South African gold miner Harmony on Tuesday said it considered the issue of empowerment concern Simane’s 2,1% stake in the company a closed matter and it would not get involved in the issue.
Harmony was reacting to reports of the alleged unravelling of the Simane empowerment transaction involving entrepreneur Mzi Khumalo and other controversies surrounding the deal.
Harmony has engaged in four empowerment transactions to date with Simane, Khuma Bathong, African Vanguard Resources and then a merger with ARMgold.
“Regarding the Simane transaction, Harmony was initially approached by the Industrial Development Corporation (IDC), who was willing to finance the participation by an [empowerment] company,” Harmony said in a statement on Tuesday.
An agreement was initially reached with Komanani, a consortium led by Mashudu Ramano.
This initiative was approved and supported by the Department of Minerals and Energy at the time.
On failing to secure finance to facilitate their participation, the IDC proposed replacing Komanani with Simane.
Harmony’s rationale for the transaction was to strengthen the company’s balance sheet at the time in order to continue with its strategy of acquiring mainly South African assets.
Harmony raised R862-million, used to finance the acquisition of 50% of Free Gold from AngloGold in December 2001.
“To protect the interests of our shareholders and the credibility of the transaction, provision was made in the agreement for a lock-up period on the sale of the issued shares as well as limitations on the transfer of shareholding to ensure the delivery of the initial empowerment benefits,” Harmony said in a statement. – I-Net Bridge