Overview... Corporate Profile Financial activities IDC’s BEE mandate IDC’s position on Empowerment IDC’s Empowerment policy IDC’s Empowerment portfolio Empowerment in mining Future initiatives in mining IDC’s role in BEE Mining Sector

Corporate Profile... Self-financing state-owned development finance institution (Act No 22 of 1940) Provides financing to entrepreneurs engaged in competitive industries Follows normal company policy and procedures in its operations Pays income tax at corporate rates and dividends to its shareholder Independent Board of Directors Reports on a fully consolidated basis, with its Annual Report freely available to the public IDC Head Office Sandton

Vision... “To be the primary driving force of commercially sustainable industrial development and innovation to the benefit of South and southern Africa”

Mission... Contribute to the generation of balanced, sustainable economic growth in South Africa and Africa Economically empower the South Africa and African population Promote entrepreneurship through the building of competitive industries and enterprises based on sound business principles

Core Strategies... Providing risk capital to widest range of industrial projects Maintaining its financial independence internal profitability divestments from mature assets borrowings Identifying and supporting opportunities not yet addressed by the market Establishing local and global involvement & partnerships in projects that are rooted in or benefit SA and Africa Building upon and investing in human capital in ways that systematically and increasingly reflect the diversity of SA’s society

Financing Products... Equity and Quasi equity Venture Capital funds (egNew Africa Mining Fund) Commercial loans Wholesale finance Export/Import finance Share warehousing Commercial Guarantees Mostly combination of above

Financing Criteria... Greenfield projects, expansions & rehabilitations Relatively sizeable Economic merit (profitability & sustainability) Fixed assets and the fixed portion of growth in working capital Reasonable financial contribution from owners Security Environmental requirements

IDC’s BEE Mandate … The support of (BEE) process of the general population through: Continuing to implement procurement and outsourcing policies and programs that encourage the economic empowerment of the historically disadvantaged people (HDP), emerging businesses and entrepreneurs; and Encouraging the entry of black empowerment entrepreneurs into the new sectors of the economy as well as the traditional industries and sectors where entry barriers are noticeably high.

IDC’s position on empowerment… The BEE policy was approved by the board and reflects IDC’s fundamental BEE funding practices and mandate To augment these BEE objectives and remain a significant player in BEE funding, BEE must remain an overarching factor in all our funding activities IDC’s Role, as SA’s largest DFI remains fundamental to the national agenda to realise BEE objectives (Skills and equity transfer)

Empowerment policy imperatives… The IDC’s participation in BEE funding is guided by the following imperatives : Creation of ownership of businesses for HDP’s; Management capacity and entrepreneurship through transfer of skills Advancement of HDP employees through share and/or profit participation; and Adherence to the national BEE agenda affirmative action and procurement policies;

Empowerment funding guidelines… BEE Funding at the IDC is limited to : South African citizens and residents Who (themselves or their parents) could not vote prior to 27 April 1994; and Who are essentially black, Indian and coloured people.. A company or group of two or more individuals or a consortium where: The ultimate economic beneficiaries and control include the racial categories defined.

Funding Considerations… IDC takes risk primarily on the underlying operations, not on the BEE parties BEE parties should demonstrate commitment through: Cash contributions Sureties/put options may be requested Reasonable ability of BEE party to remain a shareholder post IDC exit

Funding Considerations… IDC’s role is limited to facilitation of transaction where BEE company and target company agreed to a deal IDC prefers to warehouse shares on behalf of BEE party and confer shareholder rights during the period of funding During the term of funding IDC remains significantly involved until shares are beneficially transferred to the BEE company

IDC’s Empowerment Portfolio… Number of approvals 27% 73% 69% 32% Worth R 56.4mWorth R 62 m Worth R 322 m Worth R 1.2 bn 14% 86% 19% 81% 37% 63% 2002 Worth R 2 bn Of the total number of approvals, 38.4% were empowerment deals worth R5.1 billion between 1998 and 2002 In value terms these amounted to 25.4% the total value of approvals

Empowerment Trends in mining… IDC’s empowerment approvals in mining /9999/0000/0101/02 Financial Year R million Value R'm Number N u m b e r In 2001/2002 IDC funded 12.5% of the total value of BEE deals in SA, 15% of which was in mining

Some recent BEE mining deals… Kgumo Bathong Holdings acquires a warehoused majority stake worth R100 million in Crown Gold Recoveries - Feb 2002 Purchase of East Rand Proprietary Mines by Crown Gold Recoveries – Nov 2002 R24.3 million facilities for evaluation and exploitation of the Kamferdam Dumps, and R10 million facility for development of Schmidtdrift Mine to New Diamond Corporation- May/ June 2002

Some recent BEE mining deals cont… R112 million participation in New Africa Mining Fund – May 2002 R85 million facility for purchase of CIL plant for Afrikaner Lease by the Afrikander Lease Employees Empowerment Trust – Nov 2002 Simane Security Investment purchased 10% warehoused stake of ordinary shares and preference shares in Harmony Gold Mining Company Ltd. – Mar 2001

R150 million participation in syndicated debt funding of ARM Mining Consortium’s participation in the Modikwa Platinum Project – Nov million preference share holding in ARM Mining Consortium for participation in the Modikwa Platinum Project – Nov 2001 Some recent BEE mining deals cont…

Future initiatives in the mining sector… IDC is working on a new strategy for engagement with BEE partners in the mining sector – in line with Government’s the new mining charter IDC will partner with mining companies, financiers and international agencies in realising effective empowerment in the SA mining sector IDC will endeavor to play a higher profile and catalytic role in the mining sector

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