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Investment Guide

Machines OVER MEN?



Modernization, mechanization and regulation are some of the key aspects that need to be looked at for South Africa to build a globally competitive and sustainable mining industry.

Earlier this year, the mining sector experienced a five-month crippling wage strike. It follows the 2012 unprotected wage strike outside Lonmin’s Marikana mine, where 34 miners demanding a wage increase, were shot dead by police. Strikes pose risk and uncertainty for investors. It is often perceived, when long protracted strikes take place, that conversations about mechanization comes to the fore.

Mechanizing mines is seen as a solution to securing a steady stream of revenue and could cut significant costs for mining companies.

Speaking at the Joburg Indaba on mining, Mineral Resources Minister Ngoako Ramatlhodi says strikes are not a uniquely South African phenomenon.

“But when they run into periods exceeding five months; that should raise attention to all stakeholders. It puts the efficacy of regulatory institutions into question,” says Ramatlhodi.

“The cost to the industry and economy has been beyond words with recent figures revealing that in the first quarter, sales of total minerals declined by 24.7 percent. This narrowed to 9.6 percent in the

second quarter.”

He says the cost to the industry and economy has been beyond imaginable proportions.

Chairman of Anglo American Platinum, Valli Moosa, says that the recent strikes in South Africa are more of a major social uprising and revolt than purely labor relations disputes.

“We can say that it was a result of educators from the ultra-left influencing workers… but workers would not have gone on a five-month strike without pay, unless they wanted to send us a serious message. I feel ashamed that miners did that,” says Moosa.

“Workers want a fundamental change of what is happening in this industry. They didn’t achieve that much in as far as their demands are concerned.”

Moosa added that there needs to be a fundamental change and questioned whether mechanization could be the silver bullet to drive the future of South Africa’s mining industry. He believes that the country needs to move to a higher degree of modernization because it will improve productivity.

The rest of the world has experienced unprecedented growth of their economies following mechanization.

“We should not take ourselves back to the dark ages. Technology will be the biggest driver of growth in South Africa in the foreseeable future,” says Moosa.

The Chief Executive of diversified miner, Exxaro Resources, Sipho Nkosi, agrees but notes that education is critical.

“We need to go back to educate our people in the correct areas. And if you look at technological areas around the world, its mind boggling,” he says.

Industry experts say that the mining sector is a sunset industry, but Nkosi says that we cannot focus on that. He believes that government must be clear on its policy and that the industry needs to know what its role is in helping to grow the economy.

But trade unions fear that mechanizing the mines will result in massive job losses. Moosa believes that where there’s a reduction in the labor force, mining bosses have a responsibility.

“We have a moral responsibility for that. Unless we take responsibility we will not get to where we want,” says Moosa.

Norman Mbazima, Chief Executive of Kumba Iron Ore, says mechanization does not necessarily result in job losses as perceived by many, especially labor unions.

“Unlike before, when we solely relied on labor, now due to mechanization we rely more on planners who might incorporate even injured miners,” says Mbazima.

Chief Executive of Lonmin, Ben Magara, in support of Mbazima, says unlike what is generally perceived, no mine could retrofit as every mineral deposit had an appropriate method.

“If we achieve mechanization within 10 years, we could have achieved it in the shortest term possible, 20 years would be medium term and 30 years long term,” says Magara.

To have a stable economy, South Africa needs to grow at 6%. In September, the International Monetary Fund lowered this year’s growth to a mere 1.4%.

All stakeholders must come together and find solutions that make sense.

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Cryptocurrency for Africans




George Gordon is on a quest to revolutionize the financial system. The director of Africa Master Blockchain Company talks digital currencies, blind risks and board games.

What is this new African cryptocurrency you are offering?

Where the majority of current digital currencies are based on speculative models, AfriUnion Coin (AUC) and the AfriNational Tokens (ANT)are designed for a transactional purpose allowing international payments, remittances, foreign direct investment as well as day-to-day transactions at local retail stores and other outlets. While the option for speculative trade is available with AUC, the focus is not around that.

Each African country will have a specially-designed ANT which will allow users to pay for goods and services and bills easily through completely digital means without requiring any bank account. AUC and ANT will be fully interchangeable to one another and there will be no fees for the user.

It’s the natural next step for digital finance from mobile banking which most Africans are accustomed to. The ability to freely have the power to send and receive money locally and internationally will allow the freedom of choice and spending power many Africans don’t have currently.

What is your own investment philosophy?

I am a gambler! I believe in taking risks and putting things on the line. That being said, blind risk or whimsical guesses don’t get you very far. Always acquire enough information to understand to a reasonable level what the thing you are planning on investing is or how it works and then trust your instinct and gut feel.

What advice would you give entrepreneurs wanting to invest in blockchain?

First, do some research in terms of what the blockchain technology is being applied for or created in terms of its application to an industry or project. Thereafter, check the white paper for the design of the platform as well as its functionality and applicability to what it is trying to achieve. If it aligns with your personal investment rules, then go for it,however, remember that blockchain is continuously evolving and thus you need to explore outside the usual and standard.

First cash-less, now card-less. What is the future of online banking?

If we are looking into what is currently science fiction, I would say the future is digital contact lenses that will be able to connect you to all your social media accounts, internet, news as well as make payments by just looking at QR codes or specialized barcodes to approve and accept payments.

Now, realistically we are not far off from such innovation and technology, but for the time being, I think the next step is scanning of QR codes at retailers and having the transaction automated from your wallet to the retailers digitally.

What is your most prized investment and why?

My mind. I believe that the work I have put into developing my mind, and continue to do so every day, is the number one investment that I have ever done. It allows me to look at things in a unique perspective as well as provides me with the tools to push boundaries and create new opportunities.

Money, success, fame? Which is most important to you?

I would have to say success… because it is most likely going to bring the other two as well, right? But success in the form of starting something and letting it grow and succeed and knowing that something new exists because of your efforts.

What do you spend your money on mostly?

Board games. I love board games and believe it’s a fantastic way to expand your mind as well as have fun with friends.

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Investment Guide

King Price CEO On Why He Invested On Insurance



King Price Insurance’s CEO Gideon Galloway, who built an insurance company in South Africa worth over $226 million in six years, talks investments, industry trends and how self-driving cars will change the entire car insurance landscape.


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Offering The American Dream



Gar Lippincott and Daniel Ryan of Atlantic American Partners were in South Africa recently looking for high-net-worth individuals wanting to invest in the US.

It’s a warm spring day in September, and Gar Lippincott and Daniel Ryan have just arrived in South Africa. It is Lippincott’s first time in the country, and he is jet-lagged.

A little over two months ago, he was booked to fly here from the United States (US) but was turned back at immigration.

“At Atlanta airport, the lady looked at Daniel’s visa and let him through and she looked at my visa and she said ‘I am afraid you can’t get on the plane because you have to have a blank page on your passport’. I said ‘I have three blank pages’ and she said ‘no, it’s supposed to be the one that says visa on it’. She said it’s the rules in South Africa so I had to sadly go back home… now when I was coming, I was told that’s not an issue anymore so I am happy they have made traveling into the country easier,” says Lippincott.

With a brand-new passport, he’s here with Ryan looking for people who want to invest in the US in exchange for a green card.

Lippincott, the Managing Partner of Atlantic American Partners, says he has always been keen on South Africa for its growth opportunities and prospects.

“From what I understand, the things that are causing short-term decline in the economy in South Africa are set up to provide long-term growth and hopefully people will understand this,” he says. Ryan, the company’s Managing Director of Emerging Markets – Africa, agrees: “I lived in Malawi for 12 years and South Africa is still considered the shining one throughout the continent. Even with all the problems, everyone still wants to come here because of the opportunities.”

According to an AfrAsia Bank report, South Africa comes second to Mauritius in boasting the highest number of high-net-worth individuals.

These are the kind of people Ryan and Lippincott target through their work at Atlantic American Partners. The company has real estate investors and professional private equity fund managers that manage money for banks, insurance companies, and pension funds. In addition, they help people get US green cards and ultimately US citizenship through the US government’s EB-5 Immigrant Investor Visa Program.

“Basically we look for people who want to move to the United States and we help them do so legally by investing and the nice thing is, with our program, they are also able to get a nice return on investment,” he says.

According to Lippincott, for a $500,000 investment that creates 10 jobs for American workers, you could get a green card in about two years and be a US citizen in about six or seven years. “Twenty seven countries have an investor visa program but with most of them, it’s essentially a fee you pay, or you need to be actively engaged in the day-to-day operation of a business. For example, you invest $1.5 million in Australia, but you need to hire employees and generate a certain amount of revenue. One of the biggest advantages with our program is you actually invest the $500,000 into a fund. We act as a trustee of that money and within five to seven years, they get that money back with a bit of return on investment and you are a permanent citizen in the US.”

Atlantic American Partners invests the money in real estate developments like hotels, apartments and student accommodation.

“What’s nice about the program is it doesn’t only cover the investor; it covers the spouse and children under 21. Our biggest family was a Hungarian family with seven children so they got nine green cards for $500,000,” says Lippincott.

The company says it has had positive response in South Africa. “Two months ago, we were here and we had scheduled six presentations for 100 people and we ended up speaking to 450 people. Most were business people, people worried about the economy, people worried about the political future of South Africa and people concerned about the education future of their children,” says Ryan.

According to Lippincott, despite the news of the clampdown on immigration, the US economy is booming and will perish without immigration. In the era of Donald Trump and his anti-immigrant views, that’s heartening news indeed.

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