Wiseman Khuzwayo
BHP Billiton Energy Coal South Africa (Becsa) lifted its transformation credentials a notch higher yesterday when it announced it had entered into a black economic empowerment (BEE) transaction with a black-owned consortium led by the Pembani Group.
The consortium, which includes a broad-based BEE grouping, will effectively be an 8 percent shareholder in Becsa. Kesagee Nayager, a spokeswoman for BHP Billiton, said the company was not in a position to comment on the value of the transaction or the other partner at this stage.
Pembani was formerly Worldwide African Investment Holdings and is chaired by Phuthuma Nhleko, the former chief executive of MTN. It is a diversified energy investment firm with interests in the mining and petroleum industries.
The mining charter requires local mining companies to have a 26 percent BEE ownership by 2014.
Becsa said its shareholders had also approved the implementation of an employee share ownership plan (Esop) in which participating employees would hold a beneficial interest of 2 percent equity in the firm, further enhancing Becsa’s BEE credentials.
It said completion of the transaction and the introduction of the Esop were both conditional on the company receiving consent from Eskom, in addition to certain other minor technical conditions precedent.
Becsa said it required the consent of Eskom to effect its BEE and Esop transactions in accordance with the provisions of the coal supply deal between the two parties for the supply of coal to Duvha power station.
The company added: “In terms of the agreement, Becsa requires Eskom’s consent to effect a change in the shareholding of Becsa, as well as to a change in the structure of Becsa’s guarantor. Becsa is engaged in negotiations with Eskom to procure the necessary consents.”
Becsa is the second-largest producer of thermal coal in South Africa for domestic and export markets. It operates three collieries in the Mpumalanga coalfields: Khutala, Klipspruit and Middelburg Mine Services.
The company also announced that it had agreed to sell additional resources to Kuyasa Mining in order to facilitate a longer mine life of its operation in Delmas. The development of Delmas Colliery started more than 10 years ago to create Kuyasa Mining, which was Becsa’s first BEE transaction. Becsa says this will create more value for the business and its employees.
BHP Billiton president of energy coal Jimmy Wilson said: “Becsa’s unwavering commitment to the objectives of the mining charter and the South African economy will continue to drive us to play an active role in the transformation of mining and the economic empowerment of our people.”
Becsa said it had been on the transformation journey for more than a decade and concluded numerous empowerment transactions through direct sales of assets during this period.
In addition to Kuyasa Mining, it has facilitated the establishment and growth of several empowerment firms, including Eyesizwe Coal, now Exxaro, and Optimum Coal.
In the process, it facilitated access to export capacity for BEE firms at the Richards Bay coal terminal of about 10 million tons a year.
It said: “Through its previous direct sales of assets and the new empowerment transactions announced today, Becsa is now in a position of more than meeting the transformation requirements of the Mineral and Petroleum Resources Development Act and the mining charter, and subsequently has received conversion of all its old-order mining rights. Becsa acknowledges the constructive and collaborative way in which the Department of Mineral Resources facilitated the process of finalising this empowerment transaction.”
Ajay Lalu, the managing director of Black Lite Consulting, said: “Pembani has a good track record and capital. It depends on who the other partner is in the consortium. They must be broad-based otherwise the government is not interested in the usual suspects.”