Bushveld Minerals Limited (LON:BMN) has completed the sale of a 1% equity interest in South African vanadium producer Vametco to meet the nation's Black Economic Empowerment (BEE) requirements.
Vametco's BEE shareholders – Business Ventures Investments No. 1833 Ltd and Business Ventures Investments No. 973 Ltd – will pay a total cash consideration of 1.78mln South African Rand for the stake, taking their total holding to 26%.
READ: Bushveld Minerals jumps as it strengthens grip on vanadium producer Vametco
The disposal is part of a deal made ahead of Bushveld’s acquisition of Strategic Minerals Corporation (CMS), which owns 75% of Vametco, earlier this month.
The previous owners of SMC had agreed to sell the interest to meet South Africa’s BEE equity requirements that redress the inequalities of Apartheid by giving black citizens economic privileges not available to white people.
Following the disposal, Bushveld's shareholding in Vametco through wholly-owned SMC reduces to 74%.
“Vametco's mining right underpins the value of the operation to Bushveld and this transaction contributes to the security thereof in meeting our licence to operate,” said Bushveld’s chief executive Fortune Mojapelo
"While the transaction consideration, which was agreed between the parties prior to Bushveld's acquisition of SMC, reflects a material discount to value, the significance of the company's compliance with South African mineral laws and the mining charter cannot be overstated."
