Empowerment+venture+kicks+off,+Siyabulela+Qoza,+City+Press

City Press, Johannesburg, 06/05/2006 21:24 - (SA)



 * NEW TEAM**...Lehotsa directors Linda Makatini and Thaba Mufamadi say the ambitions of the new empowerment entrant know no bounds. **Picture: Anton de Ras**

=Empowerment venture kicks off=


 * SIYABULELA QOZA**

THE wheels of transformation turned this week with the launch of investment company, Lehotsa Investment Holdings.

Thaba Mufamadi, who had a colourful career as the Limpopo finance MEC, resources stalwart Barry Davison and Linda Makatini, one of the crafters of the current mining legislation, headline a team that includes Pansy Tlakula, the chief electoral officer of the Independent Electoral Commission.

"We are setting up to look at opportunities in resources, both production and supplies, and any other opportunity that makes sense to us," said Mufamadi, the executive chairperson of Lehotsa. The new entrants will pursue their ambitions via two companies.

Lehotsa Mining Resources will spearhead investment in mines. Other investments will be held via the Lehotsa Investment Company.

The target is listed and non-listed medium-to-large companies.

Prince Booi, director of ratings company EmpowerLogic, said the development was in line with the promotion of new entrants in the empowerment space as advocated by the Codes of Good Practice.

He said he was concerned at the slow pace of agreeing on the guidelines that would govern the transition of people who held influential positions in other spheres to empowerment beneficiaries.

"We must not limit the rights of people to make a living when they change spheres, especially those who are from government.

"But when people with high profiles get together for empowerment, concerns are raised about their influence in areas they come from," he said.

Mufamadi said the country was seized with the debate about balancing the movement.

"It is not bad to have a penetration of ideas from one side to the other. Younger politicians need to be able to find something else to do after politics and young business people can have political ambitions. The key is not to wear two caps at the same time," he said.

Mufamadi said economic transformation had lagged behind the political one because there were not enough activists and thinkers on the private sector's side.

Davison, who is Anglo Platinum chairperson, said their dealings would be done in accordance with the highest governance standards. He said Lehotsa would only pursue opportunities in platinum in association with Anglo American at Anglo's discretion.

Mufamadi said the company would look at new mines and the expansion of existing ones. They would also look at partnering with companies that supply services to the big mines.

Davison admitted they may have come late to the party for big mining transactions.

"The easy pickings are taken. Besides, it will be a very brave person who would pursue transactions with the large companies given the prices of resources. We can create more value from newer operations."

Makatini said the minerals and energy department had made it easier for new entrants to acquire prospecting and mining rights. She conceded that access to finance was still a big challenge.

She added the consortium was comfortable sharing empowerment space with other players.

"We have spoken to a number of people and are convinced this venture can fly."

Booi said new entrants had a chance of success because the empowerment space is broad.

The Lehotsa directors said they hoped to conclude deals as early as this year. The company does not have its own capital to finance transactions but will raise funds for each deal they conclude.

"We are familiar with the financial engineering required to structure empowerment deals and with the types of packages financiers offer. We should be able to conclude structures that will give the transactions the best chance of being sustainable," said Davison.

As of now though, the partners have to finance the running of the company out of their own pockets, but this is not uncommon for new businesses.


 * From: http://www.news24.com/City_Press/Finance/0,,186-246_1928390,00.html**

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