Kumba Resources, a major resources firm majority-owned by Anglo American, has interviewed 130 potential partners in its quest to meet the black economic empowerment (BEE) requirements of the Mining Charter.
Presenting Kumba’s interim results this week, CEO Con Fauconnier said he hoped to go public about the company’s empowerment direction by the end of the year. “It makes sense,” he says, “that we consulted our new controlling shareholder regarding its BEE strategy.
“When the mining charter came out two years ago it stipulated that by 2008 15% of the value of the mining industry must be owned by previously disadvantaged people. At the time that amounted to about R100-billion. You need considerable creativity to deliver on that scale — we are getting there.”
Listed in November 2001 as part of Iscor’s unbundling, Kumba has been slow to rise to the charter’s challenges. Its excuse for vagueness over the charter’s BEE ownership requirements is that a disputed Anglo deal put ownership issues on hold for more than a year. The deal was challenged by the Industrial Development Corporation at the Competition Commission on the grounds that Anglo, with its primary listing in London, would own too great a share of the South African minerals sector and that BEE issues should take precedence.
Last year the tribunal finally found in Anglo’s favour — on condition that no one could simultaneously hold office on the boards of Kumba and Anglo’s other metal and minerals interests, Highveld Steel and Vanadium Corporation, and Scaw Metals.
Kumba’s latest interim results show that booming commodity prices and sales were seriously diluted by the rand’s 24% appreciation over the 12 months to June 30. Nevertheless, shareholders (Anglo holds 66,6%) will see an interim dividend of 35c, which makes a 55c dividend for the year.
Kumba, with 9 000 employees (3 000 at its Sishen iron ore mine), was also vague about the employment equity side of the charter’s requirements. The company benefited from phenomenal growth in the Chinese ore market. It has a joint-venture base-metals refinery in Chifeng, China.