Mining giant De Beers has sold a 26 percent equity stake in its South African mining operations to a black-owned consortium.
The deal will see De Beers meet the government's so-called black economic empowerment targets nine years ahead of schedule. In terms of the targets, blacks must own one-quarter of traditionally white-owned mining houses by 2014, either in direct ownership, as shareholders or as corporate partners.
In the current deal, a new company known as Ponahalo, representing a broad group of individuals, investment groups, and De Beers workers and retirees will acquire 26 percent of De Beers Consolidated Mining for $562 million.
Ownership of Ponahalo is divided equally between the worker-retiree group and the outside investors; representing a race-gender break down of 90 percent black, and 29 percent female.
The deal has been welcomed by Minerals and Energy Minister Lindiwe Hendricks, who was present at the announcement. She said she was pleased that it did not, in her words, include "the usual suspects", and that the new black owners, were "new faces, straight from the box."
Ms. Hendriks and President Thabo Mbeki are among many South Africans who have become increasingly critical of black empowerment deals over recent years, charging that the same small group of individuals benefit over and over again. They say this has resulted in a small super-rich black elite, and add that the deals rarely benefit the poor.
De Beer's Consolidated Mining general manager, Jonathan Oppenheimer, says that all parties have much work to ensure that the deal does benefit black communities.
"And then there is engaging both with our employees, with their representatives, most importantly with the National Union of Mine Workers, and then Manne [Depico, CEO of Ponahalo] and his team are going to engage with for example, the premies [premiers] of the provinces in which De Beers has operations to determine how to best benefit those communities," said Jonathan Oppenheimer.
De Beers was founded in 1888 by Cecil John Rhodes, a British South African politician, financier, and colonist who once aimed to extend British influence from the Cape of Good Hope to Cairo. In time, De Beers came to be owned by his partner Ernest Oppenheimer and until a few years ago was controlled by succeeding generations of the family.