WASHINGTON D.C., February 13, 2004-
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, today signed an agreement to provide the SA Rand equivalent of US$28 million in mezzanine loan financing to support the largest black economic empowerment (BEE) transaction in South Africa to date. Mvelaphanda Resources Limited, through a wholly owned subsidiary, is to acquire a 15 percent beneficial interest in the South African gold mining assets and business operations of Gold Fields Limited for a consideration of ZAR4.1 billion (approximately US$590 million).
The South African Government, in consultation with the players in the mining industry, is committed to the transformation of the ownership profile of the mining industry through the implementation of the new Mining Charter and its annexed Scorecard. Such a transformation will contribute towards reducing income inequality in South Africa and raising participation by the black population in the mining sector. The Government has set a target of achieving 15 percent ownership by historically-disadvantaged South Africans (HDSAs) within 5 years for each mining company (and 26 percent in 10 years). This purchase by Mvelaphanda Resources will be a significant step by Gold Fields towards satisfying one of the key requirements of the Mining Charter.
In addition to financing the purchase, IFC is working to develop a partnership with Gold Fields to maximize the sustainability of its underlying operations. Such a partnership could include the following: supporting small and medium enterprises that have procurement supply contracts with Gold Fields; developing partnerships with Gold Fields on its HIV/AIDS programs; and promoting community development outreach in education, healthcare and agriculture including support for mine-worker sourcing communities within South Africa and neighboring Mozambique.
Ms. Haydee Celaya, IFC director for Africa, said, “This is an innovative, well structured transaction supporting black economic empowerment in South Africa, which promises to set a precedent for such future deals. It is a significant step by Gold Fields to achieve compliance with the ownership requirements of the Mining Charter. We look forward to working with Gold Fields and Mvelaphanda Resources to assist them meet all the social and sustainability goals of the Mining Charter.”
“This is an innovative deal which sets a new standard for the funding of empowerment deals. As a result it has been a complex deal to put to paper and all the credit goes to the large teams of advisors, lawyers and funders who have worked non-stop since the detailed joint cautionary announcement was published on 26 November 2003,” said Mr. Nicholas Holland, Chief Financial Officer at Gold Fields.
Gold Fields is one of the world’s largest producers of gold, with annual attributable gold production of over 4.3 million ounces and mineral reserves of 84 million ounces. It operates mines in South Africa, Australia and Ghana, and has a number of gold and platinum group metals exploration projects around the world. Mvelaphanda Resources is a listed company that is majority owned and controlled by Mvelaphanda Holdings Limited. Mvelaphanda Holdings is a private company formed by Mr. Tokyo Sexwale in 1998. Mvelaphanda Holdings has since become one of South Africa's leading BEE players, with minority investments in over twenty companies across a diverse range of sectors, including property, oil and gas, and financial services.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
