Empire building stays in the family
May 16, 2004
By Sherilee Bridge
All great empires are built on the visions of our forefathers.
Patrice Motsepe and Bridgette Radebe [formerly Motsepe] remember their childhood differently.
Patrice, inspired by his parents' dedication to stimulating black business in a white-run South Africa, sketches an image of a young boy setting up a lemonade stand to sell wares to his neighbours.
Bridgette paints a far more romantic picture, that of a maiden standing alongside her father as he led the Bakgatla-Ba-Mmakau tribe in protests to force a foreign company mining on tribal land at Garangkuwa, north of Pretoria, to pay royalties
Today the two stand out in any crowd, mining magnates in their own right ... |
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But it is not just memories that tie this brother and sister's fate together, it is the manner in which they have distinguished themselves in the mining industry - once the bastion of large corporates representing the cream of the country's white wealth.
Today the two stand out in any crowd, mining magnates in their own right, their sophistication and grace bringing an air of grandeur to the otherwise down-and-dirty open-necked shirt approach of the present generation of mining bosses.
What's more, this new mining dynasty has been among the most active deal makers in the sector over the past five years of the industry's transformation.
On the list of South Africa's 500 ultra-rich, both brother and sister have made their fortunes from mining - and not just from deals initiated as a result of the government's insistence on a mining charter
Bridgette acknowledges that she learned the ropes the hard way ... |
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The charter dictates that mining companies, which have to reapply for their mining licences, transfer 15 percent of their assets to black investors within five years and 26 percent within 10 years.
Before the Minerals and Petroleum Resources Development Act was promulgated this month, both members of the Motsepe family had bagged deals with the world's largest platinum producers and Patrice had listed, merged, acquired and merged again to form what is now the country's largest black-controlled resources group.
In July two years ago, Bridgette's company Mmakau Mining formed a joint venture with Impala Platinum (Implats) to mine the Winnaarshoek platinum project.
The R1.5 billion development has resulted in a 175 000-ounce-a-year platinum producer named Marula Platinum.
Implats, the world's second-largest platinum producer, said in its 2003 annual report that extensive interaction with local and provincial authorities had led to an agreement to allocate 10 percent of the project to the surrounding community.
With dreams of pursuing a law degree, Bridgette ended up with a bachelors degree in political science from the University of Botswana before working at British Petroleum in the early 1980s.
She left the firm to help launch the National Soccer League's public affairs department and broke out on her own in 1998 when she bought a 20 percent stake in a contract mining firm run by two Afrikaners.
Setting up Mmakau in 1989, she is the only woman to head a deep-level hard rock mining company and the first black woman in the country to become involved in the production and executive management of gold, platinum and diamond mines.
Mmakau has a 33 percent interest in SRDM Contract Mining and SMT Mining Timber and said it was in talks with Cluff Mining about the development of one of its platinum prospects.
But Bridgette acknowledges that she learned the ropes the hard way.
Mmakau was part of the Nabera consortium, which beat off stiff competition from the likes of De Beers, Namco, and Trans Hex for a two-year management contract of state diamond mining company Alexkor.
But the deal turned sour and Nabera's contract was not renewed.
A social butterfly, and the wife of newly instated transport minister Jeff Radebe, Bridgette has been publicly acknowledged for her pioneering efforts on behalf of previously disadvantaged communities, particularly in the mining industry.
She chairs the SA Minerals Development Association, the Chamber of Mines equivalent for small and junior miners that played a vital role in the industry's negotiations with the government over the content of the empowerment charter.
Late last year, Mmakau acquired a 25 percent stake in mining contractor Shaft Sinkers in a R32.5 million transaction.
Bridgette has also been holding talks with Total's South Africa's coal unit and, just last month, she was named a new non-executive of the pulp and paper group, Sappi.
Controversy shy, Patrice, on the other hand, is one of country's three known black billionaires. He is said to be worth R1.5 billion, which he made from the listing of ARMgold, the first black-owned gold company to list on the JSE Securities Exchange.
That excludes his other assets and holdings.
He is chairman of the counties biggest black-owned resources group, ARM, which is the holding company born out of the amalgamation of Anglovaal Mining (Avmin), Harmony Gold Mining and ARMgold.
The company has an estimated market value of about R7.7 billion with interests in 26 mines and projects across the platinum, copper, nickel and gold industries.
An avid soccer supporter, he also has an investment in Sundowns and helps fund emerging soccer stars from underprivileged areas.
Patrice insists that he was never given any special favours. "Our office was my briefcase," he is fond of saying.
He was involved in mining from the start, studying minerals law at Wits University, where he completed his LLB degree.
A partner at Bowman Gilfillan Hayman Godfrey before starting his own business, Patrice first caught the market's attention when he paid AngloGold R40 million for seven loss-making shafts in 1998.
In as little as six months, he made a R30 million profit and attained a 39 percent productivity increase by applying small business principles to the operations.
That same year, Patrice bought another six more reject mine shafts and a gold plant.
He went on to form the FreeGold Joint Venture with Harmony. The rest is history.
Patrice's 50 percent stake in Angloplat's proposed R1.35 billion Maandagshoek platinum mine near Steelpoort in the Northern Province has been bundled into the new ARM group following the merger.
And his ambition of listing a separate platinum company has been carried with him to the chairman's desk. He and vice-chairman Rick Menell have also hinted that the nickel assets may be spun out into a new listing.
In terms of the merger agreement, African Rainbow Minerals & Exploration Investments (ARMI), a private firm incorporated in South Africa, is entitled to exercise about 63 percent of the voting rights in the new group despite holding just over 35 percent of its shares.
ARMI was cited as ARMgold's major shareholder in the company's listing prospectus. It was also said to be controlled by Motsepe family trusts, which held 55.8 percent of ARMI.
The Avmin circular to shareholders released in March just before the merger and the renaming of the group as ARM, made no reference to the shareholding of ARMI.
Assuming the trust still holds 50 percent of ARMI, it could be worth as much as R1.3 billion alone.
So while Patrice's personal fortune may be half of Tokyo Sexwale's R3.3 billion and the Motsepe dynasty may have a way to go to reach the big league wealth of the Oppenheimers, who are worth an estimated R30 billion, the sibling moguls are at least on the right track.
Besides, Patrice and Bridgette are related through marriage to Cyril Ramaphosa, who heads Millennium Consolidated Investments, which also has mining investments. Talk about keeping it in the family!
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