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BLACK ECONOMIC EMPOWERMENT |
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| EMPOWERING
OUR PARTNERS |
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Anglo Platinum is fully committed to the Mineral and
Petroleum Resources Development Act and the
mining charter, and to achieving the associated
sustainable economic transformation.
Anglo Platinum implemented an Employee
Share Participation Scheme (ESOP) on
31 March 2008.
As part of the landmark BEE
transactions announced on
4 September 2007, Anglo Platinum
concluded the sale of its
Northam shares to
Mvelaphanda Resources
on 20 August 2008. |
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| Phillimon Mukunbe is the Polokwane
Smelter manager. Phillimon and his
team at the smelter implemented the
smelter’s recovery plan effectively in
2008 following a run-out in November.
The smelter’s standing time was less
than originally anticipated. |
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The black economic empowerment process
started in 2000 with the sale of a 22.4%
interest in Northam Platinum Limited (Northam)
(shareholding at 31 December 2007) to
Mvelaphanda Resources Limited (Mvelaphanda
Resources), and continued in 2001 with the
establishment of a 50:50 joint venture with African
Rainbow Minerals at the Modikwa Mine.
Subsequent transactions included the 50:50 joint
venture with the Royal Bafokeng Nation at
Bafokeng-Rasimone Platinum Mine (BRPM) in
2002; the Booysendal 50:50 joint venture with
Khumama Platinum in 2003; the Pandora Joint
Venture with the Bapo-Ba-Mogale traditional
community and Mvelaphanda Resources each
holding a 7.5% interest, in 2004; the Ga-Phasha
50:50 joint venture with Anooraq Resources
Corporation (Anooraq) in 2004; and the sale of a
15% interest in Union Mine to the Bakgatla-Ba-
Kgafela (Bakgatla) traditional community in 2006.
Anglo Platinum further disposed in 2006 of a 55%
interest in its Rooderand mineral rights with the
Bakgatla and set up an exploration joint venture
on its Magazynskraal property.
In 2007, following a joint review process
conducted by Anglo Platinum and the
Department of Minerals (DME), Anglo Platinum
announced historic BEE transactions that
envisaged the creation of two major HDSA-managed
and -controlled PGM producers with
significant broad-based empowerment, which
included communities, women and employees,
and the implementation of an employee share
ownership plan to benefit some 50,000
employees. The details of the significant BEE
transactions are discussed herein. |
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MVELAPHANDA
RESOURCES AND ANOORAQ
TRANSACTIONS |
On 4 September 2007, Anglo Platinum, Anooraq
and Mvelaphanda Resources jointly announced
transactions that, when successfully concluded,
will result in the creation of two major historically
disadvantaged South African (HDSA) managed and controlled South African platinum group
metal producers, which will have critical mass
and significant growth potential.
In terms of the proposed transactions, the Anglo
Platinum Group would sell an effective 51% of
Lebowa and an additional 1% of the Ga-Phasha,
Boikgantsho and Kwanda Joint Venture (50:50).
Following this transaction, Anooraq, the current
owner of 50% of Ga-Phasha, Boikgantsho and
Kwanda, will own an effective 51% of Lebowa,
Ga-Phasha, Boikgantsho and Kwanda through a
newly created entity.
Mvelaphanda Resources purchased 50%
interest in the Booysendal project and a 22.4%
interest in Northam for a total consideration
of R4 billion. As part of the transaction
Mvelaphanda Resources sold a 100% interest in
the Booysendal project to Northam.
The suite of definitive legal agreements for both
transactions was entered into in March and April
2008. Several conditions precedent to the
conclusion of the transactions have since been
met. The sale of Anglo Platinum’s shares in
Northam was finalised on 20 August 2008. Only
one remaining condition needs to be met in
order to conclude the Booysendal sale, which is
likely to be concluded during the first quarter of
2009. It was envisaged that the Anooraq
transaction would be concluded on
30 November 2008, following approval of the
transaction by the Competition Commission
and the South African Reserve Bank in August
2008. However, the significant deterioration of
the global debt and equity markets during the
second half of 2008 has resulted in Anglo
Platinum and Anooraq reviewing the transaction
terms. Anglo Platinum and Anooraq remain
committed to concluding the transaction and
have extended the date for the fulfilment of
conditions precedent to 30 April 2009.
The sale by Anglo Platinum of equity holdings,
interests in operating mines, and interests in
development projects, inclusive of extensive mineral reserves and resources, will result in
Anooraq, through the newly created vehicle, and
Mvelaphanda Resources, through Northam,
controlling the third and fifth largest PGM
resource bases in South Africa respectively.
This signifies a meaningful and sustainable
transformation of the country’s platinum industry. |
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ANGLO PLATINUM KOTULA
EMPLOYEE SHARE
PARTICIPATION SCHEME
(ESOP) |
| Anglo Platinum, in consultation with its
recognised unions, designed an effective 1.5%
ESOP to benefit all permanent employees that
were not benefiting from any other company
share scheme. Shareholders voted on 31 March
2008 to implement the ESOP and an
independent trust, controlled by union
representatives, was set up to manage it. The
trust subscribed for 1,008,519 ordinary shares
and 1,512,780 A-ordinary shares (a special class
of shares that was created specifically for the
plan) on 16 May 2008, to the value of R1.95 billion.
The ESOP was officially launched on 11 June
2008. More than 90% of the scheme’s
beneficiaries are HDSAs. The ESOP is unitised and
the trust will allocate 10 million Kotula shares to
participants annually, based on each employee’s
employment status on 31 March every year. The
first allocation of Kotula shares was made to
some 51,000 employees. The ESOP will benefit
employees over seven years, by paying dividends
annually and capital in years 5, 6 and 7. All current
beneficiaries were paid their first dividend of
R1,441 in November 2008. |
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NORTHAM PLATINUM
LIMITED (NORTHAM) |
| In August 2000, Anglo Platinum sold a 17.5%
interest in Northam to Mvelaphanda Resources,
an HDSA company, and facilitated the sale of an
additional 5% interest from the Rembrandt
Group (Remgro) to Mvelaphanda Resources,
resulting in Mvelaphanda Resources holding a 22.5% interest in Northam and Anglo Platinum
holding the remaining 22.4% interest in
Northam. Anglo Platinum has, as part of the
transaction announced on 4 September 2007
with Mvelaphanda Resources, sold its remaining
22.4% in Northam on 20 August 2008. |
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MODIKWA PLATINUM MINE |
| In August 2001, RPM and the ARM Mining
Consortium Limited (ARM), a BEE company
comprising African Rainbow Minerals Platinum
and some 60,000 beneficiaries within the
local Mampudima and Matimatjati traditional
communities, concluded a joint venture,
known as the Modikwa Platinum Joint Venture,
to exploit the mineral resources of four
contiguous properties on the Eastern Limb of
the Bushveld Complex: Driekop, Maandagshoek,
Onverwacht, Winterveld and Hendriksplaats.
The mine was designed to produce 200,000
tonnes of UG2 ore per month, using two shafts
at an initial capital cost of some R1.35 billion.
The mine plans to build up to 240,000 tonnes
per month, with an annual production of
160,000 ounces of platinum. |
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PANDORA JOINT VENTURE |
The Pandora Joint Venture project, which
became unconditional in April 2004, is located
some 10 kilometres west of the town of Brits in
North West province. The joint venture comprises
both Merensky and UG2 reefs. The participants
to the joint venture are Rustenburg Platinum
Mines (42.5%), Eastern Platinum Limited, a
subsidiary of Lonmin PLC (42.5%), Bapo-Ba-
Mogale Tribe (7.5%) and Mvelaphanda Resources
Limited (7.5%) (on behalf of Northam).
The synergies of working together on the
project are expected to realise significant
capital cost savings, and have facilitated an
immediate tonnage build-up by using existing
Lonmin Mine access and infrastructure. Pandora
will mine the UG2 Reef, with a resource
estimated at 160 million tonnes. The mining operation will have an expected life of 30 years. |
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BAFOKENG-RASIMONE
PLATINUM MINE |
On 12 August 2002, RPM and the Royal Bafokeng
Nation (RBN), a local traditional community
comprising some 300,000 individuals,
announced that agreement had been reached
to form a 50:50 joint venture to mine the
Boschkoppie and Styldrift farms owned by Anglo
Platinum and RBN respectively, near Rustenburg
in the North West province. In terms of the joint
venture, which became unconditional in
February 2004, RPM and Royal Bafokeng
Resources (RBR), a wholly owned subsidiary of
the RBN, will cooperate as equal participants.
They intend to use the existing infrastructure at
BRPM to gain access to Styldrift. Additional
infrastructure, including a new vertical shaft and
a 230,000 tonnes per month concentrator, will
allow the joint venture to expand production by
2.76 million tonnes per annum.
The previously announced Styldrift expansion
project was approved in 2008. The full initial
project capital cost is estimated at R10.3 billion.
In October 2008, Anglo Platinum and Royal
Bafokeng Holdings (RBH), the investment arm of
the RBN, announced an agreement to restructure
the BRPM Joint Venture.
The restructuring will result in the creation of an
HDSA-controlled PGM producer, NewCo
Platinum (NewCo), a company that will hold a
67% interest in the BRPM Joint Venture. NewCo
will be controlled by RBH and independently
managed, and the parties have agreed to list
NewCo within the next three years. Prior to
listing, Anglo Platinum will retain an effective
50% interest in the BRPM Joint Venture. In order
to facilitate the listing, Anglo Platinum will sell
down its holding to an effective 43% interest in
the BRPM Joint Venture. |
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BOOYSENDAL JOINT
VENTURE |
| Anglo Platinum has, as part of the transaction
announced on 4 September 2007 with
Mvelaphanda Resources, sold its 50% interest in
Booysendal project to Mvelaphanda Resources,
barring one remaining condition which is
expected to be met during the first half of 2009.
Mvelaphanda Resources sold 100% of the
Booysendal project to Northam. |
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GA-PHASHA JOINT
VENTURE |
| In August 2004, Anglo Platinum signed a jointventure
agreement with Pelawan Investments
(Proprietary) Limited (Pelawan), to develop the
Ga-Phasha PGM project. Plateau Resources
(Proprietary) Limited (Plateau), a wholly owned
South African subsidiary of Anooraq, replaced
Pelawan as Anglo Platinum’s HDSA joint-venture
partner on the project as a result of a reverse
takeover of Anooraq by Pelawan. The joint
venture covers the farms Klipfontein 465KS and
Paschaskraal 466KS, contributed by Anglo
Platinum, and the farms Avoca 472KS and De
Kamp 507KS, contributed by the DME on behalf
of Pelawan. Anglo Platinum has lent R100 million
to Plateau to assist with funding towards the
bankable feasibility study. The successful
conclusion, envisaged to occur by April 2009, of
the BEE transactions announced in September
2007, would result in Anglo Platinum selling an
additional 1% interest in Ga-Phasha to Anooraq
to give Anooraq control of the asset. Anglo
Platinum will remain a 49% effective shareholder
in Ga-Phasha. |
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ELANDSFONTEIN |
| In October 2005, Anglo Platinum signed an
agreement with Eland Platinum Mines
(Proprietary) Limited for the disposal of its mineral
and surface rights on the property Elandsfontein
440JQ, for a cash consideration. The Ngazana Consortium, led by Dr Penuell Maduna, and
incorporating prominent businesswomen and
other historically disadvantaged persons, held an
unencumbered 26% interest in Eland Platinum
Mines (EPM). In addition to their unencumbered
beneficial interest, historically disadvantaged
persons controlled the board of EPM. Eland
Patinum Holdings Limited, which held a further
65% of EPM and was listed on the JSE Limited,
was acquired by Xstrata South Africa (Proprietary)
Limited in December 2007. In June 2007, Anglo
Platinum entered into an agreement with EPM
to purchase the concentrate produced from
the mine. |
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UNION SECTION,
ROODERAND AND
MAGAZYNSKRAAL |
Union Mine is an existing Anglo Platinum
operation on the Western Limb of the Bushveld
Complex, located to the north of the
Pilanesberg. Portion 2 of Rooderand 46JQ and
Magazynskraal 3JQ are early-stage assets to the
south-west of Union Mine.
Anglo Platinum concluded an agreement with
the Bakgatla, which is the local community in
the region and which provides approximately
47% of Union Mine’s workforce.
The transaction, concluded in November 2006,
saw Anglo Platinum effectively exchanging the
royalty agreement it had with the Bakgatla on
portion 2 of Spitskop 410JQ for a participation
interest in Union Mine. The Bakgatla then
purchased a further participation interest in
Union Mine for R420 million in cash as well as
an undertaking to procure the use of various
surface rights required by the mine. The total
stake acquired is 15% of Union Mine’s mining
and concentrating business.
Anglo Platinum further disposed of a 55%
interest in the mineral rights in respect of
Rooderand to the Bakgatla, and advanced a loan
to the Bakgatla, secured by an interest in
Rooderand. On Magazynskraal, an exploration
joint venture has been established, in terms of
which the Bakgatla (potentially with a suitably
qualified partner) will procure the funding for,
and completion of, the exploration and
feasibility work required to compile a bankable
feasibility study in return for a majority stake in
the asset. Should a mine be developed, Anglo
Platinum will retain the right to increase its stake
in the asset, contributing a disproportionate
share of the development capital expenditure
required.
In respect of the Union Mine transaction, Anglo
Platinum will purchase the Bakgatla’s 15% share
of the concentrate produced by Union Mine. In
respect of the Rooderand and Magazynskraal
transactions, Anglo Platinum retains the right to
purchase the concentrate arising from these
projects at market-related terms. |
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CHROME AND TAILINGS
PROJECTS |
| Siyanda Chrome Investments (Proprietary)
Limited, an HDSA-controlled company, owns
26% of the chromite recovery business at
Union Mine. Platinum Mile Resources
(Proprietary) Limited, which is jointly controlled
by Mvelaphanda Holdings (Proprietary) Limited
and Aquarius Platinum (South Africa), owns the
platinum tailings retreatment business at
Rustenburg. Kilken Platinum (Proprietary)
Limited and Imbani Minerals, an HDSAcontrolled
company, are in a 70:30 joint venture
and own the platinum tailings retreatment
business at Amandelbult. |
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WESTERN BUSHVELD JOINT
VENTURE |
| During 2008, Rustenburg Platinum Mines
Limited (RPM) elected to dispose of its interest
in the Western Bushveld Joint Venture (WBJV)
to Wesizwe Platinum Limited (Wesizwe), an
HDSA-owned company and the sole
shareholder of Africa Wide Mineral Prospecting
and Exploration (Proprietary) Limited, the
current 26% HDSA partner in the WBJV. The
salient terms of the transaction are that RPM
will sell its interest in the WBJV to Wesizwe in
exchange for 211.9 million shares in Wesizwe.
The sale by RPM enables a reorganisation of the
assets held by both Platinum Group Metal RSA
(Proprietary) Limited and Wesizwe, which will
result in Wesizwe having a 100% interest in its
core project while retaining a 26% interest in
the remaining WBJV projects. The sale of RPM’s
interest in the WBJV has therefore further
enhanced the ownership of mining assets by
HDSA companies. The agreements were signed
on 8 December 2008 and the parties are busy
fulfilling various suspensive conditions. |
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PROSPECTING JOINT
VENTURES |
Anglo Platinum has a number of South African
prospecting projects, either on its own or with
joint-venture partners, in respect of which it
is applying for conversion of its existing
prospecting permits or has applied for new
prospecting rights.
The prospecting projects that have already been
concluded, which incorporate HDSA partners,
include the Boikgantsho and Kwanda joint
ventures with Anooraq in the Mokopane area. |
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