Highveld enters into a BEE transaction
09 April 2009 - 11:37PM
UK Regulatory
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RNS Number : 4508Q
Evraz Group S.A.
09 April 2009
Highveld Enters into a Black Economic Empowerment Transaction
April 9, 2009 - Evraz Group (LSE: EVR) ("Evraz" or the "Company") announces that
its South African subsidiary, Highveld Steel and Vanadium Corporation Ltd.
("Highveld") concluded an agreement to transfer 26% of the ordinary equity
interest in Mapochs Mine (Proprietary) Limited ("Mapochs Newco") to local
partners. This agreement is a part of the Black Economic Empowerment (BEE)
government program and was signed in order to comply with South African
legislation for the mining industry.
Mapochs Mine, presently an independently managed division of Highveld, will,
after fulfilment of the conditions described below, be transferred into Mapochs
Newco, a subsidiary of Highveld.
The transaction, which is valued at US$59.8 million, comprises of two parts:
* the sale of a 23% equity interest in Mapochs Newco to Umnotho Iron and Vanadium
(Proprietary) Limited ("Umnotho SPV"), a subsidiary of Umnotho weSizwe Group
(Proprietary) Limited; and
* the transfer of a 3% equity interest in Mapochs Newco to the Mapochs Mine
Community Trust ("the Community Trust").
The parties have agreed on share disposal restrictions and certain empowerment
status undertakings to secure mutual interests in Mapochs Mine, the BEE
transaction and the conversion of Highveld's old order mining rights in respect
of the Mapochs Mine.
The BEE transaction is subject to certain conditions, including the conversion
of the old order mining rights and the consent of the Minister of Minerals and
Energy for the transfer of the converted new order right to Mapochs Newco. The
effective date of the BEE transaction will be the later of 1 July 2010 and the
last business day of the calendar month in which the conditions above are
fulfilled.
* * *
About Black Economic Empowerment
Black Economic Empowerment (BEE) is a program launched by the South African
government to redress the inequalities of Apartheid by giving previously
disadvantaged groups economic opportunities previously not available to them. It
includes measures such as employment equity, skills development, ownership,
management, socio-economic development and preferential procurement.
About Mapochs Mine
Mapochs Mine produces lumpy titaniferous magnetite ore, which is supplied
exclusively to Highveld's steelworks, and fines ore, which is supplied
exclusively to Vanchem Vanadium Products (Proprietary) Limited for the
production of a variety of vanadium products.
About Highveld
Highveld Steel and Vanadium Corporation Limited (Highveld) is an integrated
mining, vanadium, and steel producer. It is South Africa's second-largest steel
maker and a leading vanadium-slag supplier. Highveld is the primary producer of
medium and heavy structural sections and thick plate in South Africa. Evraz
holds an 85% equity stake in Highveld.
About Umnotho weSizwe
Umnotho weSizwe Group (Proprietary) Limited is a BEE investment holding company
with interests in the mining and minerals sector, with strong, proven mining
experience and expertise. The company has been active in the resource sector
since its formation in 1997. Its investments span the platinum, diamond, coal,
chrome and oil and gas sectors, amongst others. The group is a manger and
developer of its own projects and holds a variety of mining and exploration
rights in both base and precious metals, which it is in the process of
exploiting.
About Mapochs Mine Community Trust
The Community Trust was established by Highveld in order to enable the
communities surrounding the Mapochs Mine to benefit from the broad-based
socio-economic empowerment ownership initiatives of Highveld. With a key focus
on upliftment and contribution towards socio-economic development, the
beneficiaries of the Community Trust will include people from the community
surrounding the Mapochs Mine, Roossenekal and other major labour-sending areas
to Mapochs Mine.
###
For further information:
Evraz Group
Investor Relations
Alexander Boreyko
Tel: +7 495 232 1370
IR@evraz.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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