“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.
<img loading="lazy" decoding="async" class="alignleft size-medium wp-image-1237" src="/wp-content/uploads/2017/04/Kalagadi-12-4-2812-300x200.jpg" alt="" width="300" height="200" />
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.
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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 loading="lazy" decoding="async" aria-describedby="caption-attachment-1235" 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 a golden childhood for Nonkululeko Gobodo in the natural beauty of South Africa’s Transkei amid the love and encouragement of successful business-owning parents. While her school friends played in the sun, Gobodo spent countless hours poring over the books of the family business. Her father wanted her to be a doctor; her love was numbers and the catalyst was just around the corner.
One clear Transkei morning, a group of black auditors came to look over the books. They were working for Wiseman Nkuhlu, who in 1977, became the first black South African to qualify as a chartered accountant. This was rare in apartheid South Africa, where education and professions were the preserve of whites.
On that day, Gobodo decided that was what she wanted to do for the rest of her life and went to break the news to her father. He asked her what the highest attainable level of education in the field was and said: “That is what you will do.”
“My father always wanted his children to be free-thinkers,” she remembers.
There was no stopping Gobodo after that. She tore through her education and became South Africa’s first black woman chartered accountant in 1987.
Gobodo landed her first job at KPMG fairly easily, but working was far from easy. In those days, the big clients were reserved for her white, male colleagues. It meant she had to persuade her bosses to give her a chance.
More than 20 years later, Gobodo chuckles with embarrassment as she tells of a senior, white, male colleague who had to resign after she had taken every client in his portfolio. It led to the company offering Gobodo a partnership, but she turned it down to start her own practice. It wasn’t easy. One of her first clients, an Afrikaner at the Bank of Transkei, told her to get out because he was not prepared to do business with her. The next day he refused to see her. On the third day, Gobodo walked into the man’s office, closed the door behind her and demanded that he speak with her. He did.
There were many other difficulties. Although her practice grew, black-run businesses were still very much excluded from the lucrative, largely white-run private sector. Most of these fledgling firms leaned heavily on government business.
It didn’t stop Gobodo and she prospered on the way to overseeing a merger to create Sizwe Ntsaluba Gobodo, South Africa’s largest black-owned auditing firm, of which she is the executive chair.
Gobodo sees her employees struggle with the same battles she endured decades ago. Surprisingly, she claims that women are reluctant to step up to the plate. They want flexible hours, in order to be able to make their home and children a priority; they’d rather do consulting, on the side, than pioneer big projects to put themselves in line for a promotion. They don’t seem to be able to make the sacrifices she once made, she says.
Her calm exterior is shaken for a moment. Gobodo pauses, looking pensive as she tells of having to leave her one-month-old child at home in order to prove her mettle at work.
“Humanity needs to go back to the drawing board,” she says.
“Raising future leaders is a responsibility; it is important to add value to the lives of others as we rise.”
Dressed in a sunshine yellow jacket, with a smile that could power a small town, Gobodo doesn’t appear the iron-fisted maiden she clearly must have been to make it in the often treacherous corporate world.
“I’ve had skirmishes where people have tried to undermine my leadership, but I’ve also put them in their place, and they’ll never forget it&#8230; they never forget it,” she emphasizes.
We’ll take her word for it.
<h4>Biography</h4>
Born on October 10, 1960, Gobodo started her career as a junior lecturer at the then University of Transkei, now Walter Sisulu University.
She left to begin her articles with KPMG in the Mthatha office. She joined the Transkei Development Corporation (TDC) as senior manager of finance. She left TDC in 1992 to start an accounting practice. She had a vision to start a medium-sized black accounting firm, as opportunities opened up after the 1994 elections, and founded Gobodo Inc with a group of partners in 1996.
“The accounting profession needs another big player other than the big four (Deloitte, PwC, KPMG and Ernst &amp; Young). We intend multiplying the firm in terms of number of staff and revenue within a short space of time. It will be the new house for black professionals.”
&#8211; Nonkululeko Gobodo, April 14, 2011, announcing the merger to form her present company
<h4>She has won awards too</h4>
Cape Town, 17 May 2012: Two South African women took top honors at the prestigious Oliver Empowerment Awards, as they were named the Top Black Business Leader of the Year and the Top Black Entrepreneur of the Year.
Nonkululeko Gobodo, South Africa’s first black, woman chartered accountant walked off with Top Black Business Leader of the Year and Sibongile Maseko, founder of Bongi-M Construction, received the Top Entrepreneur of the Year accolade.

Woman Are Not Stepping Up To The Plate

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 loading="lazy" decoding="async" aria-describedby="caption-attachment-430" 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: Black-owned

FORBES AFRICA SOCIAL MEDIA

The Slow Rush

Woman Are Not Stepping Up To The Plate

I Want $20 Billion And The World By 2020