Mineral sands producer Richards Bay Minerals (RBM) and its shareholders, Rio Tinto and BHP Billiton, have completed reportedly the largest broad-based black economic-empowerment (BBBEE) transaction in KwaZulu-Natal to date.

The transaction entails the sale of a 24% equity interest in RBM to Blue Horison Investments. In addition, RBM employees will hold 2% of the equity in RBM through an employee share participation scheme (ESPS).

Blue Horison comprises a group of seven separate business consortia, which will be joined by the four communities that surround RBM’s operations. The seven business consortia together hold 55% of the equity in Blue Horison. The Sokhulu, Dube, Mbonambi and Mkhwanazi communities, which have a combined population of more than 140 000 people, will hold the remaining 45% of the equity in Blue Horison. All RBM’s permanent employees, the majority of whom are historically disadvantaged South Africans, will participate in the equity through the ESPS.

Blue Horison chairperson Johannes Magwaza comments that the company is delighted that the transaction is finally completed. “The inclusion of the host communities and the employees of RBM makes this deal great in its empowerment of the historically disadvantaged people of KwaZulu-Natal. We look forward to making a positive contribution in the business of RBM.”

RBM has committed to paying each of the host communities a one-off endowment of R17,5-mil- lion. These amounts will be paid into each of the communities’ public benefit trusts, which have been specifically established for this transaction.

RBM has submitted its mining conversion application to the Department of Mineral Resources and it is in the process of being assessed by the department.