‘Force giants to step up to BEE plate’
MUCH has been said about the economic emancipation of South Africa after decades of oppression.
And much of the spotlight has been cast on the bedrock of our economy: South Africa’s mineral wealth and the exploitation thereof.
One cannot overstate the ghastliness of the role that mining played in establishing and entrenching the abhorrent apartheid system.
However, we appear to have relegated to the background the parallel role that economic apartheid played — on the back of colonialism — in defining South Africa’s economic future.
White-on-white subsidisation helped create local monoliths, some of which became multinational companies listed abroad.
A case in point is the rise of Afrikaner-led mining house Gencor, the product of a merger in 1980 between industry heavyweights General Mining and Finance Corporation and Union Corporation, both of which were founded in the late 1800s and were steeped in early South African mining history.
Fast forward to the watershed ’60s when the country became a republic, with parliament passing legislation that discriminated against black South Africans and the introduction of a new form of transformation — Afrikaner economic empowerment, if you like.
And when the small-time Afrikaner-dominated mining company Federale Mynbou took control of General Mining, it was Anglo American, led by Harry Oppenheimer, that lent a “helping hand”.
Much has been written to the effect that this was Oppenheimer’s way of heading off the Afrikaner-led government policy of separating white English-speaking people from the Afrikaners, but some historians contend that it was the government, in unison with the Afrikaner business community, that forced him to part with a chunk of Anglo’s wealth. If so, it was a canny move. There was no talk of vanilla, senior or mezzanine debt to underlie the deal. Nor was there much intimation of profits being withheld to pay off debt over an extended period — a familiar status quo engulfing economic transformation deals today.
With Oppenheimer on board, Federale Mynbou made its move, Anglo American taking a minority interest. The next quick step was to merge both entities, with Federale Mynbou taking effective control.
The merger created Federale Mynbou/General Mining – a company Afrikaners believed rivalled Anglo American.
The new mining house was a dominant producer in uranium, gold and coal, and had interests in asbestos, platinum, copper and oil. It went through a few transformations until its demise in 1980.
Union Corporation followed a similar path, accumulating, developing and growing a staggering number of mining assets, including gold, uranium, platinum (Impala Platinum) and mineral sands (Richards Bay Minerals). Its industrial and manufacturing interests included Sappi (which it founded), Kohler, Haggie and Kanhym.
The takeover of Union Corporation began in the ’70s and was finally consummated in 1980, by which time it was clear that the future growth of the company (and the fortunes of its shareholders) were dependent on a close alliance with the now very powerful Nationalist Party and the Afrikaner business bloc.
Afrikaner-led heavyweights Rembrandt and Sanlam were then major shareholders in the merged entity.
The now Afrikaner-led and -owned Gencor flexed its muscles while under the watchful gaze and protection of the government. TRANSFORMATION MODEL: Anglo American chairman Sir Ernest Oppenheimer leads a tour by members of the British royal family at the Big Hole in Kimberley in 1947
It grew its interests, acquiring a controlling stake in Samancor and beating off competition for the ferrochrome producer from Anglo American and, interestingly enough, from government.
A tumultuous period followed with management upheaval, boardroom battles, economic downturns and the global censure of apartheid censure culminating in the appointment of Derek Keys, who was to become finance minister, to steer the ship.
Keys promptly split Gencor into separate mining and manufacturing companies, which led to the formation of Engen and acquisition of Alusaf, Soekor, Mossgas and Saiccor. Genmin, the mining company, controlled 60 operations in gold, coal, platinum, chrome and manganese. A vast empire indeed.
Keys was succeeded by Brian Gilbertson, who set about completing his predecessor’s work by divesting the company of its major interests, with most being listed separately. He bought Billiton from Royal Dutch Shell and set about creating a new vehicle.
Under the cover of an evolving new democratic order, Gilbertson and Billiton were allowed to flee the South African coop and seek a London address.
A few notable South African companies followed through the open door. This was a precursor to the formation of BHP Billiton. The rest, they say, is history. White, English-speaking people and Afrikaners benefited immensely from the exploitation and enslavement of the black majority. Government policies and laws that favoured their advancement helped white South Africans lay claim to the vast riches of our country.
Today, economic emancipation of the previously disadvantaged is blocked by the beneficiaries of apartheid.
Why is it that we do not do today what was done then?
Dube is chairman of Southend Mining. The 24-year mining veteran writes in his personal capacity
Anglo lent Afrikaner economic empowerment a helping hand