RIO Tinto Group’s South African operation is facing the loss of a large bloc of Black investors, a move that would leave it below the legal minimum for Black ownership, said Bloomberg News citing two people familiar with the situation said.
The main investors in Blue Horison Investments Ltd., which holds 24% of Rio-controlled titanium producer, Richards Bay Minerals, have told Rio they want to be permitted to sell a stake they value at R5.5bn ($393m) or have it bought out by RBM, the people said.
The Black investors are frustrated by the suspension of dividends, partly due to disruptions caused by the coronavirus pandemic, and community opposition that stymied expansion plans, said the newswire.
By law, mining assets in the country, at the time when the deal was concluded, must be at least 26% Black-owned. RBM is also 2% owned by Black employees.
“It remains the company’s desire to have a strong and supportive shareholder base for RBM and a structure that ensures ongoing compliance with applicable Black economic empowerment legislation,” Rio said in a response to queries, declining to comment further on the dispute.