Anglo Platinum, Anooraq Resources and Mvela Resources BEE transactions
04 September, 2007
Anglo Platinum, Anooraq Resources and Mvela Resources today announced that they had reached agreement on transactions that will result in the creation of two substantial, Historically Disadvantaged South African managed and controlled South African platinum group metal producers.
Anglo Platinum, Anooraq Resources and Mvela Resources today announced that they had reached agreement on transactions that will result in the creation of two substantial, Historically Disadvantaged South African (HDSA) managed and controlled South African platinum group metal (PGM) producers, with critical mass and significant growth potential.
In terms of the transactions, Anglo Platinum will sell an effective 51% of Lebowa Platinum and an effective 1% of the Ga-Phasha Project for a total consideration of R3.6 billion to Anooraq. Following this transaction Anooraq, being the current owner of 50% of Ga-Phasha, will own an effective 51% of Lebowa and Ga-Phasha through a newly created vehicle, Lebowa Holdco. Mvela Resources will purchase Anglo Platinum's 50% interest in the Booysendal Project and 22.4% direct interest in Northam for a total consideration of R4 billion.
Anglo Platinum and Anooraq have also agreed in principle to transfer, in due course, their respective 50% interests in the Boikgantsho and Kwanda JV Projects into Lebowa Holdco such that Lebowa Holdco will own 100% of these assets.
As a result of these transactions Anooraq and Mvela Resources will respectively control the 3rd and 5th largest PGM resource bases in South Africa, resulting in fundamental and sustainable transformation of the country's platinum industry.
Anglo Platinum also announced an employee share ownership plan (ESOP) that will benefit more than 43,000 employees. The new scheme covers all employees who do not participate in any Anglo Platinum share scheme and will comprise up to 1.5% of Anglo Platinum's issued share capital (current market value of approximately R3.3 billion).
These transactions reflect Anglo Platinum's commitment to transformation and broad-based BEE and, together with Anglo Platinum's ESOP will result in approximately R35 billion of assets under HDSA control.
Anglo American CEO, Cynthia Carroll commented: “This is a truly historic BEE transaction which will fundamentally transform the South African platinum mining industry through the creation of two major independent HDSA managed and controlled PGM producers. The sale by Anglo Platinum of mining assets will achieve meaningful, sustainable and broad-based empowerment through the participation of communities, employees and women. Anglo American is strongly committed to the equitable and sustainable development of the countries and communities in which we operate and I believe this transaction represents another significant step forward in the empowerment of our South African operations.”
Anglo Platinum acting joint CEO, Norman Mbazima said of the transaction: “These transactions illustrate Anglo Platinum and Anglo American's commitment to broad-based BEE as a strategic transformation initiative. We believe that the creation of two major HDSA managed and controlled participants within the global platinum industry fundamentally enhances BEE and the equitable transformation of the mining industry.”
He continued: “We have sold a portfolio of quality, long life assets and created two global PGM participants with critical mass and significant growth potential. We are also pleased with the breadth of the broad-based component of our empowerment efforts. The staff employee scheme and the participation of women's groups and community groupings will add to the investment in Anglo Platinum's social and labour plans as part of its broad-based transformation strategy.”
Tumelo Motsisi, Deputy CEO and Managing Director of Anooraq Resources, said: “This transaction accomplishes two of our original objectives. It immediately transforms Anooraq into a significant PGM producer and fulfils Anooraq's and Pelawan's stated objective of creating an HDSA controlled, independent and significant PGM producer. Anooraq's reserves and resources will increase significantly such that we will now control the third largest PGM resource base in South Africa.”
“Lebowa is an excellent asset to add to our stable. It has attractive grades, established water, power and road infrastructure and an approved expansion in place to double existing production by 2012 as well as a number of other exciting growth opportunities.”
“Upon implementation of the transaction control of the operations at our platinum projects and Lebowa will pass to Anooraq. This will allow us to evaluate our project pipeline and develop the assets in accordance with Anooraq's timetable. We will also be in a position to strengthen our technical capacity through our enhanced relationship with Anglo Platinum.”
Lazarus Zim, Executive Chairman of Mvela Resources and Afripalm Resources, said: “Today is a great day for South Africa. When we announced our investment in Mvela Resources we made it clear that our ultimate strategy was about building an operating diversified mining company. This transaction has enabled us to realise an important step in the delivery of that strategy. We fully believe that this is a sustainable, meaningful and substantial transaction and a great deal for independent empowerment mining.”
“These transactions have considerable social impact and achieve significant empowerment of local communities by introducing them as shareholders. Afripalm has already set aside 10% of its shares for women and has committed to transfer 51% of its subsidiary, Afripalm 2, to broad-based groups representing at least 5,000 women.”
The implementation of these transactions will be subject to a number of conditions precedent including completion of confirmatory due diligence, raising of relevant financing, conclusion of the requisite agreements, approval by the relevant regulatory authorities and other third parties, and approval by shareholders, where required, in general meetings.
Anglo Platinum, Anooraq Resources and Mvela Resources believe that the meaningful participation by beneficiaries in the transactions recognises the importance of local communities and employees and promotes gender equality and broad-based ownership. The inclusion of women as shareholders is in line with Anglo Platinum's transformation objectives for the mining sector and the participation of community groupings associated with the operating mines, and from labour sending areas, will benefit in excess of 55,000 HDSAs.
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Further details on the media and analyst presentation to be held on 4 September 2007 (including Summit TV and webcast information) are available on the respective company websites
Notes to Editors:
Mvela Resources
Mvela Resources is an HDSA company, its major shareholders being
Afripalm Resources Limited which has an economic interest of 19.2%
and a voting interest of 30.8% and Mvelaphanda Holdings Limited,
which has an economic interest of 22.7% and a voting interest of
19.5%. Afripalm Resources has broad-based participation through
Unipalm Investment Holdings Limited, which is a 15% shareholder in
Afripalm Resources, and trusts, representing broad-based women,
employees and communities, which own a further 30% in Afripalm
Resources. Unipalm is a national broad-based empowerment group
representing more than 30, 000 broad-based HDSAs.
Since its inception in 2001, Mvela Resources has acquired significant investments in the South African gold, platinum and diamond sectors, as well as exploration and development joint ventures in sub-Saharan Africa, with a focus on South Africa. Listed investments include a 21.8% interest in Northam and a fully diluted 20.7% interest in Trans Hex Group Limited (“Trans Hex”). Mvela Resources, through its wholly-owned subsidiary Mvela Gold, holds a 15% interest in Gold Fields Mining South Africa (Proprietary) Limited, an unlisted subsidiary of Gold Fields Limited which houses Gold Fields' South African operations including the Driefontein, Kloof, Beatrix and South Deep mines. Exploration and development joint ventures have been established with global mining groups such as De Beers Consolidated Mines Limited, Trans Hex and Lonmin plc.
Anooraq Resources
Anooraq is engaged in the exploration and development of PGM
properties in the Bushveld Complex and has a long-term objective of
becoming a significant PGM producer in South Africa through organic
and acquisitive growth. Its assets include 50% interests in the
Ga-Phasha, Boikgantsho and Kwanda JV Projects.
Anooraq is incorporated in the Province of British Columbia, Canada and is 64.6% owned and controlled by Pelawan, which also holds 167 million Anooraq warrants. Anooraq has a primary listing on the Toronto Venture Exchange with secondary listings on the American Stock Exchange and the JSE Limited.
Pelawan's shareholder base comprises 15 broad-based BEE entities, including women investment groups, which account for approximately 42% of Pelawan, cultural trusts and Limpopo-based rural groups within the proximity of Anooraq's operations. Anooraq is one of the leading mining companies committed to women ownership in the mining sector. Women's interests include Mookodi Trading, Africa Without Boundaries Mining and Leswika Women's Investments. Each of these women's groups is committed to the advancement of women's interests and provide a meaningful contribution to Pelawan at board level.