[miningmx.com] — ANGLO American SA’s executive director, Godfrey Gomwe, told parliament on Wednesday the company has already reached government’s black ownership target of 26% for 2014, and that any figure suggesting otherwise was calculated incorrectly.
Gomwe and other top mining executives appeared before parliament’s mining portfolio committee to explain the vast difference between the department of mineral resources’ figures on black ownership in the industry – pegged at 9% overall – and that of the Chamber of Mines.
Gomwe said the method of calculating ownership was at the heart of the variance between the figures. He said government only took cognisance of empowerment at the holding company, while ownership at asset level was overlooked.
The asset level, Gomwe said, was where real empowerment was happening and was also the level that the Mining Charter emphasised. He said the fact that Anglo could demonstrate how it had complied with the charter’s requirements was one of the reasons why the company has received its conversions to new order mining rights.
Gomwe said Anglo has concluded R60bn’s BEE transactions since 1994 across all its business units. MPs, however, were sceptical, telling Gomwe that Anglo’s “glossy’ presentation was “impressive’ but that the beneficiaries of the empowerment transactions were highly indebted.
Chairman of the committee Fred Gona (ANC MP) was persistent in his questions about how sustainable Anglo’s BEE transactions were.
“Is it that this 26% ownership is unencumbered ownership or is it encumbered?,’ Gona asked. ‘For us ownership also talks to what levels of debt these BEE people are exposed to. You can attain the minimum ownership in terms of charter (26% by 2014)but what does that mean?’
He also questioned the payments of R500,000 due to each of Kumba Iron Ore’s 5,000 employees at the end of November. These payments are the proceeds of an employee share ownership scheme. Gona said it appeared too good to be true, because it had never been done before.
Anglo said there was no catch about these payments, other than that its employees would have to pay tax. The National Union of Mineworkers, by contrast, has hailed the Kumba empowerment model as one that all companies should follow.
Gomwe also said it was “very important’ to take into account that Anglo’s empowerment transactions had not only led to the creation of flagship black-owned mining companies (Exxaro Resources, ARM, Mvelaphanda/Afripalm and Shanduka), but that the company had “acted like a bank’ and contributed towards vendor financing.
“This is recognition that if there are sustainability issues in future we can change the structure to make these sustainable,’ said Gomwe. “It is a major commitment for any company which sells some equity to make funding available (too).’
The committee was due to hear presentations from five mining houses, but only managed to listen to Anglo American and De Beers by lunchtime. The remaining three teams would have to come back next week for their presentations.
