| Mon 11 May 2009, 15:02 | | PAM - Palabora Mining Company Limited - Press Release |
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PAM
PAM
PAM - Palabora Mining Company Limited - Press Release
Palabora Mining Company Limited
(Incorporated in the Republic of South Africa)
Registration number 1956/002134/06
JSE Code: PAM & ISIN: ZAE000005245
Press release
Palabora signed a 26 Percent Equity Transaction Framework Agreement for its
Broad Based Black Economic Empowerment transaction
May 11, 2009
On 30 April, 2009 Palabora Mining Company Limited ("Palabora") signed and
submitted a Transaction Framework Agreement ("TFA") bearing the signatures
of its Broad Based Black Economic Empowerment ("BBBEE") partners to the
Department of Minerals and Energy ("DME") in Polokwane. Under its BBBEE
transaction ("the transaction)", Palabora will sell 26 percent of its
operations to a broad based BEE group comprising of employees, the community
and key individuals. A significant feature of the transaction is its focus
on community development.
Culminating a key-stakeholder consultation process that Palabora has
undertaken since 2007, it signed the TFA with the 5 tribes of the Ba-
Phalaborwa community. A community trust to be held for the benefit of
Makhushane, Selwane, Maseke, Mashishimale, and Majeje tribes will acquire 10
percent of the equity in a newly formed, special purpose subsidiary of
Palabora, which subsidiary will acquire all or an appropriate part of
Palabora`s business under the transaction. The host communities will not be
required to contribute upfront equity for their stake in the subsidiary of
Palabora as the transaction is being vendor-financed by Palabora.
Matt Gili, Managing Director of Palabora said: "We are delighted that this
long and thorough process is closer to completion and that further benefits
will flow to the communities from completion of the transaction. In addition
to this, Palabora will continue to be a major contributor to the Phalaborwa
economy. Palabora paid R235 million in corporate tax during 2008 and spent
R2.6 billion with suppliers of which R1.1 billion was with BBBEE companies.
Approximately R964 million of the Company`s supplier spend was in the Ba-
Phalaborwa area; with R679 million going to BEE enterprises. Palabora will
continue its Corporate Social Responsibility programmes through the Palabora
Foundation to assist local communities within a 50 km radius of Phalaborwa
to become self reliant through sustainable development programmes. The
Palabora Foundation has a budget of R35.9 million for this year, of which 65
percent will be spent on education programmes to benefit the local
community".
It is intended that the transaction will result in an enduring and
sustainable BBBEE transaction and ensure that Palabora and accordingly the
business, immediately comply with all the equity ownership of the mining
charter thereby fulfilling the 26 percent target set for 2014 and exceeding
the 15 percent target set for 2009.
All Palabora`s approximately 2 200 permanent employees, 70% of whom are
Historically Disadvantaged South Africans ("HDSA") and of whom 8 percent are
women, and 44 percent are HDSA`s in senior management, will participate in
the Employee Share Participation Trust ("ESPT"). All Palabora employees will
participate in the ESPT at equal level regardless of race or seniority. The
ESPT will acquire a 10 percent equity interest in the subsidiary of
Palabora.
The key business individuals consortium led by George Negota, erstwhile
chair of the Palabora Mining Company board for years, will acquire 6 percent
equity of the new subsidiary. George has been a director at Palabora since
1998 and in 2007 was appointed as chair. It is envisaged that the key
business individuals will spearhead business development and job creation in
the Ba-Phalaborwa area.
Speaking of the transaction, Charles Asubonten, Chief Financial Officer, of
Palabora commented as follows: "While this transaction has been a real
balancing act, Palabora seeks to implement a transaction meeting both the
letter and the spirit of the Mining Charter. We`ll continue to optimize
value for our existing and in-coming shareholders at both the listed company
and operating subsidiary levels."
Palabora, listed on the JSE Limited, is a member of the Rio Tinto Group of
Companies, It is owned 58 percent by Rio Tinto, 17percent by Anglo-American,
and 25 percent by others, Situated in the Ba-Phalaborwa area of Limpopo,
Palabora operates a large block cave copper mine and a smelter complex.
Palabora has a planned mine life for the copper business of 8 years, with
plans for further expansion. When including the magnetite and vermiculite
businesses, the combined life of mine is more than 30 years. In 2008 the
mine continued to produce above 32,000 tonnes per day and produced 1/3 of
the world`s vermiculite. The mine is probably now the most productive single
shaft mine in the world and provides South Africa with 85 percent of its
copper requirements and has achieved significant technical success with the
underground expansion now operating at 10% above design capacity.
For more information on Rio Tinto please go to www.riotinto.com
For more information on Palabora Mining Company and The Palabora Foundation
- please go to www.palabora.co.za
-ends.
For further information, please contact:
Bongeka Lwana
Adviser: Media Relations and Communications Africa
Rio Tinto
Office: +27 (0) 911 9831
Mobile +27 (0) 71 680 8920
Jean Chawapiwa-Pama
Vice President External Relations Africa
Rio Tinto
Office: +27 (0) 11 911 9922
Mobile: +27 (0) 83 660 6586
Nick Cobban
Principal Advisor
Media Relations, London
Rio Tinto
Office: +44 (0) 20 7781 1138
Mobile: +44 (0) 7920 041 003
Keith Mathole
Company Secretary
Palabora Mining Company
Office: +27 (0)15 780 2021
Mobile: +27(0) 82 903 8321
Sponsor
Barnard Jacobs Mellet Corporate Finance (Proprietary) Limited
Date: 11/05/2009 15:02:01 Produced by the JSE SENS Department.
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