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Past BEE targets should count as credits

Staffer - Financial Mail

By a twist of fate, AngloGold Ashanti may be a victim of its own alacrity in trying to transform. The company believes it has more than met government's black economic empowerment (BEE) equity ownership requirement through three deals it has struck since 1998. These were compliant with the rules and expectations that prevailed at the time. Asset sales to operations like Patrice Motsepe's ARMgold worked out to the equivalent of a 21,8% BEE equity stake. At least 15% is needed to qualify for conversion to new-order mining rights.

Not so fast, says government.

It now regards AngloGold Ashanti's equity requirements as "the only outstanding issue" holding up conversion of rights (see Focus). And that has to be seen in the light of minister Phumzile Mlambo-Ngcuka's new concern over AngloGold Ashanti's lack of an ongoing equity partner.

It seems to be a classic case of goalposts being moved - or, to apply the football analogy more accurately in this case, of ruling after the final whistle that a goal which had been awarded by the referee does not, in fact, count after all. If AngloGold Ashanti had known that an equity partner was what government wanted, it would have made other arrangements.

The trouble with empowerment, in mining as in other areas of business and society, is that it is a work in progress. Government has tried to offer more clarity with detailed scorecards and guidelines, but it also seems reluctant to set too much in stone. Minimum requirements might seem onerous now, perhaps the maximum the market will tolerate - but in a few years they may seem unambitious. As with quotas in sport, there is a burning desire to get beyond the minimum.

As Mlambo-Ngcuka has admitted, the lack of clarity in the new mining legislation is deliberate, so that any "stupid mistakes" in the drafting process can be put right. This caution is understandable but hardly calculated to inspire investment.

 

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Barclays - Absa deal to test empowerment

By Wendy Hall - Business Day

Barclays, the UK banking group that is considering taking a controlling stake in local bank Absa, will set a precedent for foreign firms buying into South African companies with empowerment interests.

 

Here's the BEE hymn book

By I Mahabane - Financial Mail

Late last year, government released its code of practice on black economic empowerment, the closest thing to legislation on BEE.

 

BEE has an international counterpart

By Ralph Hamann - Business Day

Black economic empowerment is a dominant theme in South African boardrooms and the business press. In many ways, empowerment is a uniquely South African phenomenon. 

 

Cosmetics industry gears up for empowerment plan

By N Moodley - Business Report
Durban - As the cosmetics industry geared up for its black economic empowerment (BEE) plan, the steering committee said this week that the questionnaire that would be used to gather industry statistics was ready.

 

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