Fin24

Num accuses Rio, Anglo of ducking BEE

2011-09-19 09:20

Johannesburg - The National Union of Mineworkers (Num) on Sunday accused resources giants Rio Tinto and Anglo American [JSE:AGL] of bowing out of Palabora Mining Company [JSE:PAM], without having "concluded any meaningful black economic empowerment (BEE) transaction".

Condemning the companies' plans to sell their combined 74.5% stake in the South African copper miner, the trade union said it was concerned that the decision to sell was "a pure reaction to its demand for a proper employee share ownership programme at Palabora."

Rio Tinto has an effective interest of 57.7% in Palabora while Anglo American holds 16.8% of the company, whose market capitalisation was R6.6bn at the JSE close on Friday.

"We are disappointed that we still have companies such as Rio and Anglo that refuse to transform to reflect the diverse demographics of our beautiful country," said Num national secretary for education Zwelitsha Tantsi.

"We therefore would prefer that preference on the sale of the shareholding be given to South Africans particularly those from previously disadvantaged communities with interests of workers at heart," said Tantsi.

Announcing their plans to sell their holdings in Palabora two weeks ago, Rio Tinto and Anglo American indicated that the mine was no longer big enough to sit in their portfolios.

Palabora's principal asset is a copper mine in SA, which has a current mine life until early 2016 and studies are underway for a potential extension of the mine's life to 2030.

Rio Tinto has assured black economic empowerment investors that its plans to sell its stake would not affect its BEE transaction, which it began in June last year.

The empowerment transaction would see the company dispose of the bulk of its business operations and assets to subsidiary Palabora Copper, in which the BEE partners - comprising of the Palabora Employee Trust, the Leolo Community Trust, and a consortium led by the company's former chairperson George Negota - would hold 26% and Palabora Mining 74% of the issued share capital of Palabora Copper.