Orion brings in new empowerment partners and senior nonexecutives
Orion plans to have 20% black ownership of the company and a further 10% ownership split between communities and employees
Orion Minerals successfully raised A$8m to finish its bankable feasibility study into restarting the Prieska copper and zinc mine in the Northern Cape, bringing in new empowerment partners and two highly experienced nonexecutive directors.
Orion laid out the plans to have 20% black ownership of the company and a further 10% ownership split between communities and employees as it nears development of the existing mothballed infrastructure and construction of a processing plant at a cost of up to A$390m.
Under the new Mining Charter, mining companies applying for new mining rights are obliged to have 30% black ownership, up from the 26% level in the previous two charters. Orion is expecting the award of its mining right soon.
The transaction would “immediately” satisfy these requirements for black ownership, Orion said.
Orion will complete its bankable study by the end of June and then begin raising the capital needed to bring the project into production.
The empowerment partners have taken up A$4m of the rights issue, while Tembo Capital, the largest Orion shareholder with a 23% stake, has subscribed for A$2m. Other shareholders have followed their rights to make up the balance of the A$8m.
The existing empowerment group which owns 26.7% of the shares in Orion’s subsidiary, Repli Trading, which owns the Prieska project, will swap those shares for a stake in the listed Orion entity.
A new empowerment vehicle called BEE HoldCo will then take up a 20% stake in Repli and they are entitled to fund their proportional stake in the costs of restarting Prieska, which was mined for two decades up to 1991.
Two companies will own BEE HoldCo. These are Black Star Minerals and Kolobe Nala Investment Company.
Black Star, which will own 67% of BEE HoldCo, is 75% held by black women and is headed by Jowell Tobias, a veteran of the Industrial Development Corporation, and Sharon Matthews, an accountant based in Kimberley.
Black Star owns 51% of Gariep Mining and Exploration Services and this would bring “significant technical capacity” to BEE HoldCo, said Orion.
Kolobe, which will hold 33% of BEE HoldCo, is a family-owned business headed by Billy Mawasha, who has extensive mining experience with Anglo American, Rio Tinto, De Beers and AngloGold to name but a few. Until recently he was the country head in SA for Rio Tinto and the MD of Richards Bay Minerals.
As part of its announcements, Orion said Godfrey Gomwe, a former Anglo American executive, and Tom Borman, a former BHP executive, had both joined the board as nonexecutive directors.