Lonmin has entered into binding agreements with the Bapo ba Mogale Traditional Community in relation to a series of transactions which will enable relevant Lonmin group companies to meet South African government requirements regarding Black Economic Empowerment targets.
The Lonmin directors believe from discussions with the South African Department of Mineral Resources, that the Bapo Transaction, will increase the BEE equity status of Lonplats by 2.4% from the waiver of the Bapo’s statutory royalty rights and the purchase of their interest in the Pandora JV and by a further 0.9% from the Bapo Trust transaction, increasing the BEE equity status of Lonplats by 3.3%.
Lonmin also intends to implement an Employee Share Ownership Plan (ESOP) and a Community Share Ownership Trust (CSOT) (for the benefit of the local communities on the western portion of our Marikana operations) which trusts will collectively hold the 4.7% balance of the additional 8% equity empowerment which EPL and WPL require to achieve the 26% effective BEE equity ownership target by 31 December 2014. At this stage, the Company expects that completion of all of these arrangements should be achieved in the final quarter of the 2014 calendar year.
“The Bapo is a stakeholder of great importance to Lonmin. The Board of Lonmin believes that the Bapo Transaction will help build a new and stronger relationship with the Bapo and will, together with the ESOP and CSOT, secure the BEE equity status of the Lonmin group of companies in South Africa,” the company said in a statement.
Kgosi Bob Mogale said: “I believe this agreement represents the most sustainable and fair way forward, and I hope that as well as bringing financial benefits to our people it helps to build stronger bonds between the Bapo and Lonmin.”
Brian Beamish, Chairman of Lonmin, said: “On behalf of the Board I would like to welcome the Bapo community as an important shareholder in our Company. We look forward to building a strong relationship with them over the years to come.”
Ben Magara, Chief Executive Officer of Lonmin, added: “It is Lonmin’s first priority to work in the interests of all our stakeholders. We are pleased to have reached an agreement as this is testimony to developing a constructive relationship with the Bapo ba Mogale.”