During the past year, three long-awaited major black economic empowerment (BEE) deals were announced in the resources sector and developments have underscored government's determination to spread the benefits of empowerment transactions as broadly as possible.
The result is that there are some new black executive faces appearing in the country's financial media and companies are paying a lot more attention to ensuring the involvement of "broad-based" audiences - such as rural communities and women - in the deal.
Government pressure has been blatant and has caused raised eyebrows among industry executives concerned about favouritism and undue meddling in the workings of private-sector business.
In May, Francois Laurens, head of business development for Absa Corporate & Merchant Bank, spoke out at a BEE conference, saying that SA's so-called "black oligarchs" were being unfairly penalised by attitudes towards BEE. He also expressed concern about the practicality of putting too much emphasis on broad-based empowerment schemes.
The "black oligarchs" he refers to include successful businessmen such as Tokyo Sexwale, Patrice Motsepe, Cyril Ramaphosa and Mzi Khumalo, who it seems the ruling political elite have decided are now rich enough. The belief is that government officials have been trying to limit the flow of BEE deals to these entrepreneurs by pressuring companies into selecting others.
That is denied by Motsepe, the chairman of African Rainbow Minerals (ARM), in which he is the largest shareholder, owning 43%. He maintains he has never been penalised in this way.
But Motsepe was certainly pressured into broadening the shareholding structure of ARM through the creation of a trust that bought out the 14% stake held in ARM by associate Harmony.
The trust - called the ARM Broad-Based Black Economic Empowerment Trust to make sure everybody got the point - was set up after minerals & energy department director-general Sandile Nogxina voiced concerns that the structure of ARM was not sufficiently broad-based.
Then, in December, Sexwale's Mvelaphanda group sold off its 23% stake in Mvelaphanda Resources to BEE resource company Incwala Resources. Widespread speculation is that the underlying reason was Mvela's inability during the past year to do further resource BEE deals.
The clearest public expression of government pressure came in November in a speech by minerals & energy minister Lindiwe Hendricks at the launch of the De Beers Consolidated Mines (DBCM) empowerment transaction, which was concluded with the establishment of the Ponahalo Consortium, headed by former Northern Cape premier Manne Dipico.
Hendricks said pointedly that Ponahalo was "not made up of the usual suspects. We have faces here that are brand new to the business and that's an exciting feature of this deal."
The parties behind the DBCM deal went all out to ensure the deal was broad-based: it involved specific trusts for local communities, disabled people and women. Other trusts represented DBCM employees and pensioners and four prominent businesswomen were involved through Peotona Capital.
Some observers believe the more logical partner for DBCM should have been Sexwale and not Dipico. The reason is that Sexwale's Mvelaphanda Resources already had close links with DBCM through an exploration joint venture to look for diamonds in Limpopo Province.
According to Laurens, the role of empowerment must be assessed against the overriding priority of achieving growth in the SA economy. "The biggest challenge facing the country is to achieve an annual rate of growth in GDP of between 4% and 6%. BEE has to be assessed against that requirement and it cannot take place at the expense of this primary focus on overall growth," he said.
"The experience of countries elsewhere is that businesses are built by a few successful entrepreneurs and their success breeds more success. There is a ripple effect from their efforts."
Two other big BEE deals announced in the past year involved Kumba Resources and Impala Platinum (Implats). Another important development was the conversion of all the old-order mining rights to new-order mining rights held by gold giant AngloGold Ashanti.
The Kumba deal splits the resource group into a separate, focused iron-ore company - to be run by Anglo American - and a diversified coal/base metal group in which the dominant shareholder will be Eyesizwe Mining.
Eyesizwe CEO Sipho Nkosi seems certain to be the CEO of the diversified mining group - dubbed Newco at this stage - but Kumba is playing coy, saying the announcement of the CEO will be made by the new board of directors when that board is established.
What is certain is that Newco will be a force to be reckoned with in the coal business. Putting Eyesizwe and Kumba's coal assets together will create the fourth-largest coal group in SA, selling more than 45 Mt/year.
This coal group will also have the best medium- and long-term growth prospects in the country. That's because of Newco's dominant position in Limpopo's Waterberg coalfield, which will become SA's most important coal resource when the coal deposits around Witbank and Middelburg are mined out within the next 20 years.
Matimba's generating capacity is likely to be expanded by 50% as part of Eskom's expansion programme. It is likely another new power station will be situated in the Waterberg: Kumba and Eyesizwe between them control the bulk of the shallow - and therefore cheap-to-mine - coal resources in the Waterberg.
Implats opted for its logical BEE partner when it struck a deal in December to team up with the Royal Bafokeng Nation (RBN), which owns the mineral rights to the land near Rustenburg, where the group mines the bulk of its production.
The relationship between Implats and the RBN was a volatile one until the two reached agreement in 1999 over the renegotiation of the royalty paid by Implats to the RBN, which was increased to 22% of taxable income.
It was believed that royalty would be converted into equity as part of any subsequent empowerment deal, but that did not happen. Instead, Implats and the RBN went a different route and the RBN - through its resource business arm, Royal Bafokeng Resources (RBR) - paid R3,4bn to buy into Implats' refining subsidiary company.
The reason for going this route was to avoid the uncertainty surrounding the status of royalty payments in future, which will only be clarified once government produces a "money bill", which will deal with this aspect of the new mining legislation.
Other key features of the Implats/RBN deal were, once again, the moves to spread the benefits widely and also the involvement of RBR executives in the running of the business.
RBR will have two seats on the board of the listed Implats holding company.
