15 December 2008
South African miner Richards Bay Minerals has unveiled a black economic empowerment plan that will see 24% of the company being transferred to a group comprising local communities and investors, and a further two percent being transferred to an employees’ trust.
The deal means that the company, which is equally owned by global mining giants Rio Tinto and BHP Billiton, will be fully empowered in accordance with South Africa’s Mining Industry Charter.
According to a Business Report article last week, the deal is valued at about R4.5-billion.
“We are delighted that this long process is closer to completion, and that further benefits from the equity deal will soon flow to the communities and employees of RBM,” Richards Bay Minerals MD Cameron McRae said in a statement issued by Rio Tinto last week.
“We are also pleased to be able to fully empower RBM five years earlier than legislation requires.”
RBM, which is based in Richards Bay in KwaZulu-Natal, operates in the mining and processing of titanium-bearing ores to produce titanium dioxide feed stocks, associated materials and various co-products and by-products. In September this year, Rand Merchant Bank valued the joint venture at around R19-billion.
Generator of employment
It operates through two companies: Tisand, which is responsible for dune mining and mineral separation operations, and Richards Bay Iron and Titanium, which is responsible for the smelting and beneficiation of the mined minerals.
“RMB will continue to support the community development programmes running in the host communities,” added McRae. “RBM has been a key generator of employment in KwaZulu-Natal, and will continue to be so over coming decades.
RBM’s parent companies, Rio Tinto and BHP Billiton, will facilitate funding of the equity acquisitions by the incoming empowerment shareholders, meaning that the host communities and employees will not need to raise funds for their stake in the company.
The transaction is expected to take place by April 2009, subject to various approvals and funding agreements, following which RBM will submit its mining rights conversion application to the Department of Minerals and Energy.
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