NUM “doing good business’ in mining sector

[miningmx] — The National Union of Mineworkers (NUM) is not afraid to do business
with mining companies.

The NUM’s property company, Numprop, is linked through housing projects to at
least two mining houses, Xstrata and Harmony Gold. This is despite the fact that the
union explicitly states it does not invest in the sectors in which it ­organises to
prevent conflicts of ­interest.

The NUM has two companies through which its investments are held: Numprop and
the Mineworkers’ Investment Company (MIC).

Both are owned by the NUM’s Mineworkers’ Investment Trust (MIT), in which its top
officials are trustees. The trust was established in 1995 “to improve the quality of
life for its members and former members, and their dependants through ­investment

Numprop has a business relationship with Xstrata through the Tubatse Estate, a
housing development in the Limpopo mining town of Burgersfort. Numprop is the
joint developer of the estate with Commercial South African Properties.

The project is believed to be worth R750m. Housing units at the Tubatse ­Estate will
cost between R600,000 and R1.5m. Although Xstrata denies any ­involvement in the
development, the MIT’s annual report for 2011 states that a tender “was issued by
Xstrata in which we [Numprop] were short-listed’.

Xstrata’s Christopher Tsatsawane said the company did not have any involvement in
the ­Tubatse Estate.

The NUM has been under fire in the wake of the Marikana massacre for its perceived
close relationships with mining houses. This is seen as one of the reasons behind the
growth of the Association of Mineworkers and Construction Union, NUM’s competitor
on the platinum fields.

NUM general secretary Frans Baleni, who chairs the MIT, said that although the
union prevented its entities from doing business in the mining industry, this did not
preclude them from investing ­”upstream or downstream of the industry, where the
NUM does not organise’.

“To prevent the inclusion of its various commercial entities from any association with
mining would in effect bar these entities from ­undertaking any transactions, given
how closely interlinked mining is with all sectors in the South African economy,’ he
told City Press.

On the MIT’s links with mine owners, Baleni said the trust cannot dictate the
investment mandate of its partners. He reiterated that mining reaches all sectors of
the economy.

“If we do not want any association with partners who invest in mining companies,
then we would be very limited in terms of whom we co-invest with,’ Baleni

He said the reason for Numprops’ involvement in housing developments in mining
towns was to improve the lives of members. The MIT had no reason to bar Numprop
from doing business in the mining industry, as this was its way of facilitating access
to housing for mine workers, Baleni said.

Another Numprop partnership “in the pipeline’ is with Harmony Gold to convert
mine hostels into family units.

Numprop also intends to redevelop mining towns and has teamed up for this with
Mzansi ­Investment Holdings. The union says Numprop doesn’t make any profit,
owing to poor funding.

The NUM revealed at its congress that it was investigating the possibility of the MIC
taking over Numprop. Numprop also wants to turn a farm close to Humansdorp,
Eastern Cape, into a new RDP housing ­development.

The company provides the NUM with office accommodation and owns 10 properties
valued at R74m.

The union’s head ­office in downtown Johannesburg is also owned by Numprop.
Two weeks ago, Numprop kicked out the correctional services department after it
failed to pay about R1m in rent. Parole officers had to work in the streets after being

The MIC wants its investment portfolio to have a net asset value of R3bn by next
year and is ­targeting healthcare, renewable energy, property, retail and the
telecommunications sector for ­future investments.

The MIC also has business ­relationships with several firms with mining interests.

Remgro, the MIC’s fellow shareholder in FirstRand, owns about 5% of Implala

WDB Investment Holdings, the MIC’s empowerment ­partner in FirstRand and Masana
Petroleum Solutions, has interests in Kalahari Resources and Anglo Inyosi Coal.

The NUM collected about R209m in fees from its 310,820 members in 2011.

– City Press