CURRENT MARKET TRANSFORMATION 

The market is currently controlled by Major Mining Companies (“Majors”) who deploy a monopolistic approach every aspect of the sector. The Majors have controlled the easiest, most lucrative and premier mining rights as a legacy obtained from the Apartheid regime. The mining rights have largely been recycled through the majors dependent on investment, commodity and business life cycles. 

Majors, directly or indirectly, stifle meaningful transformation in the mining sector through the absolute control of every core aspect of a mining environment. For example, the Majors: 

• Control most of the banking sector’s capital allocation and exposure in the mining sector.

• Control the capacity on logistics (rail and port allocation etc.) thus denying smaller empowered operations the ability to take product to market. Smaller mining companies are forced to utilise more expensive logistics solutions which significant increase the break-even point in trading. This further exacerbates the funding crisis.

• Control the bankable professional services required to underpin the provision of guarantees, mining right allocation and feasibility costs.

• Utilise anticompetitive tools to eliminate competition. For example, Major’s frequently flood the market such that the oversupply creates a artificial downward pressure on market pricing. Smaller companies have smaller balance sheets that are artificially prejudiced.

• Transfer pricing and collusion with end users.

Decentralised and less organised smaller mining companies lack the balance sheet and production capacity to compete meaningfully. Further to this, they lack the governance and controls to provide capital markets with prerequisite comfort to invest in their operations.

MANTENGU KEY TO TRANSFORMATION AT SCALE

Mantengu, first and foremost, is being positioned to be a Next Generation Mining company built by South Africans, for South Africans. 

Mantengu’s Board and core shareholders are dynamic, progressive and fully committed to next generation empowerment. This provides Mantengu with a common vision and unique ability to make the corporate changes and structural reforms upfront. Mantengu will position its listing as an aggregation platform which will achieve the following:

• The consolidation of balance sheet and production capacity to compete in capital, logistics and trade markets on the level of Majors.

• Successful execution of its unique funding model to provide capital markets to a consolidation of smaller companies.

• Provide the highest levels of governance and controls to justify significant reform in the mining sector.

• Consolidate the mining, mining services and energy value chain such that the intrinsic goodwill in the value chain remains in Mantengu and South Africa.

• Target community owned assets on a fair and equitable basis. This will provide capital and market access to areas that capital markets have largely ignored. This will achieve true broad based and inclusive empowerment on a regionally specific and bottom-up basis.