AngloGold Ashanti Ltd. agreed to sell a 1.9 percent stake to black investors and over 30,000 workers, making it the first South African gold producer to involve its own miners in a government program to boost black ownership.
Globally AngloGold lags behind only Denver-based Newmont Mining Inc. in terms of production of the metal.
The transaction, worth $197 million at current prices, will see workers receive 3.84 million new AngloGold shares, one quarter of which will be free and three quarters at a 10 percent discount to the share price, the company said today. Johannesburg-based AngloGold will issue new stock to sell 0.5 percent of its shares to Izingwe Holdings Ltd.
South Africa’s law forces mining companies to sell 26 percent of their assets to the country’s black citizens by 2014 to make amends for discrimination suffered under apartheid rule. Rivals Gold Fields Ltd. and Harmony Gold Mining Co. have sold assets to groups led by prominent black businessmen.
“Black empowerment transactions have gone through an evolution,” Wayne McCurrie, who oversees the equivalent of $5.6 billion including AngloGold shares. “The first phase was joint ventures, the second kind involved high-profile black people. This is the third kind and it’s very good that its going to be broad based.”
About 90 percent of AngloGold’s 35,000 South African workers are classified by the government as “historically disadvantaged,” the company said on Sept. 29. Under South African law, those would include people of mixed race those of Asian descent and women of all races.
South African mines last year accounted for 43 percent of AngloGold’s gold production, or 2.7 million ounces, according to the company’s 2005 annual report.
“I am very committed to ensuring that the poorest people benefit from the application of the charter,” Buyelwa Sonjica, appointed to the post of South Africa’s mines minister in May, said on Aug. 21. “I am committed to ensuring that the ordinary people benefit. That the cake is shared.”
The sale to the workers, overseen by three labor unions, is known as bokamoso, which means ‘harvesting for the future’ in the Setswana language. Each employee will get 30 free shares and 90 loan shares, which be repaid through dividends. They will be distributed in tranches over the next three years.
