SANDTON, SOUTH AFRICA - Like many historically "white"-controlled businesses, BOART LONGYEAR has been eager to make a meaningful contribution to South Africa's black economic empowerment process and believes it has found the right partner in CALULO INVESTMENTS. The deal sees Calulo partnering with Anglo American's drilling supply company Boart Longyear and business development arm, Anglo Zimele, to establish a black empowerment drilling venture. Trading as CALULO DRILLING (PTY) LTD., the new entity shares Boart Longyear's drilling expertise by the transfer of the assets, skills and technology associated with Boart's South African underground diamond drilling business.
The "fit" is a vital component of any empowerment transaction, says Mpho Diale, and he is comfortable that the association with Anglo American is right.
"While our businesses are very different in many ways in terms of our history and scope we share a fundamental belief in the need to grow sustainable new business ventures," says Diale, managing director of Calulo. "We're in this for the long haul."
In contrast with those who dismiss empowerment as a Robin Hood strategy of 'taking from the rich to give to the poor,' Mpho Diale says, "Black economic empowerment as a driver of transformation is not a communist-invoked strategy for nationalization as some may fear. It is, in fact, the private sector's response to the issue of 'levelling the playing field' through broader based wealth creation and equity building."
Calulo Investments' business interests are spread across the energy, resources and services sectors and although it had relatively little exposure to either the minerals resource or drilling industries prior to this deal, Diale insists it will bring value to the transaction.
"We're on a steep learning curve but our lack of experience can be viewed as a strength, rather than a perceived weakness. Not only are we free of the historical baggage that has dogged mining in South Africa, but the credibility we have established in the petrochemical sectorplus our vitality and flexibilityallows us to bring a fresh, energizing perspective to the challenges facing the mining industry in the 21st century.
"From the ways in which we engage with our workforce, to the solutions we propose for cutting costs, and everything in between, our value lies in our ability to look at things differently in order to deliver a strong, profitable bottom line," he continued.
The South African government's Mining Charter has created a 10-year window for the mining industry to redress its inherent imbalances on it own, and ventures such as Calulo Drilling constitute a small but meaningful contribution to the process. "Together with Boart Longyear and Anglo Zimele, we're helping to set a new benchmark for the South African industry that benefits all its players," says an optimistic Diale.
Initially, Calulo Investments will hold a 51% stake in the joint venture making it a majority-owned, empowered stakeholder while Boart Longyear and Anglo Zimele will hold 39% and 10% respectively. Within two years Boart Longyear will reduce its shareholding to 26% and Anglo Zimele will exit the business, both selling their shares to Calulo.
To learn more about Anglo American's empowerment initiative, visit www.zimele.co.za.