Following a breakdown in discussion with the Amakhosi and trustees to reform community trusts, on 17 November Richards Bay Minerals (RBM) brought forward an application to the KwaZulu-Natal High Court seeking an order to vary the trust deeds.
Established in 2009 as part of RBM’s BEE deal, the community trusts were developed to enable members of the host communities proximate to the operations to benefit from an ownership interest in RBM. For several years RBM has had serious concerns about the governance and management of the community trusts and trusts’ assets.
The trusts have not appeared to be consistently delivering meaningful and sustainable benefit to community members, and in August 2021 all parties committed to reforming the trusts in a manner consistent with broad-based community empowerment.
RBM managing director Werner Duvenhage said: “With the trustees reneging on the August 2021 agreement which committed all parties to progressing a process to reform the trusts, RBM has been left with no option but to approach the High Court.”
“Litigation is a last resort and we have always preferred to achieve trust reform through amicable means. Unfortunately, all prior attempts to reach a negotiated outcome have been unsuccessful, and with the court application we hope to achieve a change in the trust deeds that supports our goal of providing our host communities with long-term, broad-based empowerment.”
The trust reform process aims to enhance the governance and administration of the trusts and improve their ability to achieve the objective of delivering broad-based public benefit to the four host communities.
Richards Bay Minerals (RBM) is a world leader in heavy mineral sands extraction and refining and is South Africa’s largest mineral sands producer. RBM mines the vast mineral rich sands of the northern KwaZulu-Natal province and produces predominantly ilmenite, rutile and zircon – materials used in everything from paint and smart phones to sunscreen and toothpaste.
RBM is a joint venture between Rio Tinto (74%) and Blue Horizon – a consortium of investors and the mine’s four host communities (KwaMbonambi, KwaSokhulu, KwaMkhwanazi and KwaDube) – which owns 24%. The remaining shares are held in an employee trust.
Offering employment to approximately 5000 people and with a total economic impact of R7 billion in 2021 alone, RBM has been a major contributor to the province for more than 40 years.
