Petmin today announced a R350 million broad-based black economic empowerment (BBBEE) deal which sees a 20% stake in its Somkhele anthracite mine being acquired by its employees and the local community.
JSE-listed Petmin’s shareholding in Tendele Coal Mining, the owner of the R1.6 billion Somkhele anthracite mine in KwaZulu-Natal, will be reduced to 80%.
To do this, the company will help the local community and Tendele employees to become shareholders in Tendele. Community and employee trusts will be formed, and they will own 20% of Tendele, initially through a Special Purpose Vehicle (SPV) and subsequently through direct share ownership in Tendele.
Tendele Coal Mining is the owner of the Somkhele anthracite mine in KwaZulu-Natal, with annual production of approximately 1.2 Mt of anthracite and 350 000 t of energy coal from rewashed discard. Tendele is currently 100% owned by Petmin.
“From inception it has been Petmin’s strategic intention to embrace the spirit of BBBEE for the mining industry, as determined in the MPRDA,” says Petmin chief executive Jan du Preez. “Petmin believes that to ensure long-term sustainable empowerment it is imperative that local communities and employees become owners so they can participate and share in the economic benefit of our operations, and beyond the life of our operations.”
The BBBEE deal was negotiated with the Traditional Council (established in terms of traditional law), representing the 175 000 strong Mpukunyoni Community and with trade unions representing Tendele employees.
Preference shares in the SPV will be issued in exchange for R270 million from a Nedbank subsidiary, and R80 million from Petmin, totalling R350 million. The funds will be used to subscribe for the 20% shareholding in Tendele. The SPV shares will be allocated 80% to the Community Trust and 20% to the Tendele Economic Benefits Sharing (EBS) Scheme for employees.
“Tendele Coal Mining’s BBBEE deal is a significant transaction for the sustainability of the Somkhele anthracite mine, its employees and surrounding communities,” says Greg Webber, Head of Mining Finance – South Africa, at Nedbank’s corporate and investment bank. “We are proud to have financed the transaction and hope that it marks the beginning of a long and successful relationship with the Petmin group.”