Amplats in R3.5bn BEE deal

2011-11-07 11:30

Johannesburg - Anglo Platinum [JSE:AMS] the world’s largest platinum producer, said on Monday it would implement a R3.5bn deal that will give 2.33% of the group to communities where it operates.

South African mining houses have to meet government requirements to ensure they are at least 26% black-owned by 2014.
They are also under political pressure to do more for communities where they mine against the backdrop of glaring income disparities and calls by radical elements in the ANC to nationalise the industry.

“The transaction underscores Amplats’ commitment to empowerment and community development,” the company said.

Amplats said its estimated costs in carrying out the transaction would be R1.161bn, or 0.77% of its market capitalisation in the two trading days that preceded the announcement.

Empowerment deals often involve companies effectively giving away shares so there are costs.

Amplats said if the deal had taken place in January, the financial impact on its headline earnings per share for the six months to the end of June 2011 would have been a negative 36% and would have brought it to 792 cents from 1 236c.

The deal is structured to bring cash flow benefits from the outset with potential equity ownership in 10 years’ time. Benefits from the 6.3 million Amplats shares will be utilised at the community level on sustainable projects. The shares will be issued to a trust, the platinum producer said in a statement.

  • - 2011-11-07 11:48

    Let us please not have another Kumba scenario where the loan sharks and car salesman start circling the potential beneficiaries. Build the financial awareness and capability to ensure this opportunity goes toward building wealth to uplift those out of poverty. The less "have nots" in SA the less the risk of rising nationalisation pressure or delivery riots.

  • Santie - 2011-11-07 12:06

    Too little too late!

  • Nwalimuhulu - 2011-11-07 12:33

    You are starting to move to the right direction whereby the communities must enjoy the benefit of their soil. - 2011-11-07 12:52

      Nwalimuhulu, I believe you are touching on a difficult topic - every community in South Africa should not feel entitled to benefit from their soil. Instead they should rather focus on enjoying the benefits of their hard work, which maybe focused on the soil they live on or perhaps at employing another stakeholders capital. This is a far more sustainable and controllable mind set which we need create. Relying on luck, hand outs or the resources that may be in the soil we live on, may result in communities not actively seeking to control their own destiny which is usually directly proportional to our efforts, skills and attitude.

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