South Africa's Bapo community to become shareholder in Lonmin
By Silvia Antonioli LONDON (Reuters) - South Africa's Lonmin has agreed to make a royalty payment in cash and shares to the Bapo community, which will make it a shareholder in Lonmin and will allow the firm to meet South Africa's requirement on Black Economic Empowerment. In exchange for the payment, the Bapo ba Mogale community, which owns land on which Lonmin mines northwest of Johannesburg, will waive its current right to receive royalties from Lonmin's subsidiaries Eastern Platinum Limited and Western Platinum Limited (Lonplats). The Bapo also agreed to sell to Lonmin their Bapo ba Mogale Mining Company, which owns 7.5 percent in the Pandora joint venture. This would make Lonmin, that already holds a 42.5 percent in Pandora, the largest shareholder in the joint venture with rival mining company Anglo American Platinum, which also has a 42.5 percent stake in Pandora. Lonmin said last week it might buy Amplats out of the joint venture. The Bapo will receive a total of 564 million rands ($53.18 million)worth of Lonmin shares and a deferred royalty payment of 20 million rand per year, for the five years following completion of the deal. Lonmin is also setting up a Bapo Trust to which it will transfer some shares in its subsidiaries and is carrying out an employee ownership plan and a community share ownership trust, that will boost its BEE ownership further. All together, these transactions will allow Lonmin to boost the Black Economic Empowerment equity ownership from 18 percent to 26 percent, which is the target the South African government asked companies to meet by the end of 2014.($1 = 10.6050 South African Rand) (Editing by Jason Neely and William Hardy)
