De Beers and Vast Resources will be allowed to explore for diamonds in Zimbabwe, which would make them the first listed companies to mine there in that sector for two years, Mining Minister Winston Chitando said.



A spokesman for De Beers, an Anglo American unit, said in an email it was not mining in Zimbabwe and did not intend to. Vast Resources said it could not comment.



Zimbabwe has been working to rebuild investor confidence since long-term leader Robert Mugabe was ousted in late 2017.



This month its mining ministry said it would let in two new companies but did not name them.



On Wednesday, Chitando told Reuters De Beers and Vast Resources would be allowed to mine, but could not comment on any changes to ownership rules. “Those are the details that have to be thrashed out,” he said.



Vast Resources signed a memorandum of understanding with Botswana Diamonds in May to form a special purpose vehicle majority-owned by Vast to develop resources in Zimbabwe.



In November, Chitando said Zimbabwe did not plan to change radically its ownership laws for platinum and diamonds.



Few miners doubt the potential of Zimbabwe’s mineral resources and it is among the world’s leading diamond-producing countries. But some investors are concerned about how much money companies can take out because of dollar shortages.



Mugabe accused De Beers of looting the largest diamond fields in Marange in eastern Zimbabwe, where production is dominated by state-owned Zimbabwe Consolidated Diamond Company. De Beers denied the charge.



Zimbabwe Consolidated Diamond Company is one of two firms currently allowed to mine diamonds there. The other, Murowa Diamonds, majority-owned by Rio Tinto until June 2015, is the only private company mining diamonds in south central Zimbabwe.



In early 2016, Mugabe’s government evicted all diamond miners from Marange, saying their licenses had expired after they declined to merge under the state-owned mining firm.



As part of its quest to attract foreign investment, Zimbabwe’s new government has liberalized indigenisation laws for many minerals but still limits foreign ownership of platinum and diamond projects to a minority, with the state holding 51 percent. -Reuters



<ul><li>MacDonald Dzirutwe and Barbara Lewis</li></ul>

mine

Zimbabwe Mining Minister Invites De Beers, Vast Resources to Return

Sheila Khama, Director of the Africa Natural Resources Centre at the African Development Bank (AfDB), has over 20 years of experience in Africa’s extractive industry. Besides serving as CEO of De Beers in Botswana, she worked as the compliance officer for 20 subsidiaries of Anglo American Corporation in Botswana.
The glass ceiling, however, is not confined to mining, she says, nor to Africa.
“Mining is no different from other industries, including the financial sector,” Khama explains, referring to various reports around the issue of African women at the corporate helm.
“Africa’s mining industry, in addition, is not very different from mining sectors elsewhere in the world. When looking at the world’s largest extractive corporations, you will find that only one – Anglo American – has ever been headed by a woman, namely Cynthia Blum Carroll,” says Khama.
Whilst she acknowledges a shortage of female top mining executives, Khama says this can’t just be blamed on the sector. In her view, it’s a symptom of society’s inability and unwillingness to grab the issue of gender transformation by the horns.
“The mining landscape can’t change faster than society does. Take the issue of education and what is expected of women. From what I know, more and more African girls are enrolling at primary and high school level, and many of them are outperforming boys,” she says.
“At university level, however, the number of African female students declines. This figure drops even further when girls are about to enter the working world, mainly because of societal pressures to get married and raise children.
“The mining sector can’t change these things. Like other sectors, we also depend on the willingness of society to release women from traditional roles and allow them to excel and break through the glass ceiling.”
That doesn’t mean mining companies should sit back. They certainly have a role in attracting and retaining women, and grooming them to become directors and executives.
“Companies should in fact profile and appoint women to strategic positions, draw up internal policies that deal with gender transformation, and use those policies to deploy women at the top and set other female employees up for success,” says Khama, adding this should not be a token.
“If gender transformation is a token, it has no future. It has to be embedded in a company’s business logic. Women need to be seen as an economic asset… They bring crucial skills to the table, skills as relevant in the mining pit and processing plant as in the boardroom.”

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‘As Relevant In The Mining Pit As The Boardroom’

Khanyisile Kweyama is dynamite in a petite package. She is the first black woman to be appointed Executive Director for South Africa at Anglo American, the world’s biggest platinum producer. She has also staked her claim in the mining sector as the current Vice President of the Chamber of Mines in South Africa, and has recently responded to the call to national duty, taking on a seconded role as the CEO of Business Unity South Africa (BUSA).
We meet Kweyama in the offices of CNBC Africa in Sandton in Johannesburg for a quick coffee and her thoughts on how she broke barriers to become a player in South African mining’s big boys’ club.
In 2014, when the country was in the throes of its longest and costliest strike in the platinum mining sector, Kweyama and her team were right at the front, desperately trying to put out the fire tearing into the country’s investment case.
She recalls the unusual phone call from Anglo’s global CEO, Cynthia Carroll, to confirm dinner arrangements in the midst of this storm. Although she expected her local insight would be sought to protect the company, its workers, and keep communication alive with the unions, she didn’t expect to leave dinner as the company’s Executive Director.
“As the Human Resources Executive, I thought I had a clear line of sight into the company’s succession pipeline. I didn’t see this coming,” she says.
Black empowerment in South Africa keeps a close tab on black appointments. Naysayers were quick to point out that hers was another window-dressing move on the part of the company.
“This is going to be an issue that women, and black women in particular, are going to have to take on boldly and without flinching. There is expectation for us to prove ourselves over and beyond our capabilities. Create your niche and outperform,” says Kweyama.
When she received the call to serve as the CEO of BUSA, she says the enormity of South Africa’s economic stagnation made her firm up her decision. She accepted.
As CEO, she has to bridge the yawning silence between business, government and other stakeholders.
“The country is stuck. We need to do something to move beyond the anemic growth phase we’re in. No one can do it alone.”
Her typical day includes meeting with union leaders, participating in ministerial and presidential deliberations, taking the lead on capturing the input of business, contributing to NEDLAC (the body tasked with finding a middle ground around South Africa’s labor tensions), and all the while, working at the chamber of mines with a broader team to reinvigorate life into a struggling industry.
Kweyama is accountable to a range of ministers. Her roles spill outside of the borders as BUSA also participates in regional and international fora in a myriad Southern Africa Development Community (SADC) initiatives that fight for better trade terms for the region and emerging markets.
For a woman comfortable juggling numerous roles and making decisions that impact on a range of organizations, she prefers the backseat at home.
“My husband is the boss at home. He’s a medical doctor and he lives in his own world. He too has significant industry challenges that he has taken a lead on but we try not to bring our corporate challenges home.”
If there ever was a prize for the strangest love story, Kweyama and Cyril would take it hands down.
It goes thus.
She had needed a flu shot and called on a friend to administer it. Unable to do so because she was in the salon having her hair done, her friend arranged for Kweyama to come to the salon, for the flu shot to be delivered, and for Cyril to administer it. That was the beginning of their love story.
Kweyama’s family is her biggest support. She is a mother to eight children, of which two are her biological offspring. She is also a spiritual mother to many through her church and community.
“Prayer keeps me going. I always pray for guidance and when I get stuck I have to remind Him that we haven’t come this far to be stopped by this nonsense. Show me how to surmount this hurdle.”
Luckily for Kweyama, her prayers seem to be helping.

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No Small Feat In The Big Boys’ Club

As the world gathered to mourn Nelson Mandela’s passing in early December, I reflected on the lessons I learned from the great man – humility, strength and a passion for South Africa and her people – and how they have affected and guided my professional path. This has been particularly poignant for me in my role as ‘curator of people’ of the various companies in which I have worked. People are at the heart of every business and in my career, I have strived to imbue the leadership principles espoused by Mandela – that good leaders collaborate openly, honestly and consistently with others in order to reach a common goal.
Mandela’s commitment to the creation of a non-racial and non-sexist democracy in South Africa has had a particularly strong impact on my career. Women across the world continue to fight for recognition, particularly in the corporate environment – and I am grateful for the leaders, who fought for freedom and those who fought to ensure that women were not excluded from the conversations surrounding equal rights for all. I am particularly proud to represent women in the mining industry through my positions as executive director of Anglo American in South Africa and vice president of the South African Chamber of Mines. My appointment as the first black female in the position of executive director of Anglo American is a credit to the company’s commitment to transformation and diversity in the workplace.
I took up my post at Anglo American on 1 September 2012, at an incredibly difficult time for the South African mining industry. I immediately had to take on a crisis management role, as Anglo American and South Africa at large grappled with the tragedy at Marikana and the rolling strike action across the mining industry. This difficult period spurred critical conversations about the role of mining in our society. It was a turning point for the industry as we realized that we needed to work harder to ensure that more people benefit from our country’s phenomenal natural resources. I am proud to be a part of a company that is committed to this goal.
My position as executive head of human resources at Anglo American Platinum (prior to taking up the executive director role) prepared me for the extremely difficult time in the aftermath of Marikana. However, I was able to improve relationships with unions, bring wage negotiations to a successful conclusion and build a cohesive and unified team. I value that time as I learned how to deal with difficult situations and to value my independence and unique point of view. These were lessons I started to learn from an early age, when my parents, particularly my father, strove to instill an attitude of independence in me and ensured that I received a good education.
Both through the lessons that I learned from my previous career choices, as well as a strong personal conviction, I have remained committed to working with Anglo American’s executive leadership team, as a member of the Group Management Committee (GMC), to drive the company’s extensive transformation and empowerment programs.
One of the core components of my role at Anglo American is the creation of a unified team across the disparate organization. I am lucky that I can engage with stakeholders from a diversity of backgrounds. While my responsibilities at Anglo American involve communicating with those of different mindsets, it is important to remember that ultimately we’re all working towards a common goal. It is about coming up with solutions, while keeping your eye on the bigger picture.
This skill was honed when I worked for the Consultative Business Movement, helping to build relationships between business leaders and politicians in South Africa pre-1994, when the National Party was talking to the African National Congress  for the first time. It was at this time that I was able to put to good use the lessons I learned throughout my upbringing regarding facilitating and finding solutions to difficult problems. I am proud to have contributed to the smooth progress of democracy in South Africa, and count my tenure there as one of my biggest personal achievements.
I am inspired by people who have a vision for what they do, and follow through with what they believe in, no matter what obstacles they meet. I am also inspired by other women in leadership positions such as Nkosazana Dlamini-Zuma, the chairperson of the African Union Commission, who are role models not only to me but to many other younger women. I also take time to refresh internally, making sure to spend quality time with my family, and connect with our good Lord for strength and endurance.

At The Helm Of Africa’s  Biggest Ship

To say Nicky Oppenheimer is understated is an understatement in itself. It is tantamount to saying his family – the third richest in Africa – is well off; or that Winston Churchill, another famous Old Harrovian, was a fair public speaker.
It must be tough suffering the stare and glare that goes with being the scion of a powerful world famous family, but Oppenheimer wears his eminence lightly as he sits opposite me for this rare interview. This Johannesburg office may be dressed lavishly, but the man himself, in a blue open-necked shirt, is not. He is measured, calm and guarded as he chats about everything from entrepreneurs and corruption to government and business. There is a glint of pride in the eye when he mentions, fleetingly at the end of the interview, his son’s first class cricket career as an Oxford Blue. Jonathan Oppenheimer bowled for Combined Universities against one of the world’s finest batsmen, West Indian Brian Lara.
“He bowled the first three and moved them away and then brought one back into the pad. Lara LBW Oppenheimer 0,” chuckles the proud father.
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The laidback calm belies a busy few years for the Oppenheimers and the two corporate giants that the family took generations to build: Anglo American and De Beers. In the next few years, the family will invest billions into Africa and her entrepreneurs with straightforward business philosophy.
“You have to learn to get on with people, you have to learn to determine the bullshit from the serious stuff, and then you have to have a good common sense and a vision of where you want to get to,” says Oppenheimer.
This no nonsense approach is driving the family forward in the business of private equity. The investment drive came after the wrench of selling out from De Beers, the largest diamond producer in the world. Along with Anglo American, De Beers may have survived political upheaval and two world wars, but the recession of 2008 proved a turning point.
“From a De Beers perspective, it came at a bad time. De Beers had just being opening new mines so we had to borrow money to pay for the mines – you don’t get a return very quickly – so we had to renegotiate our debt conversance with the bank, that environment wasn’t easy. We managed, we had to turn to our shareholders and get more money from them; this was post privatization. So both Anglo and the family put up more money, which was brave on both our parts,” says Oppenheimer.
“In my father’s lifetime, he talked about the great depression, where the situation was far more dramatic than anything I ever had to face, and you knew that people wanted to have diamonds, there was never any lessening of desire just that they didn’t have the income to do it. So you had to cut your cloth to suit that and wait for the times to improve… It never occurred to me that the business wouldn’t recover, there were times where you have somewhat sleepless nights.”
The emotional decision came in 2011. After 85 years, the Oppenheimers voted to sell their 40% stake in De Beers, the business that built the family fortune, for an estimated $5.1 billion. For the first time in decades, the family had no stake in any listed company.
“Not quite a difficult decision, the fact that there were three shareholders in De Beers, the family, Anglo and the Botswana Government was always in my view an unstable arrangement and I knew something was going to happen at some stage. Either Anglo would say it was not a business for them or they would say they really want to be in it in a much more serious way than we are at the moment and they came out on that side and made us a very fair and reasonable offer. And then of course I was in a difficult position because I had to deal with a business I had been in all my life on the one hand, and then the requirements of the family, my sister, her children, my children. We ended up in a situation where my heart made me say ‘look we should stay with De Beers’ but my head knew absolutely clear that this was the right deal to do.”
Analysts in Johannesburg will say Mary Slack, Oppenheimer’s sister, was a strong voice in the decision to sell.
“She (my sister) was not in the day to day running of the business… We all ended up wanting to sell,” replies Oppenheimer.
The parting broke a link with De Beers that dates back to Nicky’s grandfather, who led the family’s charge into Africa.
A London trading company posted 21-year-old EO Oppenheimer, the son of a German cigar merchant, to South Africa to buy diamonds. He took to the diamond trade like a duck to water and his knowledge of the stones was unparalleled; legend has it that Oppenheimer used to carry a note book around him to write down any useful business information. By the time he was 30, Oppenheimer was the mayor of the diamond town of Kimberly – no mean feat in an age when grey hair ruled the roost.
“I always remember him as a very quiet guy, I remember him as the sort of guy that if you bumped into him you rebounded,” says Oppenheimer.
The formidable Harry Oppenheimer was the next generation – a strident man who made his mark both in business and politics, as well as guiding his son in the art of business.
“No, I don’t think he was a tough man in business, he had a very good view of the right way to get to a point, to how to negotiate his way there. I would have thought my grandfather was a tougher business man,” says Oppenheimer.
“I always knew that my father was there and I could discuss business matters with him, and that gave you a head start, it never got you to the finishing line, so that was whether you could deliver or not. He taught me business went on and it was an assessment of risk and to be a successful business man you have to take risks. There is no good being risk adverse, then you go nowhere.”
Nicky Oppenheimer’s air harks back to the gentility of 1950s Britain, where he began his education at prep school at the age of seven. Harrow and Christ Church Oxford followed.
“I am of an age where going to university was the last holiday of your life and I thought that was absolutely fantastic. Politics, philosophy and economics was a good sort of all-round degree. I thought it was fantastic, wonderful life. I didn’t work very hard I got a third-class degree at the end of it all. But I had a lot of fun,” he says.
When Oppenheimer arrived home in South Africa, the army called him for national service.
“The army had a terrible problem with me and that was that I had a degree, and so if you have a degree you did your basics and then became an officer. So, I became an officer and then they had no idea what to do with me. I had no skills that were of any use to them at all. I was sent to a great big parking lot just outside Pretoria and I signed my name every time a vehicle came in and I signed saying the vehicle had four tyres and two headlights. I always say that the army taught me how to sign my name very fast,” he smiles.
Then, Oppenheimer took his seat on the board, which he was to occupy for 37 years.
“It is what I saw myself doing; I had a particular love within the Anglo business, the diamond business. I was lucky enough to achieve what any diamond person’s primary ambition would be and that’s become chairman of De Beers. I’ve been extraordinarily lucky,” he says.
Not too soon after the De Beers exit in 2011, the family set up its investment arm Tana Africa Capital with the investment company E. Oppenheimer &amp; Son and Temasek, a sovereign wealth fund from Singapore. The partners put up $150 million each and sources say the family is also ready to invest the billions from the De Beers deal. The investment company will look at agriculture and consumer businesses. It will also consider deals in media, healthcare and education up to $50 million.
“We are Africans and we would like to invest in Africa. So we are busy looking for things to do, we have some investments but we are constantly on the lookout,” says Oppenheimer.
Tana Africa Capital has already invested in Promasidor Group, a company founded in the Democratic Republic of Congo in 1979, that sells everything from powdered milk to tea in 30 African countries. Regina is Egypt’s second largest pasta manufacturer and owns the country’s only durum wheat flour mill. It has an expanding export business into Africa and the Middle East.
Oppenheimer has faith in African entrepreneurs.
“People are pretty entrepreneurial in Africa and growing so and that is very encouraging, a constraint in Africa is bureaucracy,” he says.
“The problem rests on the fact that, so many African economies are mineral based. The thing with minerals is that you can’t pick them up and take them anywhere and that allows government, wherever they are, to be bureaucratic, which is not business friendly, because a business can’t simply say I don’t like you I’m going to go somewhere else, you’ve got to deal with it. As a continent we’ve got to learn that you’ve got to be business friendly and find ways to create an environment for business to flourish and that means a bit of a mind change. The important thing is they (governments) have a huge role to play in controlling the environment. The less they have to do with the actual business, in my view, the better.”
I venture that, in the words of Ugandan president Yoweri Museveni it is easier for a camel to pass through the eye of a needle than it is to keep government out of business.
“What one has to realize and what governments have to understand is, they are missing an opportunity. The penny will fall and then they must do much more than you talked about. They have to create the environment, they have to set the rules and regulations and tax rates but actually running of business is something short term that government is really bad at.”
And corruption?
“You have to stand up for what is right, corruption is an extremely insidious and dangerous thing and very difficult to eradicate once it starts… I often ask people once you’ve become a corrupt society, how do you stop being a corrupt society? And you don’t get very satisfactory answers. I think you have to demonstrate that you can be successful and contribute to society while being ethically sound, and it will be a long and slow process.”
More legislation, I venture.
“I always worry about legislation and what is does. When legislation comes forward, it is designed to catch the crooks. To my mind the crooks are always too clever to be caught. What is does is make honest people’s lives intolerable. So there has to be legislation but there has to be a drive to get people to believe in business ethics and doing the right thing.”
Then there is the struggling mining industry, which Oppenheimer spent more than half of his life working in. South Africa was shaken by a costly four-month strike in the platinum mines, followed by sapping and unprecedented power cuts. The Energy Intensive User Group that represents 32 of the country’s biggest energy consumers – including the smelters and mines – says 97% of its members are cutting back on capital projects because of a fear of power cuts.
“I think [mining] has a huge contribution to make. People talk about it like it’s a curse, which it certainly isn’t. Minerals have a future, if you’re blessed with minerals that’s a fantastically good start – you’ve got to use them. I think what happened in Botswana is a good example of a country that has taken its diamond revenues and put it to a good cause. You’ve got to find a way of encouraging mining, and mining is more long term than almost anything else. So you’ve got to create an environment where somebody is going to invest billions of dollars with a view that the first return will be seven to ten years away and the confidence to believe that the deal you have and environment you’re dealing in will still be there in seven to ten years. Then you will find people who will invest and companies and businesses will do… It is going to depend on the mining legislation, which is a bit up in the air at the moment. If you want to invest in a mine, you have to say ‘am I confident that the environment that the government creates for me will stand the seven to ten year test.’”
Oppenheimer concedes that the battered image of mining, in the land of his birth, has made foreign investors think twice.
“I think that people are looking at South Africa and waiting to see – that’s a bad situation. You want them not to be in wait mode, you want them to be in invest mode. The key thing in South Africa seems to be the creation of jobs. The government task I think should be to do everything in its power to create jobs so that the huge number of unemployed youth we have in the country can get jobs, get wages, fair proper wages and that needs to color every decision they make,”
says Oppenheimer.
As for the man himself, he is throwing himself into a number of philanthropic projects including the effort to save the endangered pangolin. Apparently, the long-tailed, scaly mammal is prone to electric security fences in the bush and is dying out.
If the pangolin survives and corruption dies, surely anything is possible in Africa.

‘Corruption  Is An Extremely Insidious And Dangerous Thing’

Robert Friedland was ranked 347 on last year’s FORBES’ ‘400 Richest Americans’ list with his net worth of $1.3 billion. What’s more, Friedland is looking at developing a platinum group metals (pgm) project on the northern limb of the Bushveld Complex—the geological formation, which hosts the world’s greatest known pgm resources.
This investment may be good news for South Africa but some industry watchers may wonder what Friedland has been smoking. Not only are the platinum mines the battleground for the on-going industrial relations confrontations in the mining industry but platinum market and business fundamentals have been hammered.
Further, the platinum-bearing Platreef of the northern limb is geologically very different to those of the western and eastern limbs of the Bushveld Complex, where nearly all the operating platinum mines are situated.
So far, only one mine has been successfully established on the northern limb and that’s Anglo American Platinum’s (Amplats) Mogalakwena open-cast operation. That mine is situated on the highest grade section of the Platreef, on ground that Anglo acquired back in the 1920s.
Friedland’s new company, Ivanplats, which was listed on the Toronto Stock Exchange in October through an initial public offering (IPO) was valued at around C$2.5 billion.
The IPO prospectus noted that: “Two large urban communities and additional smaller communities inhabit portions of the Platreef project… a significant relocation of communities would be required at the company’s expense to enable open-pit mining of the ATS and AMK deposits, which could be prohibitively expensive.”
The prospectus added that certain members of these communities have in the past and may in the future unlawfully and illegally disrupt prospecting or mining operations, as Amplats discovered last year. Further, on instruction from the Department of Mineral Resources (DMR), Ivanplats has agreed to stop making payments under the agreements effective November 1. Ivanplats is currently in negotiations with the community leaders to amend these agreements in accordance with recommendations made by the DMR.
There is a risk of further disruptions from the communities and, while any such disruption would likely be unlawful and entitle the company to seek legal remedies, it may cause delays, which could have a material adverse effect on Ivanplats business, financial condition, results of operations or prospects. Replying to emailed questions, an Ivanplats spokesman tells FORBES AFRICA that the company is now planning an underground mining development and the area of the deposit, that is to be mined, is largely free of development.
“The planned mine would be a highly-mechanized, underground operation accessed through shafts in open ground, designed to have minimal impact on nearby communities.
“Although the Platreef Project still is in the pre-feasibility stage, Ivanplats already has established a presence in communities in the vicinity of its Platreef project through the establishment of community liason offices.”
The Platreef project is one of two big possible developments Ivanplats is considering. The other being the Kamoa Copper Project in the Democratic Republic of Congo (DRC).
Both are at the resource delineation and upgrading stage and there’s no decision yet on which could get the go-ahead first, although the spokesman says that each is being advanced independent of the other.
Regarding the Platreef, the spokesman says Ivanplats plans to apply for a mining right, conduct additional drilling and, subject to approvals, sink an exploration shaft into the deposit this year.
Asked why Ivanplats was investing in South Africa at this point, despite the overwhelmingly negative news flow, the spokesman replied: “The company is very confident of South Africa’s future as one of the continent’s internationally recognized economic leaders… All proposed major new mine developments, by their very nature, must include assessments of longer term outlooks on investment climates and host-nation environments. Ivanplats is not pre-occupied by present views and events, as you term them, for any single nation. There are other, positive, views on opportunities for projected economic and social advances in the future.”
Friedland has made controversial decisions very successfully before, such as with his last venture, Ivanhoe Mines, which developed the huge Oyu Tolgoi Copper Project in Mongolia. That is now controlled by Rio Tinto.
The media shy man is an enigma of sorts. According to his FORBES profile, he attended Reed College in Oregon and studied Sanskrit and Buddhism in India, after graduating with a degree in political science.
This probably accounts for the strange “No comment,” he gave me when I first tried to question him on Ivanplats five years ago at the Cape Town Mining Indaba conference. He inclined his head, made the Indian “Namaste” spiritual greeting sign with his hands and said: “Forgive me but I do not want to talk about it,” before diving into his waiting limousine.
I have heard him speak on several occasions at the Diggers and Dealers Mining conferences in Western Australia as well as at the Mining Indaba.
At his best—such as addressing Diggers and Dealers in the early days of Oyu Tolgoi—he is a spellbinding speaker combining a comprehensive grasp of his subject, with the oratory of a master politician and the conviction of an evangelical preacher.
At his worst—such as the keynote presentation he gave to the Mining Indaba in 2011—he comes across as patronizing, delivering a minimum of information with a maximum of hype and arrogance.
When, on that occasion, I asked him from the floor, why he had given out so little real information his reply was: “I do it to irritate people like you”.
He can also be highly amusing, such as in 2005 when he told Diggers delegates that Ivanhoe faced the ‘Princess Leia’ and ‘Darth Vader’ options in finding a JV partner.
‘Princess Leia’ involved linking up with one of the “better-looking” copper-end users such as Mitsui. While going the ‘Darth Vader’ route meant bringing in a major mining group such as “One of those companies that use letters for their names and want to control the world’s supply”.
He did not have to name Rio Tinto (RTZ); we all got it. But it was at that same conference that another story about Friedland did the rounds, which also drew on a Star Wars analogy.
According to an industry insider, you knew the crucial moment in any negotiation with Friedland had arrived when, “He fixes you with his Jedi mind-$%@* stare”.
Irrespective of how it all works out in the end on the Platreef, this one is going to be interesting and South Africans have a ringside seat for Friedland’s latest venture.

The Spiritual Tycoon  Spies The Prize

“Finally, after a turbulent seven years, we are on the brink of making history,” enthuses Zwelakhe Sisulu, a journalist-turned-magnate who believes manganese will eventually “do for South African mining what gold and diamonds did” back in the heyday.
The chairman of Kudumane Manganese, one of South Africa’s newest mining companies, makes the remark at a time when one of the doyen families of South African mining, the Oppenheimers, is exiting amid plummeting revenues. In November, Nicky Oppenheimer put an abrupt end to his family’s century-old hold on the diamond industry. He sold his 40% stake in De Beers, the world’s leading diamond company, to Anglo American for $5.1 billion.
Sisulu is finding it difficult to contain his excitement. And it’s not because his company is making money, just yet, but because when it does, it will make bucket loads, for thousands of years.
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South Africa is one of the most resource-rich nations on earth, with mineral reserves estimated at more than $2.5 trillion, according to Business Insider. Manganese makes up a big part of that wealth, with the country known to have between 85 and 92% of the world’s high-grade manganese ore reserves. However, there’s something anomalous about how South Africa benefits from world manganese trade. It produces only 15% of the world’s manganese, compared with China, which produces more than 35%, a lower grade at that, and has less than 5% of the world’s manganese reserves and resources.
Most of the country’s reserves are found in the Northern Cape, in part of the Kalahari Basin, a large area covering 2.5 million square kilometers and straddling South Africa, Botswana, Namibia, Angola, Zambia and Zimbabwe. Most famous for having the biggest mineral deposits in the world, the basin is home to diamond, manganese, iron ore, zinc, copper and a host of other minerals. It also has a significant presence of limestone, gypsum, granite, verdite, mica and rose quartz.
South Africa’s new, albeit slow, manganese rush began more than seven years ago when Sisulu’s Kudumane Manganese—as well as several other consortia including Kalagadi Manganese and Tshipi é Ntle Manganese Mining—were granted prospecting rights that were later converted to full mining rights.
Thanks to the country’s policy of Black Economic Empowerment (BEE), the mines became post-apartheid South Africa’s first green fields projects to be commissioned on such a grand scale and with significantly higher local black ownership.
Three years before, the South African parliament adopted the Mineral and Petroleum Resources Development Act in 2002, which compelled all existing mining houses, including world leaders like Anglo American and De Beers, to cede at least 26.1% of their shareholding to blacks as a means to redress apartheid. The government then promised to ensure that henceforth, any new rights issued would be even better for the locals—guarantee them larger stakes, skill greater numbers of indigenous people, encourage innovation and find more sustainable ways of mining.
Collectively, it is estimated that the new mines have enough reserves to last the next 5,000 years. They are all also building sintering plants so they can participate more meaningfully in the mineral’s value chain—something old mines didn’t do much of.
<img decoding="async" loading="lazy" class="alignleft size-medium wp-image-1238" src="/wp-content/uploads/2017/04/Kalagadi-12-07-8213-300x200.jpeg" alt="" width="300" height="200" />
Delighted that theirs are “genuine deals”, Sisulu says “there was a lot of paper shuffling” and complacency in previous mining BEE transactions. “Blacks did not care about running a mine. One thing I’ve learnt is that you’ve got to dirty your hands in this business.” Insisting he’s “not reading a political catechism”, he says the new manganese dispensation has given Africa’s biggest economy “a golden opportunity for genuine ownership of assets by blacks, as well as a genuine rise of black professionals. If you look at gold and platinum mining, they remain exclusively white.”
When FORBES AFRICA talked to the budding oligarchs, they had all achieved critical mass. Some are now readying themselves to transport ore to their customers across the globe, while others are about to go into full production.
But it hasn’t been an easy road.
Over the years, the new miners lost a great deal of time and energy in bun fights over the “arranged marriages” the government forced them to enter into with international partners. None were afforded an opportunity to choose their foreign investors.
“The issue of forced marriages was a serious one,” laments Tshipi é Ntle Manganese Mining chairperson Sakumzi Macozoma, “besides the issue of compatibility, there were issues of investment horizons and simple diligence in doing the work that needed to be done.” He considers himself “lucky, in that our consortium worked well from day one”.
Sisulu admits to having it rough in the beginning, but is now pleased that “reason ultimately prevailed” and the relationship between them and their Japanese strategic equity partners is “working like a charm”.
Daphne Mashile-Nkosi, who heads Kalagadi Manganese, has not been as fortunate. The single-biggest shareholder and chairperson of Kalahari Resources has been in constant disputes with the bigger of her two strategic equity partners, giant steel maker ArcelorMittal International which owns half of Kalagadi. It took a High Court order to force ArcelorMittal to meet a R241.3 million shareholders’ agreement with Kalagadi. ArcelorMittal had expressed unhappiness with the way the business was being run by the local partner, claiming that certain material obligations under the Kalagadi Manganese shareholders agreement had been breached and that corporate governance was found wanting in the mining firm. ArcelorMittal also wanted to appoint a joint CEO. The High Court also ordered the company to pay the costs of the legal proceedings and ruled that ArcelorMittal discharge its financial obligations in the future, pro-rata to its shareholding in Kalagadi Manganese.
<div id="attachment_1235" style="width: 210px" class="wp-caption alignleft"><img aria-describedby="caption-attachment-1235" decoding="async" loading="lazy" class="size-medium wp-image-1235" src="/wp-content/uploads/2017/04/AV_00012786-200x300.jpg" alt="" width="200" height="300" />SOUTH AFRICA &#8211; 6 August 2009: Saki Macozoma is the chairperson of financial institutions STANLIB and Liberty Life, deputy chairman of the Standard Bank of South Africa and a director of the Liberty Group. (Photo by Gallo Images / Financial Mail / Robert Tshabalala)</div>
Other stumbling blocks remain. Transport, over which they have little control, is one of them.
Transporting manganese by road would cost the mines around 75% more than rail, the miners say. But they may not have to go that route, if the government delivers on its promise. After years of shirking its responsibility, the government has finally decided to come to the party.
In February, President Jacob Zuma announced that government-owned transportation utility Transnet would spend R300 billion ($36.7 billion) to increase railway capacity, build and improve port facilities and upgrade fuel pipelines. The plan is specifically aimed at speeding up resource shipments and includes a new railway line to transport 16 million tons of manganese to Coega, a new development zone that’s at the center of the world’s main trade routes, being equidistant from American, European and the Pacific Rim regions.
“It’s going to take time but we are happy it’s finally going to happen. The imponderable here is why did we wait? We knew it had to be done. But it’s not too late,” says Sisulu.
In a country where most leaders of mining consortia are, or were, politically well-connected, some may find it strange that Sisulu and Macozoma would not have been able to do something about the situation they are now finding their companies in.
Zwelakhe Sisulu’s father, Walter, recruited Nelson Mandela to the ruling, 100-year-old, African National Congress. The two went on to become close friends and each other’s confidantes when they were both incarcerated for close to three decades for political activism. When Mandela was released in 1990, Zwelakhe went on to become his press and private secretary.
“No-one would see Madiba if I didn’t want them to see him,” is how Sisulu best describes his role in Mandela’s life at the time.
When Mandela retired from active politics after serving a five-year term as head of state, Macozoma became one of the most powerful men in South Africa. A close confidant of Mandela’s successor, Thabo Mbeki, Macozoma formed the nucleus around whom Mbeki’s inner circle was built. Like Mandela, although much younger, he is also a former Robben Island prisoner.
But transport is not the only challenge the new miners are facing. Across the South African mining industry, output has dropped. Unrest and wildcat strikes have reared their ugly head. And the country is facing stiff competition from fellow African countries like Gabon.
All this is happening at a time when worldwide demand for manganese has slowed. South African Chamber of Mines figures show that primary manganese ore production increased by 57% in 2010 to 7.1 million tons, coinciding with the global economic recovery. Of the total production, 5.9 million tons were exported while 17% was consumed locally. Total sales amounted to R10.6 billion and the industry contributed 1.5% to the country’s total merchandise exports.
Right now the figures are nowhere near there. But when that upward curve comes again, Sisulu says, they will be able to take advantage: “For as long as you produce steel, you are going to need manganese.”
Manganese is widely used for steel production, to give it strength, hardness and durability. The metal’s demand is being driven, in the main, by the infrastructure, transport and other development needs of the world’s nations, especially the most populous and resource-hungry ones, like China, which accounts for half the world’s steel and iron production and consumes 676 million tons a year.
Imara SP analyst Stephen Meintjes says: “Short- to medium-term consolidation is likely until steel prices and consumption turn up again. This might dislodge some high-cost Asian producers facilitating more realistic prices in due course.”
South African manganese will eventually perform to its full potential in the world market, he reckons, and “nothing, except our vexed mining jurisdiction problems” will stand in its way.
Macozoma says: “Conservative estimates of world production of steel, in which manganese is a key ingredient, suggest that, barring the usual economic cycles, is going to be strong for the next 50 years or more. This is based on the urbanization rate in the world, which requires extensive infrastructure.”
So, will manganese be as good as gold, as Sisulu surmises?
“Way too optimistic, something like iron ore, which of course is still very good, maybe,” says Meintjes.
“Manganese is different from gold in that the latter was a store of value worldwide and was viewed as wealth in itself. Manganese is an industrial mineral so it depends on the levels of steel production in the world,” says Macozoma
That said, he quips: “Manganese is not a 20/20 game for South Africa. It is a five-day cricket test.”

The Slow Rush

It was 2001. Billions and billions of dollars were up for grabs in what South Africans call “black economic empowerment” deals. That is, swift deals, selling black South Africans equity, often at a discount, in a bid to redress the imbalances of the past in white-dominated industries like mining. They are worth a fortune and were taking place right under Sipho Nkosi’s nose.
Standing by, while others prosper, is not quite the mark of a man who is ambitious by nature. Growing up, he says, he never thought he would do any job other than that which was the preserve of blacks at the time—being a clerk, teacher, priest or something like that. It took other people to persuade Sipho Nkosi to throw his hat in the ring.
<div id="attachment_430" style="width: 310px" class="wp-caption alignleft"><img aria-describedby="caption-attachment-430" decoding="async" loading="lazy" class="wp-image-430 size-medium" src="/wp-content/uploads/2012/03/AV_00014794-300x200.jpg" alt="" width="300" height="200" />Sipho Nkosi, CEO of Exxaro Coal at Inyanda Coal mine in Witbank, South Africa</div>
Once he made that decision, though, he never looked back. Eleven years later, he is an astute, if not shrewd, captain of industry leading a cash-flush $9 billion conglomerate. To say nothing of the estimated R1.6 billion ($208 million) personal fortune he has amassed in the process.
It all started when Anglo American, the mother and father of mining in Africa, together with Anglo-Australian multinational BHP Billiton—the biggest miner in the world—put some of their South African coal assets up for sale.
Having occupied some of the most senior positions a black person could occupy at both companies, at the time, Nkosi thought he was the ideal person to lead a consortium, a diverse group that included some of the best black brains in mining, among them the country’s foremost nuclear physicists, geologists and mining engineers.
Months later, Eyesizwe Coal—Nkosi’s company—would win an open tender for an assortment of underground and open cast coal operations.
The consortium would quickly raise R600 million ($78 million) for the business, but as Nkosi and the company would soon discover, raising money was only the beginning.
The hard part would come when he had to appease disbelievers, including “rebel” white workers and their “skeptical” black counterparts.
“They all thought black folk, no matter how educated, would find it extremely difficult, if not impossible, to run a mining company,” says Nkosi.
The FORBES AFRICA team meets media-shy Nkosi in his makeshift office, at the Mining Indaba in Cape Town. More than 7,000 delegates, including the richest and most famous names in mining, are here for the annual gathering, where major decisions are made.  In between deal-making meetings and the consideration of proposals from prospective suppliers, Nkosi recalls how he got here.
He still vividly remembers Eyesizwe’s first strategy session, after taking over the Anglo-Billiton assets. He was chairing the company’s SWOT analysis session when one of the (white) mine managers stood up and said: “Sir, with all due respect, you guys know nothing about mining. We suggest that you go to Johannesburg and allow us to run the mine for you.”
It was the first time in the new environment, that Nkosi’s trademark calmness was put to the test. While his partners thought the white guy needed to be reminded of who was the boss now, Nkosi didn’t think it was the time, or the occasion, to take offense. So he didn’t.
Months later, at a year-end function, Nkosi was standing next to a (white) CEO of one of the vendor companies when a (black) worker approached, proceeded to greet the other CEO and asked him: “How could you give this business to these guys? What do they know?”
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In both instances he didn’t take offense, but said to himself: “My job is to win these people over. I will focus on excellence. All the time.”
Nkosi first silenced his critics in 2006 when, a mere five years into the challenge, he was one of the chief architects of the successful merger of Eyesizwe Coal with Kumba Resources’ non-iron ore assets to form Exxaro. The transaction was hailed as the deal of the year, singled out for being head and shoulders above the rest in terms of black management participation, the level of economic interest held by black people, as well as the extent of voting rights held by black people.
The following year, Nkosi took over the running of the merged entity and, five years on, it is not only the second largest coal producer in South Africa but also the biggest diversified domestic mining company in the country. Yet Nkosi is still not satisfied.
He now wants Exxaro to be up there with the world’s mining greats: Rio Tinto; BHP Billiton; Xstrata and the Anglo Americans of this world.
Ambitious as he admits all this is, he wants to start by growing Exxaro—which already has a presence in the continents of Europe, America, Asia and Africa—into a $20 billion market cap world player by 2020.
He already has shareholder approval for spending R9.5 billion ($1.2 billion) on a mine in Limpopo, in the north of South Africa. The Grootegeluk mine will supply over 14 million tons of coal a year to Medupi, a new coal-fired power station being built by the country’s electricity utility, Eskom, in response to the electricity shortages of recent years.  That’s apart from another R2.4 billion ($313 million) power station project in South Africa’s east coast province of KwaZulu-Natal, as well as a handful of beneficiation projects and new coal mines.
Nkosi wants to double Exxaro’s coal output to 80 million tons a year, while increasing the company’s portfolio of non-coal interests.
In January, Exxaro announced that it intended to pay $338 million in cash for a takeover of Democratic Republic of Congo iron ore company, African Iron.
Suggested to him that he seems to be moving, well… rather aggressively, he quickly retorts: “I used to have a boss, (former Kumba Resources CEO) Con Fauconnier, who used to say ‘Sipho, don’t ever grow yourself to death. At the end of the day you must cut your cloth to fit you.’”
Nkosi, it would seem, has indeed taken Fauconnier’s advice. Last year he closed down the company’s zinc plant, Zincor.
“It was not making money at all,” he says. The unions, and the government, were not impressed.
South Africa-based mining research company Avior’s senior analyst, Clinton Duncan, is one of those who believe that Exxaro is in fact “undervalued” and is “bullish” in terms of its share performance. Hence, he doesn’t think Nkosi will have a problem fulfilling his driving ambition.
Coal accounts for 33% of Exxaro’s earnings, the analyst points out. Nkosi’s battle plan, on the other hand, includes doubling Exxaro’s coal output to 80 million tons a year—a good move, Duncan says, considering the fact that about 77% if South Africa’s primary energy needs are provided by coal.
The day after our interview, Susan Shabangu, South Africa’s minister of mineral resources, announced that coal was a strategic resource for the country and that the government would do everything in its power to help its miners. Days later the president of South Africa, Jacob Zuma, announced a range of support initiatives his government had come up with, including the provision of rail transport connecting coal fields to power stations.
Add to that the fact that populous nations like India and China’s ever-increasing energy demands are going to continue for some time, and you will certainly realize that Nkosi’s plan makes a lot of sense, says Duncan.
But what about environmental concerns, I ask? Put to him that the marked rise in environmental awareness and activism, across the globe, could restrict the world’s use of coal, Nkosi responds: “We know that at some point the world is going to insist on clean energy.”
So what’s the plan?
Exxaro’s venture into solar, wind and methane gas was only a matter of time, he says, although all he’s prepared to disclose, for now, that the outcome of the company’s commissioned feasibility studies into the possibility of Exxaro setting up renewable energy companies has pointed in one direction: that Exxaro would be able to “make huge sums of money in renewables”.
“By the way, South Africa’s search for alternatives started a long time ago,” Nkosi says, relating the story of how, back in the seventies when faced with an oil crisis, the country started manufacturing oil from gas. Worldwide too, mining has been constantly evolving, he adds, citing examples of countries like Japan and France, which had long started moving away from coal to gas.
Looking into alternatives, though, does not mean Exxaro will abandon coal anytime soon, Nkosi says: “South Africa will, for all intents and purposes, continue to use coal. We don’t have gas. We have coal in abundance, and it’s cheap.”
Reminded of recent incidents where Greenpeace activists upped the ante with Eskom and mounted a campaign against the electricity utility, Nkosi is unperturbed. Exxaro is hard at work trying to find environmentally friendlier ways of mining and utilizing coal, he says calmly, insisting the business was working hard at ensuring that it was carbon neutral and would be able to mitigate its carbon footprint.
It’s all part of Exxaro’s commitment to doing business differently; by showing that it cares as much about profits as it cares about its people and the environment.
In December, Exxaro paid out R1 billion ($130.5 million) in bonuses to 9,694 members of its staff, 90% of whom were black low-level workers and managers. The employees were rewarded because they “worked very hard and pushed the company to where it is today”, Nkosi said at the time, adding that the company wanted to debunk the myth that “the fat cats at the top” only cared about making money for themselves.
Frans Baleni, the general secretary of South Africa’s National Union of Mineworkers, is at the head of South Africa’s most powerful union with hundreds of thousands of members, which has had many industrial disputes with Exarro. He says there aren’t many captains of industry out there who are able to stay true to themselves and be as mature, tactful and down to earth as Nkosi.
“You can’t fault him on that,” Baleni says, “unlike other mining bosses who can be abusive, arrogant and self-absorbed”.
“Nkosi makes you wonder whether you are not the one who is wrong—even when you know you are so right. Even when he says go to hell, he says it in such a manner that it doesn’t hurt,” says Baleni.
Nkosi is not so gentle about saying it in a gentle manner when it comes to the belligerent pro-nationalization lobby that is the ANC Youth League. When Nkosi once commented that nationalization was “antiquated” and “discredited”, the governing party’s youth was very hurt, publicly berating him for his “misleading, pathetic” lies. But Nkosi, who was president of the Chamber of Mines of South Africa at the time, took the rebuke in his stride.
If it so happens that he crosses paths with the youngsters again, he would still tell them.
It has got a lot to do with his mantra, the one that carried him through those first days, weeks and months of his foray into the tough life at the top of mining, where reputations can be lacerated in the board room.
“People had quite a lot of nasty things to say about this Zulu boy who knows nothing about this industry,” says Nkosi.
“When there’s negativism, always kill it by massive success.”
And there are few companies on the African continent that can claim to be as massive and successful as Exxaro.

Tag: Anglo American

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