The world's top platinum producer, Angloplat, launched a 35 billion rand ($4.8 billion) empowerment deal on Tuesday to sell mines to two black-led firms and hand out shares to its mostly black workers.
The deals will forge two new major players in South Africa's platinum sector, the world's largest, and burnish credentials of Angloplat, which had been under fire for not moving quickly to join in the nation's plan to boost black economic prospects.
In one of South Africa's biggest black empowerment deals, Anooraq Resources and Mvela Resources will vault into the top rank of platinum firms, controlling the third and fifth largest platinum deposits in South Africa. The news sent shares surging, with Anooraq's shares in Johannesburg jumping by 4.6 percent to 25 rand and Mvela's climbing 2.1 percent to 57.30 rand by 1205 GMT.
Angloplat rose 4.4 percent to 1,017.24 rand versus a largely flat Top-40 index of blue chips. The deals and the share plan will put around 35 billion rand of Angloplat's assets under black control, Angloplat added.
The sale price of mines and the value of workers' shares are 10.9 billion rand, but Angloplat said the deals will result in blacks controlling a much larger amount of platinum assets. South Africa's Anglo Platinum Ltd, majority owned by mining giant Anglo American Plc, accounts for around 40 percent of global platinum production.
It has been under pressure by the government to speed up its participation in the country's black economic empowerment (BEE) programme, which seeks to involve blacks in the mainstream economy after being excluded during apartheid.
Angloplat sold its assets at around a 30 percent discount to help boost prospects for the deals to be successful in the long run, Angloplat's Acting Joint Chief Executive Norman Mbazima told reporters following a presentation.
"The transactions incorporate clear, broad-based empowerment with the participation of women, communities and employees," Anglo Chief Executive Cynthia Carroll told the presentation. South Africa's BEE programme, which saw 56 billion rand of deals last year, has been seeking to broaden its scope after criticism that it has mainly benefited a small group of tycoons.
Under one deal, Angloplat will sell an effective 51 percent of its Lebowa Platinum operation and 1 percent of the adjacent Ga-Phasha project for 3.6 billion rand to Anooraq, which already owns 50 percent of Ga-Phasha.
Mvela will buy Anglo's 50 percent interest in the Booysendal project, boosting its stake to 100 percent, and also purchase 22.4 percent interest in Northam Platinum for 4 billion rand. Booysendal will be transferred to Northam in exchange for shares, resulting in Mvela having majority ownership in Northam.
Under the share scheme, Angloplat will distribute up to 1.5 percent of its shares, currently worth around 3.3 billion rand, to around 43,000 employees. The deal will enable Mvela Resources to start to fulfil a long dream to transform from a holding company with stakes in firms to an operating mining group.
Top black mining executive Lazarus Zim - formerly the chief executive officer of Anglo American's South African operations - bought a stake in Mvela in December through his Afripalm investment firm and became Mvela's executive chairman.