Rössing shareholder’s Gupta loan

By Elvis Muraranganda

A Confidente investigation has revealed how Rössing Ura­nium shareholder, South Africa’s Industrial Development Corporation (IDC), which owns 10 percent of the Namibian mine, is at the centre of unfolding storm in the neighbouring country, after lending N$250 million to the polit­ically-connected Indian family, the Guptas, who are being accused of so-called State capture.
It has emerged that the IDC availed the money to the Guptas in 2010, to buy Shiva Uranium in South Africa, which was 90 percent of the purchase price. However, no other media, both local and foreign, has reported on the 44-year-old fi­nancial link between the IDC and Rössing.
For the period, 2008 to 2016 alone, the IDC benefited to the tune of over N$320 million from Rössing dividends. However, this is only the tip of the four decades long iceberg.
It has emerged during a Confiden­te investigation that the IDC, which is a State-owned development fi­nance institution, whose mandate is to drive industrial development, has been boosting its financing devel­opmental projects in South Africa with potentially billions of Namibi­an dollars, through dividends being paid by Rössing, since the inception of the mine in 1973.
Gupta storm
The Guptas bought Shiva Urani­um, with the N$250 million IDC loan, together with a few African National Congress (ANC) aligned black economic empowerment mi­nority shareholders, including Pres­ident Jacob Zuma’s son, Duduzane.
The mine was bought for the Gupta company, Oakbay Resources and Energy.
The Guptas allegedly got Shiva Uranium for a steal, which repre­sented a loss of about US$242 mil­lion for the previous owners, a Ca­nadian company called Uranium One that had mothballed it, because it couldn’t mine it profitably.
The IDC loan was due to be re­paid in April 2013, with interest amounting to a total payment worth more than R450 million, but Oak­bay defaulted, according to recent South African media reports.
The IDC then agreed to write off the loan, plus interest, in exchange for a 3.7 percent shareholding in Oakbay.
Interestingly, the Guptas and Du­duzane purchased Shiva Uranium around the time that country’s gov­ernment and the ruling ANC adopt­ed a policy of increasing nuclear en­ergy by 9 600MW, to address South Africa’s energy needs. This placed them in pole position to benefit from an envisaged Russian nuclear deal, which would potentially see uranium-fuelled power stations be­ing built around the country.
South African media has been running hordes of articles on how the Guptas have allegedly captured the State.
The #GuptaLeaks emails, which are currently making headlines in South Africa, are telling the story of how a shadow government, linked to the Guptas, is allegedly using Cabinet ministers and parastatal heads to funnel billions of State ten­ders to Duduzane and the Indian family.
Ironically, former Eskom Chief Executive Officer, Brian Molefe, who is at the centre of State capture allegations, is also a former board member of the IDC, from which he resigned in January this year.
This is the same IDC that has been raking in Rössing dividends, and which financed the Guptas’ Shi­va Uranium mine deal.
For the period, 2008 to 2016 alone, for which data could be traced through the Confidente in­vestigation, the IDC benefited to the tune of over N$320 million from dividends from Rössing.
Meanwhile, the Namibian gov­ernment has received a mere N$93.6 million in dividends over the same period, in compensation for its 3 percent stake in the mine.
This, however, excludes royalties and corporate taxes, which the mine pays over to State coffers, and which amounted to N$783.3 million and N$946.9 million, respectively, for the period under review.
The mine, which is the long­est-running and one of the largest open-pit uranium mines in world, has retained its current sharehold­ing structure, since its inception.
Other shareholders include Rio Tinto (69 percent), the Iranian Foreign Investment Company (15 percent), as well local individual shareholders,who own a combined 3 percent.
This means that for over four dec­ades, dividends have been pumped into the South African economy, for among others, to support that coun­try’s broad-based black economic empowerment (BBBEE).
This is the government policy aimed at advancing economic trans­formation and the participation of black people in the South African economy.
Rössing Uranium Managing Di­rector, Werner Duvenhage, only confirmed that the foreign para­statal acquired its stake at the incep­tion of the mine, before referring further questions about dividends to the IDC.
Shipping money
From 2008 to 2016, hundreds of millions were shipped over the Or­ange River, into the coffers of the South African company.
In 2016, the IDC received N$148.7 million in dividends from Rössing, while the previous year it raked in N$11.6 million as its share.
This is according to annual re­views by the Chamber of Mines of Namibia, which releases yearly re­ports on the performance and struc­ture of the mining sector.
The reports further revealed that about N$17.6 million was paid over in 2012 and N$17.6 million in 2011, while N$25.3 million was trans­ferred to IDC bank account in 2010. Also, for the year 2009, the IDC be­came N$30 million richer, because of its Rössing shares, while in 2008, N$28.6 million was paid over.
IDC explains
Nearly two months after an initial inquiry by Confidente, IDC spokes­person, Mandla Mpangase, indicat­ed this week that the parastatal also funds projects throughout the rest of the African continent.
“The IDC funds a range of sectors (both in South Africa and the rest of the continent) that will contribute to South Africa’s economic growth and job creation,” explained Mpangase.
Regarding the total amount of dividends which the IDC received from Rössing Uranium, since ac­quiring its 10 percent stake, Mpan­gase said, “All dividend payments – whether to the IDC or other share­holders – are published in Rössing’s annual reports… Funds are invested in projects in sectors supported by the IDC.”
Mpangase stressed that the IDC is always open to negotiation around reducing its 10 percent stake in Rössing.
The Namibian government has indicated that it is considering buy­ing over the IDC shares. This was confirmed by Namibian Mines and Energy Minister Obeth Kandjoze during an earlier interview with Confidente.
“The IDC has indicated that it is willing to give up its shares, and the [Namibian] government is looking into it. That is all I can say for now,” Kandjoze said.
Official opposition leader McHenry Venaani said that gov­ernment should first reverse these deals, before it implements the New Equitable Economic Empowerment Framework (NEEEF), which seeks to compel white-owned businesses to give up a significant stake in their companies to black Namibians.
“Before [President] Hage Gein­gob starts talking about 25 percent from someone who built up a cuca shop, they must deal with these big corporations,” said Venaani.
“We must first spread the cake evenly. Currently our uranium is being controlled by the English, the Iranians and the South Africans,” he said.
“We own, together with the em­ployment, about only 6 percent. This is a dangerous trend.”
The politician added that unless government opens up debate on this topic, with such big corporations, it will be unfair to target smaller en­terprises, in a bid to implement em­powerment schemes to benefit the entire nation.
“Empowerment must start here, and it must be broad-based empow­erment. It is doesn’t help for you to give these shares to a McHenry Ve­naani.”
He stressed that these broad-based empowerment schemes must include job security and training or capacity building.
According to Venaani, it is not only the Rössing Uranium/IDC shareholding deal, which sees much-needed capital leaving the country, but also other transactions, involving pension funds.
“I have asked why we fund other nations’ economic activities, with our money.”
He said this leads to opportunities lost and billions leaving the coun­try’s shores.
Namibian workers
Trade unionist Evilastus Kaar­onda, who is the President of the Namibia National Labour Organ­isation (NANLO), indicated that the Rössing shareholding deal, and others, should be renegotiated to at least benefit the workers in an em­ployee share scheme.
“There are a few other examples that do not even need legislative action on the part of government. I am sure that through a government/ company engagement, this can be addressed,” Kaaronda said.
“If you fail to persuade compa­nies, that is when you look at leg­islating. But I doubt there will any reason why companies such as Rössing Uranium will fail to agree with government. This is better than the NEEEF.”
“It is all about the political will and the goodwill of people. It would not be a difficult thing to do,” Kaar­onda added.
During his State of the Nation Address earlier this year, President Hage Geingob also urged those in the private sector to consider em­ployee share schemes.
Geingob said at the time, “It is dis­heartening when workers, some of whom may have worked for as long as 40 years for the same employer, only to receive a long-service award upon retirement.”
Gupta brothers, Ajay (left) and Atul