Press statement: Mokopane Communities in the dark about benefits from Ivanplats’ BBBEE transaction

Press statement: Broad Based Black Economic Empowerment – Mokopane Communities in the dark about benefits from Ivanplats’ BBBEE transaction

Canadian mining giant Ivanhoe Mines has announced that its subsidiary Ivanplats (Pty) Ltd (previously known as Platreef Resources (Pty) Ltd) has finalised a broad-based black economic-empowerment (BBBEE) deal, giving 20 local host communities a 20% interest in its platinum mine in Mokopane.  The community interest will, according to the mine, be held by a community trust. The mine has also affirmed its confidence in the BBBEE transaction and stated that it will contribute significantly to the socioeconomic development and upliftment of the host communities.

Although applauding Ivanhoe's commitment to the empowerment of black historically disadvantaged South Africans, the Mokopane Interested and Affected Communities Committee (MIACC) is in the dark about the potential benefits of the BBBEE transaction and community trust.

MIACC is a voluntary organisation that consists of members of villages that will be directly affected by Ivanplats’ mining project and who ought to be beneficiaries of the community trust. MIACC however has yet to be informed of the details of the BBBEE transaction and has not, despite several requests, been given access to the draft and final versions of the deal. MIACC is accordingly not in a position to agree that the BBEEE transaction, as claimed by Ivanhoe Mines, incorporates direct local community participation through community royalties, rentals and participation in planning, management, implementation and monitoring that is beneficial to the host community.

MIACC has expressed its concerns to Ivanplats and the Department of Mineral Resources, the government department responsible for approving the transaction. At the heart of MIACC’s concerns relating to the BBBEE transaction and the community trust are the following still unanswered questions.

  How the funds of the community trust will be distributed to the communities;

·      Whether the community trust will have a vote in the company’s AGM;

·     Whether or not people who were convicted for crimes such as theft, dishonesty and the like will be allowed to be trustees, bearing in mind the provisions of the Trust Property Control Act;

·    Whether or not the elections of the Trustees and the Trust Advisory Council and the constitution of the community trust complies with the relevant provisions of the Trust Property Control Act;

·      How the community will have control, if any, over the Trustees and the Trust Advisory Council;

·     How individuals and households in the host communities will benefit from the trust. In particular, how the proceeds of the trust will be expended; and

·      The inadequacy of the consultation process leading up to the finalisation of the BBBEE transaction.

Whilst MIACC members, who are historically disadvantaged persons, would welcome a meaningful opportunity to enter the mineral and petroleum industries and to benefit from the exploitation of the nation’s mineral and petroleum resources, they object to what they perceive as the unaccountable manner in which the transaction of the BBBEE deal has proceeded and call for Ivanplats to make the transaction and all its supporting documents available to the affected host communities.

The lack of accountability, responsiveness and transparency in relation to the BBBEE structure is of great concern to MIACC. MIACC believes that Ivanplats and the DMR still have an opportunity to make amends by ensuring that the BBBEE and related processes adhere to the constitutional principles of accountability, responsiveness and openness.

For further comments contact:

Derrick Tsita (Spokesperson of MIACC): 082846198

Osmond Mngomezulu (Attorney at LHR): 073 868 8316

Emma Algotsson (Head: Environmental Rights Programme): 011 339 1960