Mgojo seeks to win back Chamber’s moral high ground

Exxaro CEO, Mxolisi Mgojo and Minerals Council president. Pic: Martin Rhodes.

CHAMBER of Mines president, Mxolisi Mgojo, sought to reclaim the organisation’s moral high ground today telling delegates at the Joburg Indaba mining conference that it was committed to engagement in resolving the mining sector’s impasse with government.

“As the Chamber of Mines, we have drawn a fine line in the sand regarding unethical leadership, bad governance and state capture,” said Mgojo, referring to two legal processes the Chamber has in the High Court. “The Chamber remains committed to find a workable solution.

“Zweli Mkhize (ANC treasurer-general) stated earlier this week we were in dialogue with the ANC. We need to continue that because we need to be collectively engaged for better outcomes. Only by engaging and bargaining hard so there isn’t a winner takes all can we find solutions in a rational manner,” he said.

Mgojo’s speech could be interpreted as damage limitation after the Chamber decided not to attend the official curtain-raiser at the Joburg Indaba because mines minister Mosebenzi Zwane was delivering a speech. Notable absentees at the Joburg Indaba’s Gala dinner event on October 3 were Chamber CEO, Roger Baxter, and AngloGold Ashanti chairman Sipho Pityana who is also the leader of SaveSA, a vocal and proactive civil organisation campaigning for leadership change in the ANC.

Baxter was unrepentant saying that the Chamber was committed to legal ends in order to defeat a redraft of the Mining Charter which it said had been written without much consultation with the mining sector.

Said the Chamber in a separate statement e-mailed to Miningmx: “Roger Baxter does not speak in his own capacity. He is mandated by the office bearers, who are mandated by council. Please don’t confuse a difference in style with a difference in resolve”.

“We can’t reach a solution without eyeballing one another; we need to wrestle; it cannot be top-down,” said Mgojo. Mgojo is also the CEO of Exxaro Resources.



  1. To the CoM,

    Please demonstrate your transformation progress not by screaming and quoting figures out of thin air. Exxaro itself is a “front for BEE”. It is an embarrassment & shamfor a Chairman of CoM to claim transformation for which his members are strongly resisting.

    EXXARO A SHAM BEE SCHEME, sanctioned & supported by the CoM ( so hypocritical !) :

    In 2006, here is the details of the fabled major Black-owned company created by Anglo. Anglo owned 65% of a Listed co called Kumba Resources , later to be named Exxaro. Here is the story with this elaborate fronting details ( akin to Trillian & Mckinsey scheme) :

    Ownership of Kumba Resources , prior to the BEE fronting scheme = ASAC (±65%) ; IDC (±10%) ; Minorities ( white institutions) ( 25%). IDC stake was inherited from ISCOR financial support packages over the years.

    THEN ASAC ( ANGLO SOUTH AFRICA CAPITAL ( ANGLO)), wanted Sishen Mine badly due to FeOre price prospects, so it concocted a scheme to unbundle SIOC ( and expropriate it to itself) , whilst also disposing its unwanted & marginal assets , without sacrificing value whilst also masquerading as a BEE-controlled enterprise. Furthermore, it wanted Mining Rights for the SIOC to be secured.

    THEN ENTER THE RENTSEEKING ELITES ( LIKE the current chairman of CoM etc) :

    BEE HOLDCO : A BEE Vehicle was created called BEE HOLDCO ( MS 333). Its ownership was EYESIZWE SPV (±54%) ; TISO/EYABANTU(20%) ; IDC ( 15%) ; BEE Women (11%). This vehicle also issued pref shares to ASAC & IDC which resulted with all the dividends to be received for 10yrs being paid to ASAC & IDC. So all the benefits of Exxaro shares ownership flowed to the financiers , which are the rightful owners, NOT the BEE parties. Hence the participants to this scheme are not flying with private jets & owning vineyards. So in total dividends of R6,4bn , for the period of 10yrs received from Exxaro, went as Pref Shares Dividends to ASAC & IDC. The share Capital gains were accumulated as debt , hence the need to replace the BEE structure because it has collapsed without any meaningful benefit except for a few millions paid to its chief participants ( Mgojo , Nkosi etc). As of FY16, this structure owed EXXARO R3,525Bn, despite its supposed ownership of 52% of Exxaro. That would have had a market value of R14,4Bn….
    By end FY16, EXXARO owned ±80% of the BEE HOLDCO. So it needed its Minorities ( white institutions) permission to repurchase its shares through that scheme. By now , post ASAC having sold-off and ceded rights to EXXARO, the minority shareholders now held 75% of its issued shares (refer to its announcement on the 30 December 2016). The approval was to swamp its debt for its own shares in MS333 for R3,525Bn, which is what its was owed. BUT there was a complication in that the structure held ± 91M Exxaro shares, which it owned 73,2M of its own shares. Therefore , the structure had collapsed as a BEE vehicle thus posing serious legal ramifications with its chief client ESKOM. EXXARO needs ESKOM badly to continue with its rent-seeking activities , which amounts to State capture!


    Given the above said, there is a need to concoct another BEE-fronting-scheme. This time , around ASAC is not around to help so EXXARO needs to go at it alone. The cost of this going alone will be kept at a minimum. Hence the shareholders’ agreement of the NEWBEECo is still outstanding despite it having signed an agreement with EXXARO already. Why ? Well they are still looking for BEE parties to participate but yet the rules are already cast. They will not sell for 10 yrs, thus going to miss the next commodity bull cycle. Furthermore, should the share price be 1,5x price paid , they will sell back to EXXARO at a predetermined price. Why? to ensure that the routing continues and they get paid a BEE stipent ( of a few millions NOT billions). BUT EXXARO WILL CONTINUE TO MODEL ITSELF AS A BEE owned and controlled co. But the facade has worn-off , thanks to ASAC departure.

    NEWBEEco : AS proclaimed that it will own 30% of EXXARO , that is almost R12bn of value. Well lets analyse it. Its proposed shareholding is as follows BEE SPV ( 51%) ; IDC (±24%) ; EXXARO (25%)

    BEE SPV : Its shareholding is Re-Invest-MS333 ( 60%) & EXXARO (40%). From above, remember the 73,2M shares? Well , which now post-buy-back in Dec FY16 are now ± 27M. You guest right because these are the same number of shares that the Re-Invest-MS333 will be contributing to BEE SPV. Which are EXXARO-owned for all intents and purposes, but require men-of-straw ( Mgojo’s etc ) to sanctify them as BEE shares.

    Given the heat sum of R12Bn, there is a need for someone to put in some R2,7Bn to complete the scheme. This is so because EXXARO is putting in R2,1Bn in BEE SPV, EXXARO equity=±R2,5Bn , IDC = R1,54Bn and Re-Invest-MS333 = R2,84Bn , thus total = ±R8,98Bn with shortfall = ±R2,7Bn. Somebody must fund the shortfall or else there will be value transfer from Exxaro shareholders to stand-up the scheme. Hence , there is a search for 3rd party funding ( of ±R2,7Bn ) including the possibility of floating the NEWBEECo or banks joining the party, obviously with Pref shares involved to ensure that dividends do not flow to unintended parties ( BEE chaps !).


    EXXARO IS A FRONTING BEE co. Due to its reliance of ESKOM to fund its mines , it is no different than Oakbay or Trillian. So with due respect chairman of CoM, the ethics suit you trying-on DOES NOT fit !!!
    CoM must clean its house first , including ensuring that their members practise its preaching before lecturing RSA blacks !

    • I am chilled,
      But hypocrisy can never be ignored NOT from the fossilised & outmoded CoM and its BEE cronies!

      At best, Exxaro is 15% BEE-owned, including the IDC shareholding which is debatable!

      Yet they get coal contracts from the likes of ESKOM & MR etc under such false pretences, which amounts to fraud.

      Do the sums and you’ll arrive at the same conclusions!

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