[miningmx.com] – NOAH Greenhill, the former banker who is best known for putting the JSE’s Altx on the map, has since mid-2014 taken up the job of diversifying the business interests of the 350,000-strong North-West province community, Bakgatla-ba-Kgafela.
As a result, he’s casting around for interesting investments in the whole gamut of opportunity ranging from property to industry to energy; even media.
Bakgatla-ba-Kgafela, for instance, is the 40% shareholder in Siyaya TV, the new-ish pay television provider which has broadcast rights to soccer games played by Bafana Bafana and other national soccer teams including Banyana Banyana, the women’s team.
That’s all good and well. In the short-term, however, Greenhill is faced with mining issues; specifically, just how the sale of Anglo American Platinum’s (Amplats’) Union section plays out.
The Bakgatla has a 15% interest in a joint venture with Amplats in its Union mine and smelter which is held through Bakgatla ba Kgafela Investment Holdings of which Greenhill is CEO. There’s also a pre-emptive over a further 11% in the asset in the event of it being sold.
Greenhill told Finweek that the Bafgatla have instructed Amplats they intend to exercise the pre-empt which would take its overall position to 26%. Yet more interesting, the Bakgatla has teamed up with one of the commercial bidders for Union.
The sale of Union section is part of Amplats’ strategy to rid itself of its non-core assets in favour of investing in newer operations that it can more easily mechanise. It’s also selling shafts in Rustenburg, but it’s the Union section that is most likely to be sold first.
As such, the Bakgatla is something of a kingmaker for the interested bidders in Union section because it provides a ready-made broad-based empowerment option in which the South African government is now so keen, after a decade of making individual black enterpreneurs extremely wealthy.
There’s also a lot riding on turning Union section into a success.
About 98% of the Bakgatla’s wealth is derived from the platinum sector, but market conditions are so tough that the dividends have all but dried up.
“They’ve invested the money prudently and they have a pool of cash, but the Bakgatla know it won’t last forever,’ says Greenhill.
Greenhill says he’s also got his eye on the energy market. “We’ve had cursory discussions on coal and the energy space. Diamonds is also an interesting space for us. “The fundamentals are looking good and they are improving,’ he says without providing details.
“Yes, I have to diversify the business but it doesn’t mean diversifying out of mining; it just means diversifying the portfolio,’ he says.
“So we could become involved in other mining opportunities. Or look for other sectors whether it be energy, food, manufacturing or property,’ he says.
One senses, however, the fortunes of the Bakgatla are tied up with the prospects in the platinum market.
The community is, for instance, a shareholder in Sedibelo Platinum Mines, the company which Pallinghurst Resources is managing.
There’s been talk of listing the company and achieving a market-related price – which would no doubt assist the Bakgatla’s balance sheet – but the platinum industry is not yet supportive of investors.
What’s worse is there’s no agreement on where the platinum market is going.
Most agree that it’s running a supply deficit but above ground inventories are so significant that they could keep a lid on the platinum price for two to two-and-a-half years, according to Impala Platinum.
This article first appeared in Finweek, a weekly magazine published in South Africa.
