Lazarus Zim has resigned from the board of Telkom with immediate effect, the fixed-line telephone operator announced on Wednesday. This is in light of his commitments to the recently announced Afripalm and Mvelaphanda Resources black economic empowerment (BEE) transaction.
It was announced on Tuesday that Zim will succeed Tokyo Sexwale as chairperson of Mvela.
South Africa’s BEE landscape is set to be dramatically altered through the deal that brought Afripalm and Mvela together, said Brian Kennedy, MD of Nedbank Capital in a statement on Wednesday. The mining and resources team at Nedbank Capital — the sole arranger and underwriter to the deal — believes a new wave of BEE transactions is imminent.
Kennedy said the significance of the deal is that it takes empowerment to a new level and lays the groundwork for consolidation of fragmented black interests in the resources sector.
“The Mvela Resources-Afripalm tie-up can add a new dimension to cooperation between BEE groups in mining, a sector with high barriers to entry. It is a key step in building big sustainable black-owned businesses. More empowerment players will see the benefit of getting together,” he said.
Zim said this is the first deal that sees empowerment interest in an already empowered company exceeding 50%.
Mvela Resources, in which Sexwale will retain his interest, has stakes in the South African operations of Gold Fields, as well as in Northam Platinum and Transhex, the diamond producer.
“Through this transaction, Afripalm is injecting R1,2-billion into Mvela Resources. Our goals are to deploy the transaction proceeds in acquiring and developing new mining or other value-accretive opportunities and grow the existing base in the platinum sector,” Zim said, adding that Mvela’s long-term view is to become the pre-eminent black-controlled mining house and principal consolidator of key opportunities in the sector.
“The aim is also to diversify the Mvela Resources portfolio geographically and to achieve a better balance between the existing components of diamonds, gold and platinum as well as pursuing interests in other commodities,” he said.
“Ultimately, the goal is to be a major diversified resources group on the African continent. This transaction is a strong platform from which to broaden and strengthen black management capacity at Mvela Resources as part of the vision of creating an operating company.”
Afripalm’s broad-based empowerment component includes Unipalm, a broad-based BEE group comprising more than 35 000 diverse South Africans.