BEE Mining News Report

New BBBEE structure to be implemented at copper producer

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“The advantage of an internally funded transaction is that it provides flexibility; there is no encumbrance on BEE shareholders shares and the interest rate charges are generally lower than with an externally funded transaction. A floating interest of 6,87% over the Johannesburg interbank agreed rate would be charged over seven years,” says Mathole.

The new entity will enable new BEE partners to benefit from dividends from the first day. The minimum dividend expected is R7,7-million a year, which is estimated to grow at 5,5% year-on-year. Mathole states that an important aspect of the deal is that, if PC cannot pay out the dividends, PMC has guaranteed that portion of the payouts for communities.

The BBBEE beneficiaries consist of what PMC terms ‘the golden triangle’, which include PMC employees, who will receive a 10% share, the five surrounding communities, which are the Mashishimale, Makhusane, Maseke, Majeje and Selwane communities, which will receive a 10% share, and business entrepreneurs, led by PMC former chairperson George Negota, who will own a 6% share.

“This is a significant deal for PMC because employees will become stakeholders in the company, which will bring in new dynamics as employees will not only work for PMC but co-own it. It is now in their interests to ensure that the mine is successful,” notes Mathole.

However, he adds that there may also be challenges to contend with when the implementation begins to help employees understand the implications and the benefits that the BBBEE deal will have on them on a daily basis.

Extracted from a report by Jessica Hannah