19/07/2008 15:25 - (SA)
Sitting on worthless wealth
Malose Monama
ALL is not well in the Royal Bafokeng Nation (RBN), a rich and progressive rural mining community.
The Bafokeng, a small group of about 300 000, is the only community in South Africa that owns land with rich platinum reserves by title and they have used these rights to acquire multibillion-rands’ worth of equity in leading miners.
For an area so rich, there is very little money in circulation. Many shops at the Bafokeng Plaza stand empty just months before the nearby Royal Bafokeng Sports Palace plays host to the Fifa Confederations Cup next year, a prelude to the 2010 Soccer World Cup.
Ernest Mogopodi, the secretary-general of the Bafokeng Business Association (BBA), told City Press Business this week that Royal Bafokeng Holdings (RBH) has not used its financial muscle to benefit all members of the group.
RBH, the investment arm of the Bafokeng group, is the single largest shareholder in Impala Platinum Holdings (Implats), one of the world’s biggest platinum producers.
RBN’s stake in Implats is worth about R16 billion and its overall investment portfolio is estimated at R30 billion.
“We are supposed to be happy just knowing that we belong to one of Africa’s richest nations (groups),” said Mogopodi.
“Our position as major shareholders in leading mining companies has failed to spark economic activity in the communities.
“In fact we have been reduced to being spectators in the exploitation of our ancestral lands. Our people’s involvement with the mines is as labour,” he said.
Mogopodi and the other more than 100 members of the BBA have for years been trying to position themselves as business partners to the mines, without luck. They have made several representations to the mines for business, to no avail.
They have even attempted to involve the RBH, but that has also not borne any fruit.
Mogopodi said the BBA was now viewed as a treacherous organisation for its persistence in trying to force the mines to procure products and services from local businesses.
“Often you get the impression people view it as treason to have a dissenting view. Rather than for the RBH to earnestly work to ensure that the investee companies do local economic development, those of us campaigning for change are portrayed as troublemakers,” he said.
Local businessman Joseph Motsi said he suspected that the members of the BBA were being sidelined for their outspokenness.
Luka village businessman Sebusi Molefe owns two trucks that are custom-made for work in the mining industry, yet these have mostly been parked. He said he had applied to be on the supplier database of the mines but had not had any luck.
Mogopodi said he had even taken Impala mine officials Daleen Cloete and Stoffel Erasmus to see Molefe’s trucks, with a view to helping him to get a share of the business.
Molefe, who lives a stone’s throw from the mine shafts, said it was painful to see trucks running up and down shipping ore out of the mines while his stood idle.
“I sold my cattle to buy these trucks, but now I regret the decision,” he said. Molefe owns a restaurant in Luka village and is also a successful taxi operator.
Implats spokesperson Ilse Meiring said the company had developed a procurement policy to identify accredited black suppliers in order to encourage their development and to ensure they enjoyed preferential access to tenders.
“A steady increase in procurement with these suppliers has been actively facilitated,” she said.
However, Meiring had not provided City Press Business with the names of such suppliers, as requested, at the time of going to print.
But RBH chief executive officer Niall Caroll said: “We have agreed on a process and timetable with BBA to assist on the issue of procurement. However, we view its leaking of private correspondence as a complete betrayal of trust.”
The leaked private correspondence Caroll was referring to is a letter he sent the BBA in which he concedes there are challenges in local economic development and procurement from black businesses.
In the letter Caroll says there is a clear recognition on the part of all internal and external stakeholders of the importance of helping uplift local businesses through procurement processes. Caroll also identifies the reasons why the locals have struggled to benefit from procurement opportunities in the area.
The reasons range from some influential members in the Bafokeng community keeping opportunities for themselves and their family members, local businesses or individuals acting as fronts for third parties, lack of proper documentation or business plans and no demonstrable expertise in performing the work tendered for.
One of the reasons there was little money in circulation in the area was that RBH does not pay dividends to the Royal Bafokeng’s 300 000 members. It uses the money for social development, putting the nation’s children through school and building schools, roads and clinics.
Recently RBH sought to diversify its resources-heavy investment portfolio and has bought into companies in manufacturing, finance and the services sectors.
The Bafokeng recently pulled off a business coup when they were announced to be the principal empowerment shareholders in the leading cellular communications company, Vodacom.
While they have done well to secure these significant stakes in blue-chip companies, the amassed wealth has not always benefited ordinary Bafokeng.
Phokeng is arguably the most developed village in South Africa in terms of infrastructure, and that goes for the other 28 villages that make up the rest of the Bafokeng community.
Although they are collectively worth at least R30 billion, the Bafokeng are not worth much as individual households. Many live in poverty and they are heavily dependent on social security.
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