Long Zou as CEO and of Zhimin Li as Deputy CEO in 2022. Our CEO, Honglie Wang (May 2022 to July 2022) unfortunately resigned due to ill-health. We are committed to filling or formalising standing Executive Committee (Exco) positions in the year 2023 to enhance the autonomy, accountability and strength of our executive leadership and enhance the delivery of our operational goals. We welcome our new CEO, Mr Zou, and look forward to his leadership in guiding the business into the next phase of its development.
At a board level, Pengfei Li (Chair of the Remuneration and Nominations Committee) resigned in September 2022 and Qing Yu was appointed. On behalf of the Board, I wish to thank Mr Li for his service and insightful contributions for the past six years. This change in directors presented the Board with an opportunity to enhance gender diversity with the appointment of Ms Yu. The Board, however, remains committed to further improving its overall gender and race representation.
The Board and its committees will continue to support management in realising the Company’s strategic objectives by focusing on crucial performance areas, which include ramping-up production of the 1 Mtpa mine and processing plant with future endeavours to expand operations to a 3 Mtpa operation. The Board is set to approve and implement its diversity policy as we continue to focus on diversity and inclusion.
1 Mtpa mine > 3 Mtpa min
I would like to thank my fellow Board members for their contributions during 2022 which was a difficult year. We are grateful to our investors and communities for their continued support. In our 2023 journey, we acknowledge the presence of challenging decisions ahead. Despite these obstacles, our determination to ramp up-production remains unwavering.