Hi DavidA:
And, here's the same story from the South African "Business Day"
01 February 1999
Empowerment deal
gets mixed reception
Reneé Grawitzky
DE BEERS' first black economic empowerment deal -
involving the sale of a portion of its 60% stake in the
Marsfontein mine in the Northern Province - has been
welcomed by some analysts, claiming "this was not
tokenism", while others say it was politically motivated.
The long-awaited deal, unveiled by De Beers on Friday,
will ensure that its 60% stake in the mine - which was a
joint venture with Canadian-listed SouthernEra - will be
transferred to a new company, Newco, with effect from
January 1.
De Beers has agreed to sell off up to 49% of this
company to a consortium of black economic
empowerment partners for R200m.
The new partners in this venture include New Diamond
Corporation, Domba Investments and Vuwani Projects.
New Diamond Corporation, which comprises Kwezi
Mining, Letlotlo Investment Holdings and African
Renaissance Holdings, also form part of a consortium
with De Beers in a bid for the two-year management
contract of Alexkor, the Northern Cape state-owned
diamond mine.
The deal was announced by De Beers only days before
government makes a decision about the successful
bidder for the Alexkor contract. The De Beers
consortium is one of three short-listed companies being
considered.
De Beers said it had priced the transaction to "create
value in Newco for reinvestment by Newco in future
diamond mining projects". De Beers has agreed to
finance the deal at competitive interest rates.
Barnard Jacobs Mellet analyst James Allan said the deal
was not a surprise as De Beers indicated last year when
it bought the mineral rights that it would seek a black
empowerment deal. He said: "This is no tokenism deal
and real empowerment is taking place here."
The mineral rights to the Marsfontein farm was the
subject of a major battle. SouthernEra was about to start
mining at the site when a number of heirs emerged
unexpectedly. They registered their rights to the land and
optioned them to De Beers for R75m. An agreement
was later struck between the parties.
Some analysts said during the height of this dispute there
appeared to be an understanding with government that if
De Beers bought the mineral rights it would have to bring
in an empowerment group .
_______________
The timing of this announcement by de Beers is interesting -- only days before Alexkor contract decision is to be made and De Beers being on the short list! I guess grabbing Alexkor is a bigger "fish" than 29% of M1! Makes you wonder, eh? I guess the so-called non-political move ("its not a token" says De Beers)also raised questions by SA analysts... not just us Canucks, eh...
Regards. Goalie. |
