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February 26, 2024
PI Global Investments
Gold

Former Gold Fields CEO says firm enjoying benefits of his work


Chris Griffith, CEO, Vedanta Base Metals

IT’S been a year since Chris Griffith blazed out of Gold Fields, the 2.5-million ounce a year miner he led for two years prior to its failed takeover attempt of Yamana Gold. Now he’s back in the saddle as CEO of Vedanta Zinc International (VZI), a base metals subsidiary of Indian conglomerate Vedanta.

Griffith reckons he’s worth one more turn at the wheel, especially since VZI is to be separately listed in Mumbai as part of a broad expansion-driven strategy. It’s one reason Griffith says he ignored his wife’s protestations to take life a bit easier. “I’ve still got a huge amount of energy,” he says.

While at Gold Fields, between April 2021 and December 2022, Griffith aggressively drove growth the likes of which the firm hadn’t seen. Some of it was a success, he’s keen to say. In addition to the all-share tilt at Yamana, Gold Fields announced joint ventures — one with AngloGold Ashanti in Ghana and another with Osisko Metals in Canada. “All those things didn’t happen one or two months after I left. They were started well into my time,” he says.

But by the time he left there had been significant turnover in the executive committee and shareholders were left shaken by the Yamana offer. Officially, Gold Fields said Griffith had recognised that the firm needed a change in executive style. Unofficially, there was speculation of a bust-up.

Griffith is not the quitting type but in an interview he claims to be at peace with whatever went on. While acknowledging that shareholders didn’t fancy paying up for Yamana, the ultimate demonstration of the value of the deal was that “the other folk” (Yamana’s buyers Agnico Eagle and Pan American Silver) paid more, he says.

“Ultimately, I’m not Gold Fields; I wasn’t ever for Gold Fields,” he says. In newly appointed CEO Mike Fraser, a former South32 executive, Gold Fields has “a good choice”. Griffith remains a Gold Fields shareholder.

In Vedanta, Griffith has shareholder pressure of a quite different order. Anil Agarwal, Vedanta’s founder, largest shareholder and executive chair, is a formidable businessperson with sweeping plans. He is also demanding. Former VZI CEOs such as Vale’s Deshnee Naidoo and Srinivasan Venkatakrishnan (a former AngloGold Ashanti CEO) know what it takes to work with Agarwal.

It was Agarwal, for instance, who famously bought a 20% option in Anglo American amid (his) talk it should establish a joint venture with Vedanta in African base metals. Agarwal, who bought the option in 2017, sold it in 2019. It was Anglo, in fact, that sold Vedanta its zinc assets back in 2010.

The aim in splitting out VZI — as well as Vedanta’s other businesses — is to grow, which Griffith thinks could result in greater internationalisation, especially as VZI has a significant African footprint. Griffith has recently returned from Namibia, where there are options. There’s also the much-vaunted zinc smelter project at Gamsberg in the Northern Cape.

Vedanta pledged to invest R20bn in South Africa in 2018 when confidence in the new presidency of Cyril Ramaphosa was high. Of this pledge, R12bn has been committed — the latest the doubling of zinc concentrate from Gamsberg. Right now, however, there’s no zinc smelter, which, if approved, would see another R12bn in spend.

Asked if he wants to make this a flagship of his leadership, Griffith says: “For us to put the next big smelter in the Northern Cape we would need assurance we’ve got power solutions.” The plant would consume 150MW, which is “not something that’s going to happen overnight”. That’s drearily familiar to South Africans. While Griffith is encouraged by the government (it recently formed a special export zone in the region), there also has to be “a dose of reality”.

In any event, the separately listed firm will have its own board and while Agarwal’s private trust company will dominate the share register it could dilute over time. There’s also the possibility of new listings.

Prior to running Gold Fields, Griffith was CEO of Anglo American Platinum, a dominant company in platinum group metals (PGM) production and one of a clutch of companies said to be considering retrenchments. Griffith acknowledges pain in the sector. While he thinks it’s critical that PGM producers respond with production cuts, he doesn’t see it as an existential crisis.

“In the past, I think PGM companies have been slow to react, so I think there’s a job to be done and where there’s loss-making production the companies need to react. But overall the industry is still in good shape. I am still a shareholder in all of the PGM companies and it’s a fantastic buying opportunity in my view.”

This article was previously published in the Financial Mail.



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