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Impala finalising empowerment deal Posted: Sun, 27 Nov 2005 [miningmx.com] -- IMPALA Platinum is finalising an empowerment deal thought to be with the Royal Bafokeng, a community which owns rights to properties Impala mines in South Africa’s North West province. Impala cautioned shareholders on Friday (November 25) that it was “... in the process of finalising a broad-based black economic empowerment ("BEE") ownership transaction”. No further details were provided. “We’ve issued a cautionary and don’t wish to comment at this stage,” said Cathie Markus, Impala executive director. On August 26, Keith Rumble, Impala CEO, told Bloomberg News that there were early stage discussions for the Royal Bafokeng to own 6% of the platinum company. Cancellation of a 22% royalty the Bafokeng collects annually on pretax profits from the Impala Lease Area might also be part of the same negotiations, he said. If completed, the world’s second largest platinum producer is expected to have, at least, fulfilled the five-year ownership transfer targets as set down in South Africa’s 2003 mining charter in which 15% of equity must be in black hands. In 2004, Impala sold a 26% stake in Lonmin helping create the R4.5bn Incwala Resources, a privately owned empowerment firm. A year earlier, Impala sold 20% of its R1.8bn Marula platinum mine to empowerment interests of which half was earmarked for Mmakau Mining, a company owned by Bridgette Radebe. The Bafokeng are a natural partner for Impala owing to long-standing ties between the parties. In addition to the royalty on pretax profits, the community has a 1.5% direct interest in Impala and board representation. The notion of swapping Bafokeng’s annual royalty for a larger direct stake in the company has been negotiated in the past without success. That was in 2003 when the Bafokeng’s corporate arm, Royal Bafokeng Resources, then led by former Impala Platinum CEO, Steve Kearney, negotiated with Rumble. However, neither side could agree on suitable value - it was thought that Kearney wanted the Bafokeng to take a 20% stake in Impala - and the negotiations were set aside. A deal between the sides was also complicated by the proposed Royalty Bill, legislation planning to impose a 4% levy on the revenues of platinum companies by 2009. The Royalty Bill is currently being reviewed but there might be added pressure for Impala to deal with the Bafokeng if it was to be ‘double-taxed' by the Royalty Bill and Bafokeng royalty. Markus said there had been no further clarity yet on whether the company would face a double royalty. “Things have been pretty much the same for the past 18 months.”Free news alerts: click here to subscribe
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