| Thu 8 Feb 2007, 7:00 | | AGL - Anglo American plc - Anglo American`s commit |
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AGL
ANAAL
AGL - Anglo American plc - Anglo American`s commitment to transformation
Anglo American plc
Incorporated in the United Kingdom
Registration number: 3564138
Share Code: AGL
ISIN: GB0004901517
("Anglo American" or "the Company")
Anglo Operations Limited
Incorporated in the Republic of South Africa
Registration number: 1921/006730/06
("AOL")
Anglo South Africa Capital (Proprietary) Limited
Incorporated in the Republic of South Africa
Registration number 1999/002391/07
("ASAC")
Anglo Coal Division ("Anglo Coal")
A division of AOL and a wholly-owned subsidiary
of Anglo American
Anglo Inyosi Coal
- Another Anglo American contribution
- A R7 Billion Black Empowered Coal Company
Highlights
* Exciting asset mix with strong growth potential
* Formidable 4.1 billion tonne coal resource base
* Significant contributor to Anglo Coal`s future South African production base
* Well positioned for growth
* 27% black empowered equity participation from inception
* Dynamic consortium partner grouping
* Breadth of women and broad-based participation
* Immediate R5 million per annum cash allocation to broad-based groupings
* Commitment to employee participation
* Creates in excess of 2,500 jobs
* Embraces the spirit of the Mining Charter
* Addresses the 2009 and 2014 Mining Charter equity ownership requirements
1. Anglo American`s commitment to transformation
Anglo American has been a pioneer in black empowerment in South Africa for two
decades. As the largest private sector investor in the country, Anglo American
has committed itself to sustainable economic empowerment and considers
transformation a strategic imperative. The creation of Anglo Inyosi Coal
(Proprietary) Limited ("Anglo Inyosi Coal") is a further step in Anglo
American`s commitment to empower all its South African operations
and its continuing contribution to transformation.
2. The transaction
Anglo Coal, Ndonsa Mining (Proprietary) Limited (the "Lithemba Consortium"),
Pamodzi Coal (Proprietary) Limited ("Pamodzi Coal") and WDB Investment
Holdings (Proprietary) Limited ("WDBIH") (collectively "the Parties") are
pleased to announce that they have signed a Heads of Agreement ("HoA")
relating to the creation of Anglo Inyosi Coal. Valued at R7 billion, Anglo
Inyosi Coal will incorporate selected key Anglo Coal projects and Kriel
Colliery, a key existing operation. A new company ("Inyosi") incorporated
specifically to acquire an interest in Anglo Inyosi Coal will subscribe for
a 27% shareholding (the "Transaction").
Inyosi is a broad-based BEE company with a beneficiary base of over 200,000,
the vast majority of whom live in Mpumalanga.
In terms of the HoA, the shareholders in Inyosi will be:
- Lithemba Consortium, led by Lithemba Amalahle Mining (Proprietary) Limited
("Lithemba Amalahle Mining") and Initiative SA Resources (Proprietary) Limited
("ISA"), includes the following women`s groupings in its consortium: Zingisa
Holdings (Proprietary) Limited ("Zingisa"), Lindane Investments (Proprietary)
Limited ("Lindane"), Abongi Bemvelo Environmental Management Services CC
("ABEMS"), Waphila Workplace Solutions ("WWS"), Women in Oil and Energy of
South Africa Inc. ("WOESA"), and Girl Guides of South Africa Youth ("Girl
Guides"). Key individuals include Yoliswa Balfour and Sibongile Modise;
- Pamodzi Coal, led by Pamodzi Investment Holdings (Proprietary) Limited
("PIH"), includes the following groupings in its consortium: imPafa Coal
(Proprietary) Limited ("imPafa Coal"), Rorisang Basadi Investment Holdings
(Proprietary) Limited ("Rorisang"), Takalani Home for the Mentally Disabled
("Takalani"), Soweto Business Executive Council ("Soweto Business Executive
Council"), Pamodzi Coal staff, Mzana Women`s Investment Club CC ("Mzana
Women`s Investment Club"), Umnotho Wamalahle (Proprietary) Limited
("Umnotho") and MMRT Investments (Proprietary) Limited ("MMRT"), the latter
being 100% women-owned.
Key individuals include Ndaba Ntsele and Hartley Dikgale;
- WDBIH, a broad-based women`s empowerment group, which is 100% owned by the
WDB Trust, a charitable trust set up to operate development programmes aimed
at poor rural women in Mpumalanga and Limpopo. WDBIH has a track record of
ensuring regular distributions to its constituency; and
- a Community Trust for the benefit of communities in the vicinity of Anglo
Inyosi Coal`s operations.
3. Anglo Coal`s transformation initiatives
Anglo Coal embraces the principles of transformation as a strategic imperative
to reinforce its position as a leading coal producer in South Africa. In this
regard, Anglo Coal has already played a major role in black empowerment in the
coal sector through the creation of significant Historically Disadvantaged
South African ("HDSA")-controlled and managed coal companies:
Entity 2005 Anglo Coal
attributable production
Eyesizwe Coal (Proprietary) Limited 12.09mt
Leeuw Mining (Proprietary) Limited
Mafube Colliery (Proprietary) Limited 2.56mt
Eastside Coal Company (Proprietary) Limited
Imbani Coal (Proprietary) Limited
All Africa Coal (Proprietary) Limited
Total HDSA-controlled production 14.65mt
As a further demonstration of its ongoing commitment to transformation, in
2001 Anglo Coal waived its participation rights in the Richards Bay Coal
Terminal ("RBCT") Phase V expansion in order to facilitate HDSA
participation.
Anglo Coal has also made significant progress in addressing the requirements
of key pillars of transformation as detailed in the Mining Charter. As well
as
creating a better workplace for all, 32% of management are HDSAs, 12.5% are
women in mining and 6.6% are women in technical roles.
The Transaction is therefore a culmination of the second wave of empowerment
by Anglo Coal.
4. Strategic rationale
4.1 Anglo Coal`s objectives
Anglo Coal is committed to achieving effective and sustainable black economic
empowerment of its mining assets through the Transaction. The Transaction has
also been designed to secure Anglo Coal`s future growth and to deliver on
Anglo American`s continuing commitment to South Africa.
To support this transformation imperative, Anglo Coal selected the Lithemba
Consortium and Pamodzi Coal as its anchor empowerment partners. To further
strengthen the partnership between the Parties, the Lithemba Consortium,
Pamodzi Coal and WDBIH will be involved in Anglo Inyosi Coal`s ongoing
transformation processes and business management.
Anglo Coal`s key objectives are to:
- demonstrate its ongoing commitment to transformation by effecting a
transaction which meets the spirit of the Mineral and Petroleum Resources
Development Act ("MPRDA") and the Mining Charter on a sustainable basis;
- establish a leading empowered coal producer that is economically and
socially viable and sustainable;
- harness the domestic and export growth opportunities, whilst meeting the
aspirations of its shareholders; and
- ensure that the benefits arising from the Transaction will accrue to a broad
base of beneficiaries comprising Anglo Inyosi Coal`s business partners;
communities in areas in which Anglo Inyosi Coal operates, namely the Kriel
Colliery, Elders, Zondagsfontein, New Largo and Heidelberg and other
designated beneficiaries, including poverty nodes in South Africa.
4.2 Inyosi`s objectives
The shareholders of Inyosi fully subscribe to and have embraced the
foundations of broad-based empowerment and embrace the participation of
women in the mining industry. More specifically, Inyosi brings:
- strong women participation and leadership;
- technical expertise and strategic partnership;
- experience and a solid transformation track record; and
- broad-based beneficiary and community management skills.
5. Ownership of Anglo Inyosi Coal
Anglo American`s 73% interest in Anglo Inyosi Coal will be held through ASAC.
The remaining South African coal operations will be retained within AOL.
Inyosi will own the remaining 27% of Anglo Inyosi Coal.
The ownership structure of Anglo Inyosi Coal will therefore be:
See press announcement for organogram
6. Assets acquired by Anglo Inyosi Coal
Anglo Inyosi Coal will acquire several key Anglo Coal projects, comprising
Elders, Zondagsfontein, New Largo and Heidelberg and an existing operation,
Kriel Colliery (collectively "Anglo Inyosi Coal Assets"). The Department of
Minerals and Energy ("DME") has already approved all of Anglo Inyosi Coal`s
prospecting rights.
Whilst the Anglo Inyosi Coal assets are expected to produce coal principally
for the domestic market, there will also be a sizeable 3.5mt per annum export
component. An application for export entitlement through RBCT has already been
submitted.
Overview of Anglo Inyosi Coal Assets
Estimated annual
Nature of Resource base production
operation mt mt
Kriel Colliery Existing 181 10.5
New Largo Project 875 17
Elders Project 376 10
Zondagsfontein Project 268 6
Heidelberg Project 191 5
Total 1,891 48.5
When combined with an estimated additional resource base of approximately 2.2
billion tonnes, Anglo Inyosi Coal is expected to have a formidable 4.1 billion
tonne total resource base.
7. Economic and social sustainability
To ensure a sustainable mining business, the following have been agreed:
- Anglo Inyosi Coal will acquire the Anglo Inyosi Coal Assets for R7 billion,
funded via:
- an equity contribution of R25 million from Inyosi and R68 million from
ASAC;
and
- vendor financing, with ASAC subscribing for preference shares in Anglo
Inyosi Coal to the value of approximately R6.9 billion;
- finance for the development of the project assets will be provided by the
Anglo American group;
- an annual amount of R5 million will be distributed to the broad-based
beneficiaries within Inyosi to enable the immediate initiation of social
and economic upliftment projects; and
- an annual distribution of R1.5 million to Inyosi to cover ongoing
administration costs.
8. Employee Share Ownership Programme ("ESOP")
As a separate and independent transaction, Anglo American and Anglo Coal are
committed to the creation and implementation of an ESOP, details of which are
to be finalised in consultation with employees in due course.
The consideration for the ESOP will be fully vendor financed by Anglo
American.
9. Overview of Inyosi participants
The shareholders of Inyosi are:
See press announcement for organogram
There is a strong emphasis on broad-based empowerment in Inyosi. The
beneficiary base of over 200,000 individuals is drawn from, amongst others,
communities around Anglo Inyosi Coal`s operations, targeted poverty nodes in
Mpumalanga, WDBIH, WOESA, the Girl Guides, Takalani and the Soweto Business
Executive Council.
9.1 The Lithemba Consortium
33% of Inyosi will be owned by the Lithemba Consortium, whose key objective is
to ensure the empowerment of women within the resources and energy sectors.
The Lithemba Consortium comprises the following groupings:
See press announcement for organogram
Lead partners in the Lithemba Consortium:
- Lithemba Amalahle Mining
Lithemba Amalahle Mining is wholly-owned and controlled by women, the majority
of which are business people and professionals. The company aims to invest in
business opportunities in the mining sector through equity and operational
participation to ensure the growth and empowerment of women.
- Initiative SA Resources
Initiative SA Resources is owned and managed by black professional women, and
was formed to pursue opportunities in the mining sector.
Key broad-based groupings include:
- WOESA
Officially launched in 2002, WOESA is a Section 21 company whose aim is to
facilitate and promote business opportunities for South African women in the
oil and energy sector. It is a national organisation with regional
representatives in all nine provinces and a board consisting entirely of
women, all of whom are well respected professionals and business leaders.
WOESA is actively involved in training and increasing industry awareness
amongst women.
- Girl Guides of South Africa Youth
A broad-based, national organisation that is instrumental in the development
of the country`s future women leaders through its mentorship programmes for
girls and young women. The organisation has approximately 30,000 members
across all provinces.
Key individuals include
- Yoliswa Balfour (Executive Chairperson, Lithemba Amalahle Mining)
Yoliswa is a seasoned entrepreneur under whose leadership, vision and belief
in social and women upliftment Lithemba Amalahle Mining was created.
Yoliswa is also a founder and board member of WOESA, a board member of
Amathole Economic Development Agency and Chevron South Africa, Chair of the
Chevron South Africa Human Resource Committee, and a director of World
Vision.
- Sibongile Modise (Managing Director, ISA)
Sibongile is a Chartered Accountant with extensive experience in finance.
Sibongile has also gained invaluable experience within the coal industry
through ISA`s contracts to provide transport logistic services to the mining
industry. She is a non-executive director of Le Carbone South Africa
(Proprietary) Limited.
9.2 The Pamodzi Coal consortium
33% of Inyosi will be owned by Pamodzi Coal, whose shareholders comprise:
See press announcement for organogram
Lead partner in Pamodzi Coal:
- Pamodzi Investment Holdings
PIH was founded in 1996 by a group of leading black professionals and
entrepreneurs to own leading and stable businesses in key South African
industries, whilst generating superior returns and empowering a broad range of
stakeholders. PIH has also positioned itself as the role model for business
excellence within the community.
Key broad-based groupings include:
- Takalani Home for the Mentally Disabled
Built by Anglo American in 1991, Soweto`s first home for the mentally disabled
currently houses close to 500 disabled children.
- Soweto Business Executive Council
Soweto-based Not-For-Profit organisation which assists businesses to establish
themselves in the mainstream economy. Currently there are 432 business
members, of which 324 are women.
Key individuals include:
- Ndaba Ntsele (Chairman, Pamodzi Coal)
As the co-founder and Chief Executive Officer of PIH, Ndaba has been an
entrepreneur since 1979. He has been involved in several commercial
initiatives including Chairing the World Bank Conference on Micro Economic
Strategy of the Sub-Saharan region, WesBank First Auto (Proprietary)
Limited, Foodcorp Holdings (Proprietary) Limited and various subsidiaries
of PIH. Ndaba is also a trustee of the Soweto Business Executive Council,
Education Africa (Deputy Chairperson) and the Pamodzi Social Trust.
- Hartley Dikgale (Director, PIH)
Hartley has served as legal advisor on corporate governance for Old Mutual
plc, Rand Water, Sanlam Limited and the Independent Communications
Authority of South Africa. Amongst others, Hartley is also a director of
the Cross Border Road Transport Agency (Deputy Chairperson), Kulungile
Metals Group
(Proprietary) Limited, Foodcorp Holdings (Proprietary) Limited and Altech Data
(Proprietary) Limited.
9.3 WDB Investment Holdings
19% of Inyosi will be owned by WDBIH which is 100% owned by an independent
broad-based trust, the WDB Trust. The WDB Trust was established for the
benefit of women HDSAs from marginalised and impoverished communities in the
Mpumalanga and Limpopo regions.
See press announcement for organogram
WDBIH manages a portfolio of strategic investments on behalf of the WDB Trust.
Proceeds generated from investments are used to fund the Trust`s programmes.
To date over R35 million has been distributed by WDBIH to the WDB Trust.
The WDB Trust operations are currently in Mpumalanga and Limpopo. The WDB
Trust is planning significant expansion to other areas, namely Kwa-Zulu
Natal over the next three years.
WDBIH`s key individuals include Sonja Sebotsa, Tania Slabbert and Tandi
Nzimande.
9.4 Community Trust
15% of Inyosi will be owned by the Community Trust, which will be established
for the ultimate benefit of specific communities in the vicinity of Anglo
Inyosi Coal`s operations and poverty nodes within Mpumalanga.
An annual amount of R5 million will be distributed to the broad-based
beneficiares within Inyosi to enable the immediate initiation of social and
economic upliftment projects.
10. Next steps and conditions precedent
Implementation of the Transactions will be subject, inter alia, to:
- the final legal agreements relating to the Transaction being executed by the
relevant Parties;
- all of the conditions set out therein being satisfied; and
- obtaining all the appropriate regulatory approvals.
Johannesburg
8 February 2007
You are cordially invited to dial or attend a presentation at 9h00 (CET)
today, 8th February 2007, led by Philip Baum, acting Chief Executive of
Anglo American
South Africa and Ben Magara, Chief Executive of Anglo Coal South Africa.
Venue: BMW Pavilion - The Pavilion Room, V&A Waterfront, Cape Town
Transport to and from the BMW Pavilion will be made available, leaving from
Entrance 2, Cape Town International Convention Centre ("CTICC") between
08h00 until 08h45, and returning after the presentation.
The live presentation will be available via conference call and can be
accessed at:
South Africa: Toll: 011 535 3600 and Toll-free: 0800 200 648
Africa: Toll: +27 11 535 3600
UK: Toll-free: 0800 917 7042
Canada:Toll-free: 1 866 802 2463
Playback: Code 2552#
South Africa & Other: + 27 11 305 2030
USA: 1 412 317 0088
UK: 0808 234 6771
A copy of the presentation will also be available on Anglo American`s website:
www.angloamerican.co.za
For further information, please contact:
Anne Dunn at Anglo American
Tel: 011 638 4730
Email: adunn@angloamerican.co.za
Yvonne Mfolo at Anglo Coal
Tel: 011 638 2051
Email: YMfolo@angloamerican.co.za
Joint financial advisers to Anglo Coal
Deutsche Securities (SA) (Pty) Ltd
NM Rothschild & Sons (South Africa) (Pty) Ltd
Legal advisers to Anglo Coal
Webber Wentzel Bowens
Financial advisers to Inyosi
Rand Merchant Bank (A division of FirstRand Bank Limited)
Legal advisers to Inyosi
Bell Dewar & Hall Inc.
Sponsor to Anglo American plc
J.P. Morgan Equities Limited
Date: 08/02/2007 07:00:02 Produced by the JSE SENS Department.
