Nelson Mandela’s Wealth-Sharing Dream Deferred in South Africa

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A miner holds a palcard as they gather at Lonmin's Marikana mine in South Africa's North West Province

Prudence Moime looks up from stirring a pot of corn meal in front of her two-room shanty in northeastern South Africa, and gazes across the surrounding rocky hillside. Just beyond her view, lies some of the world’s best platinum deposits.

She says she waits in vain for some of the money promised to her village by African Rainbow Minerals Ltd. (ARI), part-owned by Patrice Motsepe, the richest black South African and a beneficiary of the country’s policy to spread the wealth to blacks after the end of apartheid.

As former President Nelson Mandela enters his 96th year, recovering in a Pretoria hospital, his dream of widely distributing the country’s riches has faded. Discontent is mounting 19 years after his election, over how a tiny elite with ties to the ruling African National Congress benefitted from more than 600 billion rand ($61 billion) in so-called black economic empowerment deals.

Villagers say that in 2000, Motsepe’s people offered them an 8.5 percent stake in the Modikwa platinum mine on credit, promising to develop schools, hospitals, homes and roads in the hills of Limpopo province. While Motsepe today is a billionaire, the 80,000 community members still collectively owe about 158 million rand on their share.

“They promised to develop the village,” Moime said in front of her crumbling home, where a row of bricks serves as a kitchen surface. “Houses were never built. Roads weren’t built properly. We’re not happy at all.”

Moime, 30, says she and her husband remain without jobs and feed their family on a 560-rand monthly state child welfare grant. She and fellow inhabitants of the corrugated-iron shacks dotted across the barren landscape have no running water.

Modikwa officials say the company has spent 110 million rand on community development projects – including a 65-million-rand road, and recruits more than three-quarters of the mine’s workforce from the surrounding area.

“Sometimes the mining industry doesn’t get the recognition it deserves for a lot of the good, good work we do,” Motsepe said at a Johannesburg press conference on Sept. 3, 2012. “We can always do more. Our commitment to communities, to labor and to shareholders is without question.”

Companies made deals with African Rainbow Minerals Ltd. for business reasons rather than to just include black business people, Andre Wilkens, African Rainbow’s executive director and former chief executive officer, said in an interview today.

Read the rest of this story on Bloomberg.com.

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