Ciaran Ryan, Moneyweb
4 minute read
18 Jul 2019
8:00 am

Mantashe faces uphill battle in dealing with chaos at SA’s nuclear corporation

Ciaran Ryan, Moneyweb

The company has burned through six CEOs and two chairmen in seven months, with one CEO lasting a day and another a week.

Gwede Mantashe, 27 November 2018. Picture: Refilwe Modise

Mines minister Gwede Mantashe has had energy added to his portfolio as part of President Cyril Ramaphosa’s cabinet downsizing.

He’s got his work cut out for him, having been handed a hospital pass by his predecessor as energy minister, Jeff Radebe, the president’s brother-in-law.

One of Mantashe’s first jobs, no doubt, will be to steady the chaotic South African Nuclear Energy Corporation (Necsa), which has burned through six CEOs and two chairmen in seven months. The company is wracked by governance lapses and no less than three shutdowns of the Safari-1 nuclear reactor in less than two years – all over safety forms incorrectly completed.

This week, speaking at a Nuclear Science and Technology gathering in Sandton, Mantashe berated the National Nuclear Regulator for shutting down the reactor under “suspicious” circumstances. The company was losing customers and competitive advantage built up over 20 years because of the shutdown.

Moneyweb understands that Necsa’s chief legal advisor Vusi Malebana is under threat of disciplinary proceedings for a letter he wrote to the board highlighting several crucial and potentially costly governance and legal lapses that ended up being leaked to the press.

According to trade union Nehawu (National Education, Health and Allied Workers’ Union), the trouble started when Radebe last year suspended three members of the board on the grounds of “defiance and ineptitude”. They were chairman Kelvin Kemm, CEO Phumzile Tshelane and finance director Pamela Bosman. The three are challenging their suspensions in the Pretoria High Court.

In apparent breach of the Necsa Act, Radebe immediately appointed Rob Adam as the replacement chairman, and Don Robertson as acting CEO. That was seven months ago. Both men have now left.

The once-profitable state-owned enterprise under the previous board is now a financial wreck, asking parliament for a R500 million bailout.

Nehawu is calling for the removal of the entire Necsa board, as well as Necsa subsidiary NTP Radioisotopes MD Tina Eboka. The union says plans have been hatched to retrench 400 workers without proper consultation. Last week it was granted the right to launch a protected strike.

Robertson had been brought out of retirement to replace Tshelane at the helm of the highly sensitive nuclear company in December last year.

The following appointments as acting CEO have been variously announced and/or retracted since Robertson left:

  • Alan Carolissen (whose appointment was aborted before it began and which, according to the company’s legal advisor, now exposes it to a potential financial claim);
  • Monde Mondi (head of human resources, who lasted seven days as acting CEO);
  • Gavin Ball, who barely warmed the seat before making way for:
  • Ayanda Myoli, who assumed the acting CEO post on July 8 and will likely remain there until further notice.

Both Robertson and Adam managed to antagonise labour when rumours of staff retrenchments started swirling. There was also talk of selling off some of the subsidiary companies as part of a turnaround plan.

Mantashe appears to have spiked at least some of these plans. In his budget speech last week he referenced NTP Radioisotopes, the Necsa subsidiary that leads the world in the production of medical isotopes for the treatment of cancer. The shutdown of the plant by the nuclear regulator that produces this medicine “resulted in the loss in market share, which will take a long time to regain”.

‘Leaders have a duty’

“This led to erratic production until July 2018, a problem that is now resolved, since the NTP developed a Plant Reconstitution Plan which was submitted to the NNR [National Nuclear Regulator],” said Mantashe. “Where you are a leader you have duty to protect market share and competitive advantage.”

Another subsidiary that was also rumoured to be up for sale as part of the turnaround programme is Pelchem, a world leader in producing fluorochemicals that are used in making a variety of consumer products such as high octane fuel, anaesthetics and mobile phones. Any talk of selling this company appears to have ended with the departure of Robertson and Adam.

Mantashe sees a bright future for Pelchem, working together with state-owned mining company Mintek. “We must ensure a sustainable and self-sufficient Pelchem,” he said last week.

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