Bobby Godsell, CEO, AngloGold Ashanti
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AngloGold fully empowers SA operations
Allan Seccombe
Posted: Mon, 02 Oct 2006

[miningmx.com] -- ANGLOGOLD Ashanti fully empowered its South African operations by finalising a transaction for its 30,000 workers and empowerment group Izingwe Holdings to take shares in the world’s second-largest gold producer.

AngloGold Ashanti reckons it was 20.8% empowered before the transaction after selling gold mines to African Rainbow Minerals.

Monday’s transaction whereby 3.8 million shares will be issued to an employee trust, and Izingwe will acquire a further 1.4 million shares, accounts for slightly more than six percent of the South African gold production.

At Monday’s share price of R292, the value of the transaction stood at R1.5bn.

The true value of the deal will be unlocked over the next seven years, as the shares are vested in five equal tranches over five years on the third anniversary of the launch of the trust.
a company genuinely co-owned by its employees
The transaction will be implemented by the end of 2006 once regulatory and legal matters are finalised, including shareholder approval.

Under South African mining legislation, companies need to have 26% black ownership by 2014 in order to qualify for new order mining and prospecting rights.

The Department of Minerals and Energy (DME) has already granted AngloGold Ashanti new order mining rights by on the understanding that it would grow its empowerment levels.

“This completes the promise we made about the ownership component of the Mining Charter, but there is an underlying reason and that is that we wanted this to be a company to genuinely co-owned by its employees,” said AngloGold Ashanti CEO Bobby Godsell.

AngloGold Ashanti is 41% owned by Anglo American. Following an empowerment pattern set by De Beers, a diamond producer in which Anglo American holds 45%, all employees regardless of race stand to benefit from the scheme. Out of the 30,000 employees, 91.5% are historically disadvantaged.

Frans Baleni, general secretary of the National Union of Mineworkers (NUM), the largest mining workers union, said he was concerned about what would happen after seven years when the transaction had run its course.

“It must not be the case to come up with a scheme to obtain mining licences and then the workers are out of the system,” he said.

Godsell said AngloGold Ashanti was committed to engaging the unions to continue the partnership.

Inzingwe’s chairman Sipho Pityana will join AngloGold Ashanti’s board and he will represent union interests.
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The DME insisted on the transaction not benefiting just AngloGold Ashanti employees but also black entrepreneurs, Godsell said.

The transaction will be funded through dividend flows.

Each employee will receive 30 free shares spread equally over the five-year vesting period. These shares will carry the full value at the time of vesting.

Each employee will also receive 90 loan shares, which again will be spread equally over five years, and they will receive the difference in the value at the time of issue including a 10% discount and the value at the time of vesting. If the share price on the date of vesting is below that price, the date can be extended by six months.

Izingwe will also receive loan shares and 50% of the dividend flow will go towards paying off nearly R500m, Pityana said.