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AngloGold to 'sell' shares to labour Posted: Mon, 06 Jun 2005 [miningmx.com] -- ANGLOGOLD Ashanti, the world’s second largest gold producer, is negotiating to handover a portion of its shares to labour as part of efforts to win a new order mining licence from the South African government. An employee share option plan had been a strategic intention of the company “for some time,” said Steve Lenahan, AngloGold Ashanti spokesman. He said, however, that a share option plan was also part of “a continuing debate with the [South African] government about mining licence conversions.” “We are aware this objective is shared by government so it’s perfectly natural to discuss this broad intention with it and the trade unions,” Lenahan said. In February, it emerged that AngloGold Ashanti’s efforts to obtain a new order mining licence, in terms of the Minerals and Petroleum Resources Development Act, were being stalled because it did not have an empowerment partner. Rather than secure an equity partner, AngloGold Ashanti has claimed credits for a new mining licence on the basis of the sale of its gold mining shafts to Patrice Motsepe, the executive chairman of African Rainbow Minerals. Sandile Nogxina, director-general of the minerals and energy department said nothing less than 5% of the company had to be sold. “We are beginning to find one another,” he said of negotiations with AngloGold Ashanti. “The company seemed to think it did not need to do any empowerment. Now they are going to do an empowerment deal that will involve the workers,” he said. Lenahan said the structure of the employee share option plan had yet to be confirmed. “These are complex structures that will take time to bring to fruition,” Lenahan said. By way of parallel, roughly 2.5% of AngloGold Ashanti shares were set aside for the executive share incentive scheme, equal to about 5% of South African gold production. Another government source said AngloGold Ashanti was tackling “the concept” of selling down part of the company to win additional mining licence credits. “It’s not a question of ‘if’, but ‘how’ the company is going to do it,” the source said. Moferefere Lekorotsoane, spokesman for the National Union of Mineworkers, welcomed the initiative. "We would do our utmost to assist workers in using the shares in the share option scheme as efficiently as possible," he said. If successful, AngloGold Ashanti hoped to meet its 10-year empowerment targets set down by the South African government in 2003. In terms of this target, 26% of the company’s equity had to be sold to empowerment interests on a willing seller-willing buyer basis. "This was always going to be a contentious issue," said an analyst. "It's a push in the right direction but there is potential for value leakage," he said. The concern is that labour was unlikely to actually pay for the share options. One possibility, however, was if the share option plan was linked to productivity or even wage increases, an analyst said. Other outstanding issues required before the company could be granted a mining licence conversion was the submission of a region-by-region social plan, Nogxina said. Higher grade mining news. Straight to the point. Straight to your mailbox. Subscribe now for miningmx's free news alerts.
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