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Johannesburg - JSE-listed Highveld Steel & Vanadium has announced a $60m black economic empowerment (BEE) deal with Umnotho WeSizwe at its Mapochs Mine, which is part of the Bushveld Complex.
The company is selling a 23% stake in the mine - which is in Roossekenal, 95km north-east of Middelburg in Mpumalanga province - to Umnotho weSizwe subsidiary Lashka 81.
Umnotho weSizwe was founded in 1996 by its CEO, Vusi Nkosi, and has interests in diamond, platinum and coal assets. It is also the BEE partner to Chromex, the AIM-traded chrome miner with operations in SA, and has a stake in the empowerment consortium involved with Petra in former De Beers mine Cullinan.
A further 3% is being sold to the Mapochs Mine Community Trust, which will include people from the community surrounding the Mapochs Mine, Roossenekal and other major labour-sending areas to Mapochs Mine.
The trustees will initially comprise one trustee appointed by Highveld and two independent trustees, with at least two more to be appointed by no later than February 11 2010.
The Mapochs Mine produces lumpy magnetite and fines ore exclusively for Highveld's steelworks and vanadium product operations. Magnetite ore is used in some of Highveld's niched steel products.
Umnotho is making a R15m upfront cash payment; the balance owed to Highveld will be paid through dividends it receives from Highveld shares owned by Umnotho.
In April 2008 Highveld said it planned to transfer the Mapochs Mine into a new company, Mapochs Newco, as it restructured after selling off some of its vertically integrated vanadium assets.
The transfer will go through subject to the conversion of Mapoch's old-order mining rights and the consent of the minister of minerals and energy for the transfer of the converted new-order mining right to Mapochs Newco.
After the transfer, 23% of the equity in Mapochs Newco will be sold to Umnotho SPV. The Community Trust will buy 3% of the equity interest in Mapochs Newco, using a donation from Highveld.
Highveld has a market capitalisation of R6.9bn. The share is illiquid and its share price went unchanged on Thursday afternoon at 7 000c/share.
- Fin24.com