NUM investment arm reports stellar progress, reduces debt – Mineweb, 1 December 2015

Following a period of portfolio realignment and consolidation.

By Sara Gon 

The year 2015 celebrates the 20th birthday of the Mineworkers Investment Company (MIC), the National Union of Mineworkers (NUM) investment arm. The South African union NUM is an affiliate of the Congress of South African Trade Unions (Cosatu).

The MIC’s purpose is to “Identify and invest in long-term, cash generative assets, thereby generating sustainable dividend flow to enable the trust to meet its social obligations”.

The trust is the Mineworkers Investment Trust and was also established in 1995 by the NUM after it identified a need to improve the quality of life for its members, former members and their dependents though investment opportunities. The MIC manages and invests NUM members’ funds for the trust, which is its sole shareholder.

As a matter of principle investment opportunities exclude possible conflicts of interests with the NUM in the mining, energy and construction sectors.

The idea is that through the creation of a more sustainable asset base the trust would realise income for social development programmes in the areas of education and micro-enterprise development.

The trust proposed generating income from investment and other sources in order to provide financial assistance for various projects, with the NUM, that would uplift and improve the quality of life of the NUM’s members, ex-members, their families and their communities.

The trust’s goals are:

  • Development in order to grow capacity of individuals, communities and organisations;
  • Education for the acquisition of knowledge; and
  • Training and skills acquisition.

 

The MIC’s success has been described as “stellar”. It reported a 23% rise in the value of its investment portfolio to R5.1 billion for the 12 months to February 28, 2015, while the MIC’s portfolio’s net asset value (NAV) moved to R5.9 billion. It started at a modest base of R3 million 20 years ago.

The MIC’s Chief Executive Officer, Mary Bomela, has said pleasing gains were secured while reducing debt from 8.4% of NAV down to 6.2%.

Strong progress had been made following a period of portfolio realignment and consolidation. MIC’s current share portfolio is held in:

Much Asphalt

Much Asphalt is Southern Africa’s largest commercial supplier of an extensive range of hot and cold asphalt products to the road construction economy. The company strategically positions static and mobile mixing plants in the developing regions of sub-Saharan Africa.

GESAT

General Electric South African Technologies is a joint investment by General Electric SA and the MIC, and is a platform for innovative rail solutions. Its contract to supply Transnet with stat-of-the-art diesel locomotives contributes to energy efficiency and enables South Africa to acquire high-tech manufacturing skills.

The Company provides modernisation kits, replacement parts signalling equipment and mining propulsion solutions.

Metrofile

Metrofile is THE filing solution authority in South Africa and has 20 operational facilities in the country’s major provinces. It also has facilities in Mozambique and Nigeria.

MSA

A manufacturer of mining safety products, MSA offers personal protective equipment, respiratory protection, head, body, face, eye and hearing protecting, fire fighting and rescue products and gas measuring technologies.

Set Point Technology

Set Point Technology provides fluid handling, analytical and mining services to industrial, energy and resources companies in Africa and Asia. Its specialised laboratories offer expert analysis to the precious metal exploration industry and condition monitoring of fluids.

Puregas

Puregas is recognised as Southern Africa’s leading supplier of purified and blended gaseous hydrocarbon propellant, foam blowing products and as an emerging supplier of high quality speciality gases and gas equipment.

FirstRand

This fully integrated financial services group is one of the big four South African retail, commercial and investment banks. The group, through its First National Bank, Rand Merchant Bank, and Wesbank brands, is active across the financial services industry. FirstRand is represented in various African jurisdictions including the SADC and Nigeria, in the UK, Dubai, Australia, China and India.

Nimble Group

The business supplies professional credit management services to lenders and borrowers in South Africa, and focuses on managing credit risk. Nimble offers the following services to its customers:

  • Management of consumer debtor book receivables;
  • Consumer debtor book collection and risk services;
  • Corporate lending and borrowing exposure;
  • Management of the Nimble Credit Opportunities Fund which focuses on acquiring distressed assets. The Fund invests in distressed debt exposures where credit grantors value a transactional exit and view the exit as a solution rather than continue to attempt to manage a non performing loan.

Primedia

The company is active in radio broadcasting, cinema, film distribution, outdoor advertising, commuter and out-of-home media, home entertainment and digital industries. Its brands span traditional and non-traditional media and reach the entire consumer spectrum.

Izazi Solutions

Recently purchased by EY, this technology solutions business is focused on the financial services sector. It offers implementation and support services, software development and integration expertise. The business has a growing African footprint and a global clientele, with a presence in Australia, New Zealand and Canada. Izazi is a financial services SAP Special Expertise Partner and the only SAP All-in-One Banking Partner for Africa. It has strategic partnerships with SAP, TIBCO, Extend Technologies, Perago and Lawyers Access Web.

Tracker Network

South Africa’s leading vehicle tracking company complements its core business of tracking and stolen vehicle recovery with a range of sophisticated fleet management and telematics services. Its radio frequency and GSM-GPS networks cover South Africa and several neighbouring countries. Tracker’s operations are divided into three segments:

  • Tracker Retrieve – the stolen vehicle recovery service;
  • Tracker Alert – through motion sensor technology;
  • Skytrax (Fleet and Execufleet) – an internet-based tracking service that allows the user to track vehicle locations in real time, determine when they are entering high risk areas and provide information around traffic violations.

Westcon SA

Westcon offers tailored and supported solutions for mobility, automated identity, specialised printing, point of sale and card reading equipment. Partnerships with leading international vendors enable the business to deliver best-of-breed networking technology solutions. Westcon also offers technical expertise via pre- and post-sales technical consulting.

Masana

Masana Petroleum Solutions markets and sells oils and fuels to the South African petroleum industry, and serves large commercial and industrial customers via the bulk wholesaling market. The company operates exclusively in the commercial and industrial segments of the petroleum industry, and sells BP branded oils and fuels to the business-to-business customer by offering bulk wholesale ranges of petroleum and related products.

Peermont

A hotels and casino resorts business, Peermont has nine properties in South Africa and five in Botswana. Emperors Palace, Peermont’s flagship resort near Johannesburg, regularly hosts top international sporting events. The company’s operations includes gaming, hotel accommodation and meals.

This information reveals a couple of revealing things: All the entities in which the MIC is invested are companies in the private sector.

The decision to avoid investment in the mining, construction and energy sectors for the principled reason of avoiding conflicts of interest has proved, unintentionally, to be the most fortuitous investment decision of the lot.

Sara Gon is a Policy Fellow at the IRR, a think tank that promotes economic and political liberty. Follow the IRR on Twitter @IRR_SouthAfrica.

Read the article on Mineweb here

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