Anglo American Platinum Limited |
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Regulation and mineral legislation
Material issue
MINING LICENCES AND BLACK ECONOMIC EMPOWERMENT
Anglo American Platinum Limited, having achieved execution on 14 out of 15 mining licences, remains committed to meeting the requirements of South Africa’s Mineral and Petroleum Resources Development Act and the Mining Charter. The Group is proud of the contribution it has made to empowerment in South Africa through the numerous transactions it has facilitated since 2000. These have resulted in the significant and meaningful empowerment of historically disadvantaged South Africans (HDSAs) in various operations and projects. Below is a brief summary of these transactions:
| Date | Summary of transactions |
| August 2000 | Sale of a 17.5% (and facilitation of an additional 5%) in Northam to Mvelaphanda Resources. |
| August 2001 | Formation of 50:50 Modikwa JV with ARM Mining Consortium, an empowerment company that includes the Mampudima and the Matimatjatji communities of approximately 60,000 rural residents as broad-based participants. |
| August 2002 | The establishment in July 2002 of a 50:50 unincorporated joint venture with Royal Bafokeng Nation over the Bafokeng-Rasimone Platinum Mine (BRPM) and the Styldrift project area. Following the restructuring of the BRPM joint venture in December 2009, Royal Bafokeng Platinum Limited (RB Plat) acquired a 67% interest as well as operational control of the BRPM Joint Venture on 4 January 2010. RB Plat listed on the JSE Limited on 8 November 2010 and the Group currently holds a 12.6% equity interest in RB Plat, in addition to the 33% direct interest in BRPM. |
| February 2003 | The formation, in August 2002, with Lonmin plc, of the Pandora Joint Venture, which includes the participation of the Bapo-Ba-Mogale Mining company and Mvelaphanda Resources (on behalf of Northam) as empowerment partners, each having a 7.5% interest in the joint venture. |
| December 2005 | The disposal in October 2005 of the rights on the property Elandsfontein 440 JQ to Eland Platinum Mines (EPM), with the Ngazana Consortium holding a 26% interest in EPM. |
| July 2006 | The development of a chromite recovery plant at the Group’s Union Mine with Siyanda Chrome Investments, an HDSAcompany. |
| November 2006 | The transaction, in December 2006, with the Bakgatla-Ba-Kgafela (Bakgatla), who are the traditional community at Union Mine, giving the Bakgatla a 15% stake in Union Mine as well as a 26% stake in the Magazynskraal project and a 55% stake in the Rooderand project. |
| September 2007 | The announcement of The Group’s sale to Anooraq Resources Corporation (Anooraq) of an effective 51% of Bokoni Platinum Mine (Bokoni) and an additional 1% of the Ga-Phasha, Boikgantsho and Kwanda Joint Venture projects. Anooraq now owns and controls an effective 51% of Bokoni, Ga-Phasha, Boikgantsho and Kwanda. This transaction gave Anooraq control over the third-largest PGM resource base in South Africa. |
| September 2007 | The disposal of the Group’s 50% interest in the Booysendal project and of its 22.4% interest in Northam to Mvelaphanda Resources, for a total consideration of R3.7 billion. Mvelaphanda Resources injected the Booysendal project into Northam in return for Northam shares, resulting in Mvelaphanda Resources acquiring majority control of Northam. This transaction gave Mvelaphanda Resources control over the fifth-largest PGM resource base in South Africa. |
| September 2007 | Announcement of the establishment of an employee share ownership plan (ESOP) that effectively owns 1.5% of Anglo American Platinum Limited to benefit all permanent employees not participating in any other Company share scheme. More than 90% of the scheme’s beneficiaries are HDSAs. |
| December 2008 | The Group swapped its 37% interest in the Western Bushveld Joint Venture for a 26.6% equity interest in Wesizwe Platinum Limited (Wesizwe), an HDSA company. |
| February 2011 | Announcement of the Group’s R3.5 billion (circa. 2.33% of market capitalisation) community economic empowerment transaction, Project Alchemy. See details in Project Alchemy and the community share ownership scheme - Project Alchemy. |
MINERAL RIGHTS UNDER CONTENTION
Anglo American Platinum Limited is geared for growth should market demand for PGMs increase, with an exploration right-holding of 856.6 Moz 4E in South Africa and Zimbabwe. However, 8.3% of Anglo American Platinum Limited’s exploration ground is subjected to legal contestation and as a result the Company is at the advanced stage of engagement with the DMR to amicably resolve these disputes. None of mineral resources associated with the rights under dispute are included in Anglo American Platinum Limited’s declared resource estimates. These disputes relate to exploration rights to the following properties, Middellaagte 382 KQ, Brakspruit 299 JQ, a portion of Tigerpoort 426 KS, Rooderand 46 JQ and the Modikwa deeps.
MINING CHARTER
The end of 2011 marked seven years since the
Mining Charter and its associated scorecard
for broad-based socio-economic empowerment for South Africa
took effect. Anglo American Platinum Limited remains committed to the transformation
of the South African mining industry and welcomed the
release of the revised
Mining Charter in September 2010. The charter
retained the requirement, set in 2002, of a historically
disadvantaged South African (HDSA)
ownership of 26% by 2014. The revised charter provides
clarity in a number of areas, for instance in its definition
of the term ‘beneficiation’. This is the first year in which
we are reporting against the new
Mining Charter scorecard.
The Company continues to meet all its Mining
Charter obligations. The
mining scorecard reference table provides a
summary of its performance against the charter. It also
shows where to obtain more information regarding particular
sections of the new scorecard.
PROJECT ALCHEMY
An multibillion rand economic empowerment
transaction, called Project Alchemy, has been
designed to promote long-term sustainable
development in host communities and key
labour-sending areas that are not currently
benefiting from the Company’s extensive
BEEprogrammes. This groundbreaking initiative
heralds a new approach that emphasises broad-based
black economic empowerment and engagement with
communities.
Alchemy is a R3.5 billion transaction aimed at
ensuring the long-term sustainable development of
four of our host communities and major
labour-sending areas. The transaction is notionally
vendor-financed over 10 years at a fixed 9.5%
notional interest rate and includes an upfront
discount of 5%. Anglo American Platinum Limited has issued a total of
6,290,365 ordinary shares of 10 cents each to the
Lefa La Rona (“Our Inheritance”) Trust. The market
value of such shares (inclusive of the 5% discount)
is R528.59 per share, determined with reference to
the share price immediately prior to the
announcement date for the transaction. The Alchemy
shares issued represent 2.33% of Anglo American
Platinum Limited ordinary
shares in issue prior to the issue of the former.
The Lefa La Rona Trust has been established to act
as a conduit between the Company and four
development trusts (Development Trusts), to be set
up for the benefit of host communities within an
approximate radius of 15 km from the Amandelbult,
Rustenburg, Twickenham and Mogalakwena mines
(collectively “the Mines”) and a non-profit company
(Non-profit Company) incorporated for the benefit of
the labour-sending areas. The Development Trusts and
the Non-profit Company will benefit from the
following cash flows: annual dividend receipts; a
guaranteed minimum dividend flow of R20 million per
annum to provide an annual cash amount to the
Development Trusts and the Non-profit Company, after
taking into consideration the annual dividends
received; rechannelled CSI spend of R30 million to
the extent that the Development Trusts secure
approval for development projects within the host
communities; health and safety cash-flow benefits
for the Development Trusts if key performance
indicators relating to on-and-off-mine health and
safety targets are achieved; proceeds from the
potential increase in the Anglo American Platinum
Limited share price after
settling of the notional vendor funding, to the
extent that the shares are disposed of by the
Development Trusts and the Non-profit Company at the
expiry of the term of the transaction.
The Company’s ultimate ambition in this transaction
is to make a meaningful and sustainable contribution
to the ability of those communities to thrive well
beyond the life of our mining operations.
MINE NATIONALISATION – SOUTH AFRICA
The African National Congress (ANC), South
Africa’s ruling political party, has completed
research into the pros and cons of mine
nationalisation in South Africa. In 2011, the ANC
appointed researchers to conduct a global study into
mine nationalisation models. A first draft report
was tabled in November 2011. The ANC’s secretary
general has asked the researchers to make amendments
to the report and it is expected that the document
will be made public in the first half of 2012.
Thereafter, the ANC will debate the matter of mine
nationalisation at its policy conference in
mid-2012.
We continue to work with representative bodies of
the mining industry in order to be able to make a
contribution to finding, together with the ruling
party and other stakeholders, a collective and
sustainable model capable of addressing the
country’s current challenges of poverty,
unemployment and inequality in a constructive
manner. We remain of the opinion that mine
nationalisation will not solve the economic and
transformational challenges South Africa faces, but
will instead have a negative impact on the country’s
economy and ability to create jobs.
INDIGENISATION ACT – ZIMBABWE
The Indigenisation and Economic Empowerment Act
(Indigenisation Act) was signed into law on 9 March
2008 and seeks to ensure that at least 51% of the
shares of every public company and any other
business is owned by indigenous Zimbabweans. The
Minister of Youth Development, Indigenization and
Empowerment, published regulations for the mining
sector on 25 March 2011. The regulations apply to
every mining business not controlled or 51% owned by
indigenous Zimbabweans. Such businesses were
required to submit an indigenisation plan by 9 May
2011 and were also required to dispose, by 25
September 2011, of at least 51% of their shares to
entities specifically designated in the regulations.
Amzim Holdings Limited, the holding company for the
Zimbabwean investment, submitted its indigenisation
plan in line with these deadlines. At year end,
negotiations with the Minister of Youth Development,
Indigenization and Empowerment, regarding this plan
were still in progress. As part of its overall plan
to comply with the requirements of the
Indigenisation Act, Unki made a $10 million donation
to the Tongogara Rural District Community Share
Ownership Trust. This trust was established by Amzim
Holdings Limited to advance the empowerment of the
Unki Platinum Mine host communities. It is also
envisaged that, subject to conclusion of
negotiations with the Zimbabwean Government, the
trust will subscribe for shares equivalent to 10%,
on a fully diluted basis, of the issued share
capital of Amzim Holdings Limited.
WATER USE LICENCE
Our operations with approved water use licences (WUL) are Twickenham Platinum Mine, Polokwane Metallurgical Complex, Mogalakwena Mining area and the Mototolo Concentrator and Der Brochen Project (whose integrated WUL was approved in April 2011. Although submitted as far back as 2004, three of our operations, Rustenburg, Union and Amandelbult, located in the North West Province of South Africa, remain without approved WULs. These operations have valid water permits under the old Act. We continue to engage with and support the regulator, Department of Water Affairs, both at the regional level and at National level through our Government Relations department, in relation to the approval of our WULs.
Mining scorecard reference table
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