Hadebe just resigned as the CEO of ESKOM citing unimaginable demands that have impacted his health, as reported by MiningMX. Hadebe’s resignation was “reluctantly accepted” by the Board, having been appointed only one year ago.
ESKOM, with massive debt and a history of bad decisions and corruption is clearly not only in deep trouble but has put the entire South African economy at risk. What had once been the shining star in Africa, is now unrecognizable.
As much as I am bullish on Sibanye-Stillwater with its remarkable portfolio of assets, including the Stillwater mine in the United States, and the insightful and disciplined leadership provided by Neal Froneman, the ESKOM situation, (along with other local challenges) explains why South African equities trade at a huge discount to their non-South African peers.
Yes, somehow power will be produced, but with 70% of the world’s platinum coming from South Africa, and with looming wage negotiations with the unions facing the platinum producers, I would not want to be short the metal, especially at today’s historically cheap relative prices.