Mvela Resources becomes black-owned
Black business tycoon Lazarus Zim has led a consortium in the R1,5billion purchase of a substantial portion of Mvelaphanda (Mvela) Resources, taking the company to black-owned status and positioning it for further growth.
"This is a significant transaction in that it is the first time that a black economic empowerment company significantly empowers another in this manner. It comes from a strategic relationship we've had in the past, and it is an exclusive vehicle in terms of mining," Zim said yesterday.
The Afripalm consortium led by Zim said it would buy 19,3 percent of Mvela Resources, making the group over 50 percent black-owned, and the deal would see Mvela taking on Afripalm's future mining operations.
Tokyo Sexwale, the current chairman of Mvelaphanda Holdings, which owns 23 percent of Mvela Resources, said with the increase in the company's BEE shareholding to over 50 percent, the necessity for a previous management agreement between Mvela Resources and Mvela Holdings had fallen away.
"Our long term view is to become 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 our ultimate vision of creating an operating company," said Zim. The company currently acts as a resources investor with no mining operations.
Andrew Joannou, portfolio analyst at Renaissance Asset Management, said the deal could open the doors to the lucrative Booysendal Platinum Project, which has been under discussion for two years. He said there was a good possibility that Mvela Resources would sign a 50 percent joint venture with Anglo Platinum to run the mine.
"The significance of the deal is that it positions the company as a black-owned company. the Booysendal project has not gone through because there was a need for a black-owned company as an investor," Joannou said.
Zim would replace Tokyo Sexwale as chairman of Mvela Resources.