| Fri 30 Nov 2001, 0:00 | | Kumba/ Tiso - Kumba And Tiso Tium Conclude Anchor |
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Kumba Resources Limited TisoCapital (Proprietary) Limited
(Incorporated in the Republic of (Incorporated in the Republic of
South Africa) South Africa)
Share code: KMB ISIN : ZAE 4034310 (Registration number 1999/010875/07)
(Registration number 2000/011076/06) ("Tiso")
("Kumba")
Kumba and Tiso tium conclude Anchor Empowerment Agreement
Introduction
The Boards of Directors of Kumba and Tiso are pleased to announce the
signature of an Anchor Empowerment Agreement between Kumba and the Tiso
Consortium, a broad based empowerment grouping led by Tiso, and comprising
Kagiso Trust Investment Company (Proprietary) Limited ("Kagiso"), Nozala
Investments (Proprietary) Limited ("Nozala"), and the Northern Cape Mining
Partnership ("NCMP"). The latter group represents the interests of the
Government-identified Rural Poverty Node, empowerment and women's groups in
the Northern Cape.
Kumba views black economic empowerment ("BEE") as a fundamental pre-
requisite for the long-term development and stability of the South African
economy. A distinguishing feature of Kumba's business strategy is its
commitment to meaningful and sustainable BEE initiatives in all aspects of
its business. The conclusion of the Anchor Empowerment Agreement with Tiso
Consortium marks an important milestone in achieving Kumba's objective of
establishing itself as a committed, efficient and independent South African-
based, and globally competitive, mining company.
The Anchor Empowerment Agreement establishes the Tiso Consortium as Kumba's
preferred long term strategic empowerment partner. The participation of the
Northern Cape Rural Poverty Node in the Tiso Consortium represents another
important step in the development of a closer and mutually beneficial
relationship between Kumba and the communities in which it operates.
Salient terms of the transaction
In terms of the Anchor Empowerment Agreement:
- the Tiso Consortium will participate in a number of potential projects
identified by the parties as presenting opportunities for the Tiso
Consortium to acquire a meaningful equity interest in Kumba. These potential
projects would include participation in the Sishen South iron ore project
which has the potential to be developed into a mine with a capacity of 10
million tonnes per annum;
- as an initial basis for establishing the Tiso Consortium as Kumba's
preferred long-term strategic empowerment partner, Kumba has granted it the
right to subscribe, before 31 March 2002, for new shares in Kumba equivalent
to 5% of Kumba's current issued share capital. The Kumba shares will be
issued in accordance with the requirements of the JSE Securities Exchange
South Africa ("JSE"). Based on the closing price of Kumba shares on the JSE
on 26th November 2001, these shares would be worth approximately R400
million;
- the Tiso Consortium has agreed to work exclusively with Kumba in key areas
of Kumba's business activities.
Kumba - The Business
Kumba was listed on the JSE on the 26th November 2001 with a debut market
capitalisation of approximately R8 billion.
Kumba's operations and subsidiaries have been in the mining business for
more than 70 years. Kumba is now positioned as one of South Africa's
leading diversified mining houses, and a global leader in the areas of iron
ore mining and heavy minerals.
Kumba comprises four strategic business units ("SBUs"):
- Iron ore
The iron ore SBU operates two iron ore mines. In the financial year ended
2001, the Sishen and Thabazimbi mines produced 27 million tonnes of iron
ore, contributing R3,3 billion to Kumba's revenue. Kumba also owns
significant iron ore deposits in Sishen South (Northern Cape) and Hope Downs
(Western Australia), which when developed will position Kumba as one of the
world's largest iron ore producers.
- Heavy Minerals
The heavy minerals SBU centres around a mining and smelting project in South
Africa and a 46,5% interest in Ticor Limited, a major Australian Stock
Exchange listed producer of titanium dioxide, feedstock and pigment.
- Base Metals
The Zinc electrolytic zinc refinery at Springs and the Rosh Pinah Zinc/Lead
mine in Southern Namibia constitute the core of the base metals SBU. In the
2001 financial year the base metals SBU generated total revenues of R945
million.
- Coal
The coal SBU currently operates three collieries, Grootegeluk, Leeuwpan and
Tshikondeni. In the 2001 financial year these collieries produced 16,8
million tonnes of coal for the domestic and export market with a combined
revenue of R1,2 billion.
The Tiso Consortium
The Tiso Consortium comprises the following:
- Tiso - Tiso is an entrepreneurial, skills-based empowerment investment
company with a strategic interest in natural resources formed by Fani Titi,
Nkululeko Sowazi and David Adomakoh. Through its Foundation, Tiso seeks to
contribute towards the development of skills and leadership;
- Kagiso - Kagiso, under the chairmanship of Eric Molobi, is one of South
Africa's oldest and premier empowerment groups with an investment banking
focus. Kagiso's majority shareholder is the Kagiso Trust, one of South
Africa's largest community development organisations, with over R1 billion
distributed into community development initiatives;.
- Nozala - Nozala, is a black women's investment company led by Lorato
Phalatse and Salukazi Dakile-Hlongwane with a mission to actively promote
the economic advancement of women, and draw rural and urban women into the
wealth creation process. Nozala has an audited national membership of over
400 000 women;
- NCMP - represents a consortium of Northern Cape interests comprising:
- a mining focused BEE company based in Kimberley, to be named New
National Minerals Mining (Proprietary) Limited;
- Northern Cape Rural Poverty Node Charitable Trust, which will focus on
the development of critical projects identified by its trustees in a rural
poverty node that spans areas in the Northern Cape and the North West
provinces;
- The Northern Cape Chapter of the Rural Women's Movement, a non-profit
organisation focused on the development of rural women;
- Two companies representing a broad-base of local women and empowerment
interests in the Northern Cape.
Pretoria
30 November 2001
Financial adviser and sponsor to Kumba: JP Morgan Chase Bank
Corporate law advisers and consultants to Kumba:
Edward Nathan & Friedland (Proprietary) Limited
Financial adviser to Tiso Consortium:
TisoCapital (Proprietary) Limited
Corporate law advisers and consultants to Tiso Consortium: Moss Morris
(Proprietary) Limited
