[miningmx.com] – THE weakness in the share prices of South Africa’s mining companies has weighed heavily on the wealth of the country’s top mining bosses. According to calculations produced by Sasha Nerishykine of stockbrokerage, Vestact, Patrice Motsepe and Des Sacco, frequently identified as among the richest in SA, lost a combined R3.7bn from January to end-May.
Shares in African Rainbow Minerals (ARM), of which Motsepe is executive chairperson, fell just over R4bn from January until now owing to weakness in the iron ore price as well as platinum. Its gold investment through shares in Harmony Gold also suffered in the five month period.
The outcome was a paper loss of some R1.45bn for Motsepe in the first five months of this year represented by his 40.84% stake in the company and including a small indirect interest in ARM through Botho-Botho investment which owns 0.29% of ARM. It should be mentioned that Motsepe announced earlier this year that he intended to give half of his wealth away to charitable organisations via a trust.
Patrice Motsepe, executive chairperson, African Rainbow Minerals (ARM).
| 02-Jan-13 | 28-May-13 | |
| ARM share price | 190 | 173.54 |
| Total shares in issue | 215 575 076 | 215 575 076 |
| Market capitalisation ZAR | 40 959 264 440 | 37 410 898 689 |
| Motsepe shares | 88 382 206 | 88 382 206 |
| Motsepe worth | 16 792 619 140 | 15 337 848 029 |
| Difference | 1 454 771 111 | |
| Source: ProfileMedia |
Sipho Nkosi, CEO of Exxaro Resources, a company heavily linked to the price of thermal coal – which has declined about a quarter in price in the last year – saw his 3% stake in the R50bn company shrink R291m since January. Nkosi holds 9.89 million shares in Exxaro mostly through the Main Street 333 Proprietary Ltd which owns 186.6 million of Exxaro Resources shares.
Miningmx readers need not bear too heavy a heart for Nkosi, however. That’s because Exxaro Resources still paid out a R1.5bn dividend on April 15 worth some R14.8m which should go some way to soothing the impact of the share price weakness.
By far the heaviest losses, however, were suffered by Des Sacco, chairperson of Assore, a company which has significant stakes in SA’s manganese and iron ore export industries. Sacco saw R2.27bn worth of share price declines so far this year.
Again, Sacco benefited from a significant R2.5bn dividend paid by Assore on March 11, equal to a personal income of R81m, not to mention the R5.3m paid in salary last year.
“What I guess is also important is at what price these shares were acquired for,’ said Nerishykine. “In the case of Des Sacco who has been at Assore for a while, at what price did he inherit these shares from his father, the founder?’
Des Sacco, chairperson, Assore
| 02-Jan-13 | 28-May-13 | |
| ASR share price | 410 | 340 |
| Total shares in issue | 139 607 000 | 139 607 000 |
| Market capitalisation ZAR | 57 238 870 000 | 47 466 380 000 |
| Sacco shares | 32 430 490 | 32 430 490 |
| Sacco worth | 13 296 500 900 | 11 026 366 600 |
| Difference | 2 270 134 300 | |
| Dividend paid (2.5 ZAR on 11 March) | 81 076 225.00 | |
| Source: ProfileMedia |
Sipho Nkosi, CEO, Exxaro Resources
| 02-Jan-13 | 28-May-13 | |
| Exxaro share price | 170.5 | 141.05 |
| Total shares in issue | 357 900 000 | 357 900 000 |
| Market capitalisation ZAR | 61 021 950 000 | 50 481 795 000 |
| Nkosi shares | 9 890 207 | 9 890 207 |
| Nkosi worth | 1 686 280 294 | 1 395 013 697 |
| Difference | 291 266 596 | |
| Dividend paid (1.5 ZAR on 15 April) to Nkosi | 14 835 310.50 | |
| Source: ProfileMedia |
There were other losses suffered by mining bosses. Brian Gilberton, who has a 3.2% stake in Pallinghurst Resources, saw value worth R6.4m fly off his stake in the company, while Christo Wiese, who joined Gilbertson has a shareholder in the company recently, was R38m down so far this year representing his 19.2% stake in the firm.
Pallinghurst Resources has been hit by regulatory changes in Zambia which has affected the earnings of its Gemfields investment while Platmin, as with almost every other platinum stock in South Africa, has been negatively affected by sluggish platinum group metal prices.
The effect of weak mineral prices on the wealth of the likes of Cyril Ramaphosa is harder to calculate as Shanduka Group is unlisted, although its investments are public.
One such investment is Royal Bafokeng Platinum (RBPlats) in which Ramaphosa has a minor stake. Luckily for him, the R1.77bn decline in the market value of RBPlats translates into a mere R12.7m loss for Ramaphosa. So no harm done.
