By Stephen Bell
PERTH, Australia--South Africa's mining minister wants
black-empowerment groups to have a bigger stake in BHP Billiton
Ltd.'s (BHP) assets in the country, which are being spun off into a
new company that will have a listing on the Johannesburg stock
exchange.
"We're in the process of negotiating the actual nature of the
demerger with them," Ngoako Ramatlhodi, South Africa's Mineral
Resources Minister, told reporters on the sidelines of a conference
in the Australian city of Perth.
BHP owns aluminum, coal and manganese assets in South Africa,
but plans to house them in a newly created company that will also
include mining assets in Colombia and Australia. If the talks with
BHP are successful, South Africa would increase black economic
empowerment ownership of these mining assets.
South Africa introduced the black economic empowerment program
in 2003, some years after the fall of apartheid, in an effort to
improve the socioeconomic standing of the majority black
population. BEE, as the policy is widely known, reaches across
industries, compelling domestic and multinational companies
operating in South Africa to meet such benchmarks as black
ownership, skills training and development in poor communities.
Under South African law, the BEE ownership level stands at 26%
of mineral assets, he said.
"I'd prefer a much bigger stake, because it makes sense to have
the majority [of the population] participating. The black people of
South Africa have been excluded from the economy for centuries,"
Mr. Ramatlhodi said.
"When somebody pulls out of that economy, they must bear in mind
there are indigenous people there who have a meaningful stake, so
it gives you an opportunity to transform the industry."
On Aug. 19, BHP said the new company would be based in Perth,
and would have a primary listing on the Australian Securities
Exchange and a secondary listing in Johannesburg. The separation
would allow it to focus on producing iron ore, coal, copper and
petroleum, while giving it flexibility to pay out higher dividends
to shareholders.
In a statement Wednesday, BHP said its South African assets are
empowered in accordance with local mining law.
The new company would continue to support South Africa's
transformation agenda, honour all existing empowerment obligations,
and continue engaging with the department of mineral resources, BHP
said.
BHP Billiton wants to complete the spinoff of the new company in
the first half of next year.
--Rhiannon Hoyle in Melbourne contributed to this article.
-Write to Stephen Bell at stephen.bell@wsj.com
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