About Politicsweb

Gold Fields response to Carte Blanche report on BEE deal

Company says Gayton McKenzie was contracted in an advisory capacity for a number of issues

Gold Fields response to Carte Blanche programme on the South Deep empowerment transaction

Monday, 22 October 2012

Johannesburg, 22 October 2012: Gold Fields wishes to respond to the Carte Blanche programme on the South Deep Black Economic Empowerment Transaction aired on Sunday 21 October 2012 (see here).

The programme was filled with inaccuracies and innuendo and sought to discredit what has been broadly welcomed as a ground-breaking transaction.

Gold Fields would like to emphasise that the mineral rights obtained for South Deep were applied for and granted in accordance with the Mineral Resources and Petroleum Development Act (MPRDA). The DMR approved the application. The company complied with all the appropriate legal requirements in order to be granted the mineral rights.

The South Deep BEE deal was broad based in all aspects, giving a share of the company to employees, communities and a BEE consortium. This included a cross-section of historically disadvantaged South Africans from across the country, including youth, women, affected communities and employees as well as people who had contributed to the successful and peaceful transition of the country. The intent was also to benefit those who typically would not have been part of deals of this nature in the past.

The allegation that Gold Fields employees and communities have not and will not benefit from this transaction is simply not true.

The Employee Share Ownership Plan (ESOP) was created under the deal so that all 47,100 employees at our South African operations at the end of 2010 are now shareholders. No payments for the shares were required and all employees immediately received dividend payments in line with other shareholders. This ensures that they carry no risk and that the deal will remain viable in the long-term.

The employees under the ESOP scheme have so far received R76 million in dividends.

The Company decided that communities should benefit first and foremost and be indirectly represented through two trusts, namely the South Deep Education Trust and the South Deep Community Trust. Importantly the South Deep Education and Community Trusts have and will continue to receive 65% of all distributions made by South Deep, and the BEE participants 35%. The two trusts have received between them around R46-million in dividends and share sale receipts to date and will receive their 65% share of dividends over the next 28 years.

In addition to the benefits under the South Deep transactions, Gold Fields has spent significant amounts on socio-economic development on the West Rand over the past few years. This includes over R184-million on 594 new houses and 168 conversions from hostel rooms to family units as well as R350-million on hostel upgrades for our employees over the past five years.

On education, key spending included, amongst others, around R50-million on building, upgrading and contributing to 44 schools in South Africa and our three-year, R28-million sponsorship of mining faculties at universities. Earlier this year we funded the Simunye Clinic on the West Rand, which is in addition to a range of other initiatives in the public health arena, including training almost 2,000 nurses through our Nursing College over the past 20 years.

The programme also alleged that Gayton McKenzie and Jerome Brauns used their position of influence to place politically-connected individuals in the BEE consortium to influence the awarding of the license. It is critical to note that the South Deep license was awarded before the participants in the BEE consortium were finalised.

Gayton McKenzie Pty Ltd was contracted in an advisory capacity for a number of issues including to compile a list of potential participants that fell within the broad categories of beneficiaries from which we could select. The final decision about the participants was always the prerogative of the Company, and not limited to this pool. Several names were in fact removed from the pool and others added to it.

In conclusion, the South Deep BEE transaction not only met the letter of the mining law, but the spirit and intent of black economic empowerment.

Statement issued by Gold Fields, October 22 2012

Click here to sign up to receive our free daily headline email newsletter