Nov. 7 (Bloomberg) -- 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 the company’s known, will give the trusts loans to buy the stake, guarantee annual payments of 20 million rand for development projects and provide as much as 30 million in additional funds for social investments, it said in a statement.
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, Johannesburg-based Amplats said today.
The company would exceed South Africa’s black economic empowerment rules as a result, it said. The country has ruled mine operators must have 26 percent black ownership by 2014 to redistribute wealth to those disadvantaged under apartheid. The governing 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 rose 1.5 percent to 578.39 rand by the 5 p.m. close in Johannesburg. In comparison, the FTSE/JSE All Africa index of regional stocks was up 1.9 percent.
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