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What to do with R34bn?
12/05/2008 13:18 - (SA)
Phokeng - Africa's richest tribe has money problems. It has so much money it doesn't know what to do.
"We've got a capital allocation problem," says Niall Carroll, the man in charge of managing around R34bn in assets on behalf of South Africa's 300 000-strong Royal Bafokeng Nation in North West province. "It's a nice problem to have."
And one that doesn't look set to ease any time soon as platinum - a precious metal used in car manufacturing and jewellery, the world's biggest deposits of which are found on Bafokeng land - continues to fetch near-record prices on the back of tight supply.
Last year, the Bafokeng made about R2bn rand from platinum, including R1.2bn rand in royalties from Impala Platinum (Implats), the second-biggest platinum producer, in which the Bafokeng now have a sizeable stake.
Inspiration and luck
This year, as prices continue to hover around $2 000 dollars an ounce, the Nation is expecting to rake in a further R900m from the metal, while also continuing to grow its income from a portfolio of non-mining investments.
The story of the Bafokeng, part of the Tswana-speaking peoples that also live in Botswana, is one part inspiration, several parts perspiration and a smidgin of luck.
In the late 1800s, Bafokeng Chief Mokgatle sent his young men away to work in the diamond mines to earn money to buy back their land from Boer settlers.
Little did he know then that the 70 000 hectares they retrieved on the Merensky Reef was stuffed with palladium group metals, the best-known of which is platinum.
Although platinum has been mined extensively on Bafokeng land since the 1950s, the nation only began to really cash in on the wealth beneath its feet in the 1990s after winning a lengthy legal battle for royalties against Implats.
Over the past decade, the Royal Bafokeng Administration, headed by Kgosi (king or chief) Leruo Molotlegi, has ploughed R2bn of that money into new roads, schools, clinics and other amenities.
Driving through Phokeng, the difference between it and other rural black communities in South Africa is stark.
Some Mofokeng, as individual Bafokeng are known, still live in tin shacks, but most have built brick houses and rent out the shacks to migrant workers.
New streetlights
The main road through the town has stylish new streetlights, several new roads are being graded and the 40 000-seater stadium built by the community is undergoing an upgrade for the 2010 football World Cup.
Education too is getting a makeover. At Lebone Independent School, a "model school" for the whole province, seven-year-olds are being taught simultaneously in English and Setswana by two teachers for 11 pupils - a luxury even in most private schools.
"It's just such a wonderful story," Carroll says. "In other parts of Africa the king would be siphoning off the money into his personal bank accounts."
But not all Mofokeng agree with how the money is being spent. The nation's strictly no-handouts, long-term-over-short-term approach has its critics.
Rachel Morei, a wizened gap-toothed widow who reckons she's about 80, waves at the shack where she still lives with her six orphaned grandchildren.
"It almost caved in during a recent storm and it leaks when it rains," she says of the crooked corrugated structure that is painted a bright pink against rust.
More improvements
"If they (the Bafokeng administration) could only build me a brick house."
"What concerns me is that you can't see improvements in the lives of ordinary Bafokeng people," says John Capel, head of the Bench Marks Foundation, an ecumenical church group that monitors corporate conduct.
In a report last year on the impact of platinum mining in North West province Bench Marks declared the "richest tribe" status of the Bafokeng a myth, citing high levels of unemployment (over 30%) and the use by nearly all of pit latrines.
A waterborne sewage system is on the cards, the administration insists. It's in the Masterplan - the king's plan for when the platinum runs out in around 30 years.
The plan aims to wean every Bafokeng household off the platinum by 2020, by investing in skills and infrastructure to attract investors, manufacturing and tourists to the area.
But for some, the promise of future riches, when yours is the richest tribe, is too big a question.
"The Masterplan is a pipedream," says Thusi Rappo, an environmental activist and member of a secessionist Bafokeng clan.
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