Platinum Deal Sees South Africa's Richest Tribe Get Richer

South Africa’s wealthiest tribe, the Bafokeng, became even richer yesterday with a deal in which they will take control of 9% of Impala Platinum, the world’s second largest platinum producer.

The deal offered by the mine will give the Bafokeng a 30% discount for the shares, which are estimated to be worth 5bn rand (£442m).

The tribe of 300,000 live in the North West Province. Since the end of apartheid in 1994 they have benefited from the rich platinum deposits on their traditional lands.

"This is a watershed transaction for the Royal Bafokeng nation," said Chief Kgosi Leruo Molotlegi, the tribe’s 36th monarch in its 800-year history. "It consolidates our interests in quality mining assets and extends our sphere of influence over the mining activities taking place on our doorstep."

Impala Platinum said the arrangement would bring it into compliance with new legislation requiring mining companies to have 26% of their shares held by black South Africans within 10 years. In addition, Impala will contribute to a development trust to help poor Bafokeng women.

South Africa is flush with "black economic empowerment" deals in which large mining firms and corporations sell substantial shareholdings to well-placed blacks with hefty discounts and highly leveraged financing. Recently the diamond mining group De Beers did a similar deal with top officials from the ruling party, the African National Congress.

The empowerment deals are criticized for enriching a few while South Africa’s black majority remains mired in poverty, although the Bafokeng deal will have 300,000 beneficiaries.