NIALL CARROLL CEO of Royal Bafokeng Holdings (RBH)

With abundant platinum and platinum-group metal reserves, RBH was formed to manage the region’s valuable resources and to help diversify its commodity profile

ROYAL Bafokeng Resources, originally created to develop and manage the kingdom’s mining-related assets, and the Royal Bafokeng Finance, formed to diversify and stabilize the tribe’s investment income, eventually merged to form Royal Bafokeng Holdings (RBH). Niall Carroll, the company’s CEO, says, “There seemed to be logic in combining the structures to manage the kingdom’s portfolio holistically and form a single investment entity and management team to improve the quality and efficiency of the investment management process.”

RBH’s primary functions include generating sustainable growth of the kingdom’s resources, managing its mining interests, and supervising and expanding its non-mining related interests.

In its effort to bring variety to the Bafokeng’s portfolio, RBH is looking at financial services, infrastructure and telecoms as potential drivers of wealth creation and economic transformation. While Africa is rich in mining resources, the communities surrounding the deposits still need to be developed in terms of roads, power and telecoms. “We believe RBH has the potential to build major pan-African businesses in these fast growing sectors over the next five to ten years”, says Mr. Carroll. It is in these sectors in particular that RBH’s investment objectives, franchise, skills set and asset base are relevant.

In terms of mining, RBH handles all of the Bafokeng’s assets, which include a 35.9 percent shareholding in SA Chrome and Alloys Ltd. and a 50 percent joint venture with Anglo American Platinum in the Bafokeng Rasimone Platinum Mine, where the estimated value for production over the next 40 years ranges from $1.1 billion to $2.2 billion. The Bafokeng also have a 9 percent shareholding in Impala Platinum Holdings Ltd., making them the largest shareholders in the company. About 70 percent of Impala’s income comes from operations on the Royal Bafokeng Nation’s land (RBN), and they pay the Bafokeng a 22 percent royalty.

Reaping the rewards: the RBN has an annual budget of some $25 million, mainly drawn from mining royalties.

RBH is considered to be one of South Africa’s key black empowerment companies in the mining sector, encouraging partners in the industry to open up opportunities to small, medium and micro-sized enterprises (SMMEs) run by the Bafokeng people, while current mining legislation has provided opportunities in the resources sector. RBH gave the SMMEs $4.8 million worth of business to exploit the land themselves.

At the same time, the tribe is looking for other ways to improve the distribution chain of their income stream. Plans for growth and expansion include forging relationships with international business partners in exploration, mining and beneficiation. Mr. Caroll says, “Because of the Broad-Based Black Economic Empowerment (BEE) Initiative in South Africa, many companies are looking to raise the level of black ownership. As a broad-based, black-owned business with good financial resources, RBH is an attractive investor for many companies, which is promising in terms of new partnerships.”

Careful management of the kingdom’s assets should ultimately fund social development programs such as Vision 2020. RBH thus acts as a distribution mechanism for the ethnic group with the goal of improving living conditions by providing adequate facilities for the region and generating employment. Mr. Carroll adds, “Our business directly impacts the well-being of 300,000 individuals. What we do has soul. We want to become the world’s leading community-based investment company, which means we have to make money, but it’s about far more than just the money, it’s about the people.”