Patrice Motsepe

The most interesting development regarding Patrice Motsepe last year was that - according to him - he was overruled by his board in his desire for African Rainbow Minerals (ARM) to follow its rights in Harmony Gold’s R3.47bn share issue, designed to pay for the purchase of the Mponeng and Mine Waste Solutions assets from AngloGold Ashanti. ARM owns a 13.8% stake in Harmony which it has held since 2003.

Motsepe, the non-executive chairman of Harmony, has loyally clung to that shareholding through some tough times. In fact, he has repeatedly shot down suggestions by analysts that ARM ought to dispose of the Harmony investment which has seriously under-performed for long periods. So the decision by ARM not to follow its rights is all the stranger given that the Harmony share price took off last year along with the gold price. The purchase of the Mponeng mine was one smart move. Surely that was the time for ARM to step up the plate, assist its long-term ally, and actually make some money for a change?

Quizzed on this decision at the ARM annual general meeting in August, Motsepe said his board ruled there was a greater need to preserve cash. Cash in ARM is being held back for possible acquisitions - in particular in the copper sector - but Motsepe has been hinting at such acquisitions ever since the group exited its disastrous involvement in the Lubembe mine in Zambia. So far, nothing material has emerged on that front. It all sounds a bit odd. Did the board really find its collective spine and tell the boss where he gets off? Or should we read something else into these developments?