Amplats to Put $440 Million Stake Into Trust for Communities
Anglo American Platinum Ltd., the largest producer of the metal, will place a 2.33 percent stake worth about 3.5 billion rand ($440 million) into two trusts to raise money for communities near its South African mines.
Amplats, as it’s known, will give the trusts loans to buy the stake, as well as guaranteeing payments of 20 million rand a year for development projects and an additional 30 million rand for social investments, the company said in a statement today.
The transaction, which will cost Amplats about 1.2 billion rand, will see the company buying back part of the shares over a decade, with the size depending on the stock’s performance. The deal is intended to benefit communities at its Mogalakwena, Dishaba/Tumela, Twickenham and Rustenburg mines, Amplats said.
The company would exceed South Africa’s black economic empowerment rules as a result, it said. South Africa has ruled mine operators must have 26 percent black ownership by 2014 to redistribute wealth to those disadvantaged under apartheid. The ruling African National Congress’s Youth League is calling for nationalization of mines because the pace of change is too slow.
“The need for ongoing community development and sustainable economic transformation is recognized as a commercial and social imperative,” Amplats said.
The company declined 1.9 percent to 559.35 rand by 12:06 p.m. in Johannesburg trading. In comparison, the FTSE/JSE All Africa index of regional stocks was down 0.3 percent.
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