‘The approach is to make hay now'

Royal Bafokeng Platinum’s chief financial officer explains that the miner’s minimum-dividend policy, among other things, aims for sustainability in an uncertain environment.

- David McKay

Hanré Rossouw, chief financial officer of Royal Bafokeng Platinum (RBPlat), knows a thing or two about dividend disappointment. As a former portfolio manager for Investec Asset Management, he recalls the train smash that was the mining sector in 2015/2016. One by one, the world’s mining majors dropped the notion of ‘the progressive dividend’, a belief that payouts could be sustained on the evergreen, double-digit growth of China.

“That kind of thing breaks so much trust,” says Rossouw of how investors responded to that mining industry crisis. It could be argued that investor trust was only truly won back last year, and only after mining firms bore down on billions of dollars in debt, a painful process of restructuring.

And then came Covid-19.

In the current environment, where uncertainty is the watchword, it doesn’t make sense to invest in long-lead projects or incur heavy capital costs.