Global mining house Xstrata has announced a R575million empowerment deal on its Rhovan vanadium facility near Brits in the North West, which it says completes its empowerment requirements in South Africa.
"The transaction will complete the facilitation of meaningful black participation in Xstrata's South African operations, according to the ownership provisions of the Mineral and Petroleum Resources Development Act of 2002," said Xstrata.
The Bakwena Ba Mogopa Traditional Community has agreed to purchase a 26percent stake in the company through a pooling and sharing venture, where the community contributes the surface rights under which the ore body lies. Xstrata also previously paid a royalty to the community.
The company said the community would obtain attributable cash flows for its interest in the project in return for it funding its portion of operating and capital expenditure.
"We are pleased that the community is now a material shareholder in this business, and that we have an opportunity to participate jointly with Xstrata in developing the asset to the benefit of both participants," said Chief MC Mathibedi of the Bakwena Ba Mogopa.
"We believe Xstrata now has in place . firm plans to reach 26percent black empowerment in each of its South African businesses," said Simon Toyne of Numis in London.
Xstrata's empowerment on its other assets include its Chrome partnership with Merafe, its Motololo empowerment deal and its coal partnership with African Rainbow Minerals.
The Bakwena Ba Mogopa Traditional Community is also African Platinum's empowerment partner on the Leeuwkop project. - I-Net Bridge