October 23, 2017

Amplats’ R175m community deal: a template for peers?

In recent years, worryingly, the relationship between mining companies and communities which surround their operations has been  deteriorating. The bone of contention has been that mining companies are only interested in exploiting mineral resources with no consideration for community interests. And has Anglo American Platinum (Amplats) created a template which other mining companies can emulate and restore the community’s trust?

Anglo American Platinum (Amplats) and the Mapela Traditional Community (MTC) have signed a settlement agreement. Under the terms of the agreement, R175m will be paid to the latter to settle a number of legacy issues unrelated to the leases. It will provide seed capital for creating sustainable, long-term and diversified growth for the community.

To avoid the fate that befell other community-centred entities, MTC is in the process of establishing a corporate structure to manage its mining, social and commercial interest to benefit the community.

This structure will consist of a controlling trust – the Mapela Trust – the beneficiaries of which are the members of the MTC community; a fully-owned holding company – the MTC Holding Company – and several operating companies to commercialise its investments. African Mining Brief Online learns that the first R90m of the settlement amount has already been paid into the trust account and will be paid over to the MTC when the corporate governance structure – scheduled to be established before end-June 2016 – is in place. A final payment of R85m will follow.

The settlement agreement calls for the establishment of a new framework to regulate and streamline Amplats’ operational wing, Rustenburg Platinum Mines’ (RPM) ongoing relationship with the MTC. This is in line with the company’s commitment to improving the standard of living of members of communities that are impacted and affected by its mining activities. Under the agreement’s terms, RPM will have representation on both the MTC Trust – for a limited period – as well as on operating company level. A number of operating companies are envisaged, including joint ventures and partnerships with other parties, to derive commercial benefit for the community.

The Mapela Trust, which is to be established, will be managed by a board of trustees chaired by its traditional leader, Kgoshi David Kgabagare Langa. The board will include one trustee appointed by the traditional council, one appointed by the council of headmen, two independent trustees, and two trustees elected by the community.

This is similar to the process the Royal Bafokeng Nation (RBN) followed in corporatising its mineral assets under the control and management of Royal Bafokeng Holdings (Pty) Limited (RBH) to actively manage these for the benefit of the RBN.

On the agreement’s significance, Chris Griffith, chief executive officer of Amplats, says: “The Mapela Trust represents an investment into the future of the community, which will significantly impact the quality of life of community members and also presents an opportunity to further advocate the company’s Alchemy vision of supporting sustainable communities around the company’s operations.

On the communities’ behalf, Langa comments: “This agreement will ensure that we see tangible benefits flowing to the community. It is time we reduce our reliance on the mine to create jobs. We should create our own.”

The MTC consists of 42 villages and communities adjacent to Amplats Mogalakwena Mine in Limpopo. The mine leases land from the community for some of its mining activities.

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