Mvelaphanda Resources revealed today (19th February) that it is set to close after abandoning plans to become a South African black mining superpower.

The company was founded ten years ago by former anti-apartheid freedom fighter Tokyo Sexwale with the intention of capitalising on black economic empowerment (BEE) legislation.

However, many black-owned mining firms have been struggling to secure credit in the financial crisis and Mvelaphanda will now distribute its 63 per cent holding in Northam Platinum to shareholders.

Disclosing the news at a presentation in Johannesburg, Chief Executive Officer Pine Pienaar confirmed that the company will "delist and cease to exist".

Spokesman James Wellsted added in an interview with Bloomberg: "Black empowerment partners will remain invested in the mining sector, just in another vehicle."

The announcement comes after South African Minerals and Energy Minister Buyelwa Sonjica claimed last week that laws may be amended to force companies to increase their dealings with black investors.

Speaking on 10th February, Ms Sonjica expressed her desire to see BEE firms "graduating and becoming companies that would buy out some of these bigger companies".

Mr Wellsted revealed that Mvelaphanda will now participate in a rights offer conducted by Northam - a process which may last 18 months - before distributing its shares.

Impala Platinum was attempting to purchase both companies in order to create a "South African mining champion", but the deal fell through last month.

Source:

Mvelaphanda Quits Plan to Become Black Mines Champion (Update1) (19/02/09)
http://www.bloomberg.com/apps/news?pid=20601116&sid=a0CzoNca1W9U&refer=africa