Investment company Shanduka Resources is confident that it will maintain its long-term commitment and 25,1% share in project house DRA Mineral Projects.

Shanduka MD Rowan Smith explains that the company places its confidence in DRA owing to the company’s sense of ownership and pride in its business operations. “This is evidenced by the fact that a lot of the senior managers hold personal shares in DRA,” adds Smith.

Further, he notes that DRA’s decision not to list on the stock market has added to the company’s stability, coupled with its prudent view on gearing. He explains that although some companies listed on the stock exchange in order to take advan- tage of the market boom, these companies have subsequently observed value erosion owing to the economic downturn.
Meanwhile, Smith explains that the motivation behind finalising Shanduka’s stake in DRA was DRA’s potential to offer Shanduka critical technical skills in its multicommodity resources business interests.

“Shanduka wanted to build a multicommodity resource base and, over the past number of years, the company has seen an increased need for technical skills in this area. It extends beyond only having investments in operating assets in mines. The challenge is to secure a quality skills base in project management and minerals processing,” says Smith.

He points out that it is important to nurture the skills base in the current economic downturn and, therefore, sustain a long-term vision for Shanduka.

The company has subsequently established a close relationship with DRA. Shanduka principal and DRA nonexecutive director Karishma Sewpersad says that the company is involved in monthly meetings with DRA on an ongoing basis. Shanduka assists DRA with its transformational policies and offers guidance on projects for enterprise development and social invest- ment strategies. The aim is to ensure that DRA has a winning black economic-empowerment strategy that is embedded in its broader business strategy.

The Story of Shanduka

Shanduka Resources’ long-term strategy is to build a geographically diverse, multi- commodity, black-owned and -managed resource house. The short-term strategy is initially focused on investments in selected value-chain assets, which will be supported by operational and managerial capabilities in the medium term.

Target sectors, therefore, include mining and exploration, forestry and paper pro- ducts, chemicals, steel and ferrous metals industries.

The company reports that its current resources portfolio comprises investments in companies such as coal-miner Kangra Coal, newsprint paper supplier Mondi Shanduka Newsprint, packaging company Mondi Packaging South Africa, coal-miner Shanduka Coal, gold-miner Barberton Mines, mining holding company Assore, diamond mine Lace Diamond Mine, steel products producer Scaw Metals, DRA and Minopex.

“Shanduka would essentially like to be Africa’s leading multicommodity resources business,” says Smith.

He explains that the company has gone through various stages: Shanduka began as a black economic-empowerment (BEE) investor, taking minority stakes in line with the BEE Charter. These are usually 25% stakes.

However, the company has grown and is fortunate enough to have a capital base to acquire ownership and full control of a number of companies, notes Smith.

Shanduka has investments in a diverse range of industries, and includes sectors such as energy, property, financial services, general industry, and food and beverage.

In other news, Shanduka has given 10,5% of its shares to a female-owned con- sortium, Lilitha Strategic Investments.

Lilitha will invest its resources in edu- cation programmes designed for young women. The essence of the initiative is to start a girl-child trust to educate young women and put them through school.

The consortium will, therefore, focus its social investment activities on the education of girls with members of the consortium volunteering their time and resources to the projects. With the formation of the Lilitha Trust, the consortium started paying the school fees of six girls from Alexandra, in Johannesburg. The learners will also be mentored in a structured programme.

“In the past, most empowerment deals went largely to black men. “We are determined to redress these inequities. I see women as the way forward and the key to continued deeper trans- formation in this country. “The move will also broaden the Shanduka shareholder base and provide gender equality that has true meaning and substance,” concludes Shanduka executive chairperson Cyril Ramaphosa.