Black-owned investment firm AfroCentric Investment Corporation, in which some of the biggest names in South African business are involved, has signed cooperation agreements with diversified mining giant Rio Tinto to partner on African nickel and coal projects, and was looking for further deals in diamonds and platinum, an official said on Tuesday.
Some of these projects could be in production four years from now, AfroCentric founding member Michael Sacks told Mining Weekly Online.
He said that the firm was "already involved with Rio Tinto in coal and nickel", adding that "the platinum and the diamond projects still have certain features that need to be concluded".
AfroCentric agreed to cooperate with the diversified mining giant, currently the target of a proposed BHP Billiton takeover, in late 2006.
"Our relationship with Rio Tinto is excellent, and there is a regular interchange and interaction with their executives," Sacks - also healthcare group Netcare chairperson - said in an interview following the firm's annual general meeting, in Sandton.
"We are not necessarily looking for relationships in mining with anybody else," he added.
Partnership structureSacks was reluctant to outline how AfroCentric's partnership with Rio Tinto was structured, but he did say that the minerals or exploration rights belonged to the bigger firm, with the empowered company participating on an equity basis.
All the projects were greenfields.
"We have facilitated, through our infrastructure, the rights for Rio, so it is Rio who effectively own the rights, but we would be participating in those rights," he stated.
Asked if AfroCentric's participation in the projects would be on an equity basis, Sacks replied "Oh, there's no doubt about that".
"We are long-term players, we are not looking for quick returns, and we are looking for solid secure investment in long-term projects, which is the same philosophy as Rio Tinto."
Next deal nearby“AfroCentric is a diverse investment holding company, and we have been looking at some very interesting propositions in the last year,” he noted, adding that the firm was “very selective with what we do”.
“It is a great pleasure and pride to have the likes of Meyer Kahn’s talent on the board, and an equal privilege to have the likes of Brian Joffe, who is an entrepreneur of great repute, and we have some outstanding empowerment participants in our company, who add immense value."
Kahn is beer giant SABMiller chairperson, and Joffe CEO of diversified conglomerate Bidvest.
“We are looking at several very interesting proposals right now,” Sacks stated, but noted that the firm had rejected more proposals than it had considered.
“We may well be able to conclude something in the next two months or so,” he said.
Returning to AfroCentric’s relationship with Rio Tinto, Mining Weekly Online asked Sacks how this came about.
“We have some common relationships abroad through family of the directors of who had worked with Rio Tinto, and they were looking for an empowerment partner in South Africa,” he explained.
“We were recommended, and we went through a gruelling evaluation process, and I think that they were extremely happy with who we were and what we represented, and hence we concluded the agreement.
“It was a very interesting negotiation, even at top level with Rio Tinto CEO Tom Albanese, who is very aware of AfroCentric, and we work very well with his executives.”