Nine top executives at coal miner Exxaro have either quit in frustration, been fired or placed on suspension in a leadership storm that has raged since CEO Nombasa Tsengwa took over in August 2022.
Head of coal operations Kgabi Masia became the latest casualty of the purge when he was dramatically served with a suspension letter while on a work trip to Switzerland last week.
The company confirmed Masia’s suspension whilst on a working trip abroad, but refused to comment further.
Several former Exxaro employees who spoke to Business Times accused Tsengwa, the president of the Minerals Council South Africa and deputy chair of the Energy Council, of having instilled a culture of fear at the coal miner through bullying. One of those who have resigned described it as “the most horrifying time of my career at Exxaro”.
Tsengwa referred questions about the allegations to Exxaro chair Geoffrey Qhena, who defended her and said the board was happy with the direction of the company under her leadership.
Her critics accuse her of failing to implement a diversification strategy to reduce the miner’s heavy reliance on coal for revenue and profits, and of having bloated the headcount at head office in Centurion, staffing it with middle and senior managers, boosting payroll and head office costs.
The way she was leading and managing was against my value system. She was disempowering and controlling
— Executive who resigned
Executives who have jumped ship include Roland Tatnall, who was the MD of Cennergi, the group’s renewable energy business; Vanisha Balgobind, former executive head of human resources; and the person who replaced her in an acting capacity, Hemuna Bhola.
Others who resigned are Alex de Angelis, executive head of strategy; Bathabile Ponu, the chief internal auditor; and Louis Retief, executive head of information management.
Andiswa Ndoni, the company secretary, is on suspension. Ling-Ling Mothapo, chief investor relations officer, has been placed on gardening leave and it is not clear if she will return to work.
One of the executives who quit said there was a big change in leadership style when Tsengwa took over, saying she shut down the culture of openness cultivated under former CEOs Mxolisi Mgojo and Sipho Nkosi.
“The way she was leading and managing was against my value system. She was disempowering and controlling. She did not want to stand by governance practices, and we continued butting heads about what is right. Every day was a different story. I took the decision to resign, I just could not work with her. It was the most horrifying time of my career at Exxaro.”
An executive placed on suspension before resigning said: “If you disagree with her it is seen as a personal attack on her.”
Another senior manager who left said those around the CEO were too scared to speak out in meetings for fear of being targeted.
“You have seen a number of people exiting or being suspended ... Even if you see what she is proposing is not correct, it is hard to raise your voice against Nombasa because you are afraid you might be next.”
Business Times understands one of the former senior executives complained to the board about Tsengwa’s leadership style before being placed on suspension. It is understood the board did not act.
An Exxaro insider accused the board of not wanting to act against its first black female CEO. “I think the board has a dilemma. They have the first black woman CEO, they don’t want to be seen as not supporting [her]. I am sure they are aware of the issues.”
Exxaro Resources has a market capitalisation of R71bn with a production capacity of more than 40 megatonnes of coal.
Some of those who spoke to Business Times said the company was overreliant on the Grootgeluk mine in Lephalale for revenue and was battling to diversify into other minerals, as per its sustainable growth and impact strategy adopted under Mgojo.
“I have not seen any major changes in what the growth strategy was because part of it was to diversify and go into other commodities. There has not been any acquisition ... The financial performance, barring that the commodity price has been down, has not been amazing, it has not shot out the lights. She has been there for two years in the role, but she has been in the executive committee for pretty long,” said a former employee.
Exxaro’s integrated annual report for the year ended December 2023 says the inability to achieve growth objectives is a risk for the group and there is more pressure to diversify.
“The board approved additional minerals to be explored. We continue to explore further opportunities to add to the pipeline for consideration. The primary growth lever for the organisation is in organic growth through acquisition,” the report said.
Asked about the criticism of Tsengwa, Qhena said people left jobs for various reasons, such as moving to greener pastures or pressing family responsibilities.
He said the board was confident the CEO was on top of things and that when Exxaro lost people, it was able to replace them with others equally competent. “If there is a mix of reasons, it is difficult to say ‘Oh, there is a trend that must be addressed’. No employer will be happy when people leave, especially when these people develop a lot of experience. When people leave for their own reasons, I don’t think we can say no.”
In fact, [diversification] is not a luxury, it is something that the CEO has embraced. Sooner rather than later, if everything goes according to plan, we might announce something
— Geoffrey Qhena, board chair
“If there is a mix of reasons, it is difficult to say, ‘Oh, there is a trend that must be addressed.’ No employer will be happy when people leave, especially when these people develop a lot of experience. When people leave for their own reasons, I don’t think we can say no.”
He said no-one had complained of “a culture of fear” under Tsengwa. “To my understanding, no executives raised an issue to say there is a culture of fear or intimidation. No executive has come to me at least, or the board, to say there is a culture of fear. It is tricky to opine on that.”
Qhena said the strategic decision to diversify, taken before he was appointed, was on track. The miner has two wind farms in the Eastern Cape and wants to be carbon neutral by 2050. “We have said we are looking at other minerals, we have narrowed it to avoid minerals that will increase our carbon footprint ... As a board, we are confident that the strategy is intact and there is a lot of work that is being done.
“In fact, [diversification] is not a luxury, it is something the CEO has embraced. Sooner rather than later, if everything goes according to plan, we might announce something.”
In May, Tsengwa told Mining Weekly Exxaro could develop more of its coal resources if it failed to find assets for diversification. She said the miner, which has set aside between R12bn and R15bn for acquisitions, could return to some of its coal resources, especially in the Waterberg region. “We still have reserves, such as Thabametsi; there’s a lot of power station coal there.
“[Shareholders] will say I’ve failed to diversify, so stay in coal. They will say: ‘Give us that R12bn-R15bn you’re stashing away as a special divvy and get on with your life’. I’m expecting that. But we will continue to convince them. We will look for assets.”
RMB Morgan Stanley analysts Brian Morgan and Christopher Nicholson told Mining Weekly while Exxaro’s coal business was cash-generative, they could not ignore the execution risk for mergers & acquisitions.
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