The scramble to meet the Mining Charter BBBEE targets and in particular ownership seems to have begun.
The third largest platinum miner in the world, Lonmin, suggested yesterday that it was looking at ways to meet the 26% black ownership target due in December 2014.
Announcing its financial results for the year ended September, Lonmin said “Our BEE and Mining Charter commitments require Lonmin to increase HDSA ownership in its prospecting and mining ventures by 31 December 2014 to at least 26%.”
The group noted that “By 30 September 2013, HDSA investors directly and indirectly owned 18% of the share capital of the Company’s subsidiaries that own and operate Marikana and Limpopo and that participate in the Pandora joint venture.” It added that black investors own 26% of the share capital of its subsidiary that owns Akanani.
“We are now deeply engaged in examining ways in which the remaining 8% we need to achieve might be apportioned,” said the company.
There is clearly a balance to be struck between delivering this for our employees and communities and doing so in a way which is sustainable, fair and equitable to our present shareholders.”
The company added that “Share ownership schemes are one area of our thinking, although not the only one, and our ability to explore those actively is facilitated by the signing of our recent union recognition agreement.”
This does suggest that the company was looking more towards broad based structures to plug its gap.
Lonmin’s past BEE initiatives include a partnership with Shanduka Group, a BBBEE styled investment vehicle controlled by ANC deputy president Cyril Ramaphosa.
Ramaphosa used to seat on the Lonmin board and stepped down after being elected ANC deputy president in December last year.
Lonmin seems to be making a concerted effort to gain social capital. This is after the company found itself at the centre of the Marikana Massacre last year. This is after a labour conflict within the company’s workforce exploded leading to deadly clashes between rival unions, the old National Union of Mineworkers (NUM) and the new kid on the block in form of the Association of Mineworkers and Construction Union (AMCU). While investigations of the Marikana Massacre by a presidential commission of enquiry is yet to conclude its findings on the Marikana Massacre, there are strong views that the underlying causes are to be found in alienation of workers and surrounding communities from mining profits.
The new Lonmin CEO Ben Magara seems to be speaking to this in the commentary attached to the company’s financial results for the year ended September. Amongst other things Magara who took over as CEO in July this year said “My priority on joining the business was to meet as many employees and stakeholders as possible to begin the task of winning back hearts and minds in the wake of last year’s events at Marikana.
Whilst our hard work has begun to rebuild trust, demonstrated by the fact that we were able to sign a union recognition agreement and attend the Marikana commemoration, we still have much more to do in this regard. Our stakeholder relationships are business critical. I reject any contention that these are “soft” issues, set against the “hard” issues of operations and finances.”