ArcelorMittal South Africa has still to find a black empowerment partner as it breaks off talks to sell 26% interest in the company to a group of black investors known as the Ayigobi Consortium, which included a son of the South African President Jacob Zuma.
The subsidiary of the world’s largest steel making company was to sell the stake in a transaction valued at 9.1 billion rand. The transfer would allow the company to comply with the black economic empowerment legislation which was set up to compensate black citizens for discrimination during the apartheid.
Themba Hlengani, an ArcelorMittal South Africa spokesman, said yesterday that finding a black empowerment partner remained a priority for the company. The deal with the Ayigobi Consortium had come in for considerable criticism from five of the company’s largest minority shareholders when it was announced. The lack of transparency in the deal was also criticized.
The transaction was eventually cancelled as negotiations lapsed when the two parties were not able to agree to an extension. The resolution of the disputed rights at Sishen which is the largest iron ore mine in Africa, was part of the problem with the transaction. Imperial Crown Trading was a firm which was part of the Ayigobi Consortium and it was awarded the mining rights to Sishen when ArecelorMittal was delayed in renewing its mining licenses.