Co-operation agreement signed between Stimela and the IDC
8 November 2001
Following the formation of a joint venture between Stimela and Avmin regarding Stimela’s shares in Iscor Limited, Stimela and the IDC have today entered into a co-operation agreement with respect to their future holdings in Kumba Resources Limited (Kumba).
The agreement provides for reciprocal pre-emptive rights with respect to the parties’ holdings in Kumba. Additionally, Stimela has granted, to the IDC, the right to acquire the Iscor (or Steelco) shares held by Stimela, after the Iscor unbundling. Both parties’ respective interests in Kumba are seen as long term strategic holdings.
Rick stated, “The agreement has another major significant aspect in that it allows for the introduction of meaningful South African empowerment participation in the minerals sector.”
Avmin CEO, Rick Menell, commented: “the conclusion of this transaction has significant importance to all parties involved, as well as South Africa as a whole, in terms of the future value release in the Northern Cape mining district. It opens up the opportunity to create value in the country by utilising the various competitive advantages that all parties bring to these assets”.
“The agreement”, added Menell, “has another major significant aspect in that it allows for the introduction of meaningful South African empowerment participation in the minerals sector. Negotiations in this regard are being finalised”.
Subsequent to the proposed unbundling by Iscor, Stimela and the IDC will collectively hold more than 25 per cent of the issued shares of Kumba.
IDC Chief Executive, Khaya Ngqula, said: “Stimela and the IDC are in favour of Iscor’s planned unbundling proposal and are supportive of Kumba’s management. Furthermore, Stimela and the IDC have undertaken to jointly pursue strategies relating to their holdings in Kumba.”
Ngqula added: “this is the beginning of the long awaited rationalisation in the iron ore industry. We are looking forward to co-operation with other groups that own iron ore and other mineral deposits in the Northern Cape. ”
“We at the IDC are of the firm belief that synergy among these groups can be achieved, which will deliver extensive savings, especially in transportation and this will ultimately benefit both shareholders and employees”.
“Because it is the intention of the parties to build this alliance significantly over time, it is viewed as a long-term strategic investment.”