Billionaire Patrice Motsepe’s mine is facing significant developments on multiple fronts as it gets entangled in a fresh legal battle over exemptions granted to continue operation.
The $160 million Elandsfontein phosphate mine, owned by Kropz Plc, a company in which Motsepe’s African Rainbow holds a 90% stake, is once again the subject of legal scrutiny.
The World Wildlife Fund (WWF) has sued South Africa’s Environment Minister, Dion George, over his decision to dismiss appeals against an exemption granted to the mine.
Environmentalists have long opposed the project, warning that it threatens the Langebaan Lagoon, a fragile ecosystem located 60 miles north of Cape Town. The dispute, coupled with technical setbacks, has delayed the mine’s development since Kropz acquired South Africa’s second-largest phosphate deposit in 2010.
At the core of the legal battle is an offset agreement that required Kropz to purchase and donate more than 20,000 acres of land to the West Coast National Park as compensation for environmental impacts.
This proposal was invalidated by South Africa’s provincial environmental office in 2021, but Minister George’s decision to uphold the exemption has reignited opposition.
“The environment, and therefore the public at large, has suffered prejudice from the unconscionable delays in the implementation of the offset requirements,” the WWF stated in court documents filed with South Africa’s High Court on March 13. Kropz responded with a measured statement: “Kropz has noted these developments. They will be considering their position.”
Simultaneously, Motsepe’s investment holding company, African Rainbow Capital Investments (ARCI), has announced its departure from the JSE, citing persistent undervaluation of its shares.
Shareholders are being offered R9.75($0.54)per share in cash representing a 12.6% premium on the most recent closing price, but a 22.8% discount on the company’s net asset value (NAV). ARCI, whose portfolio includes stakes in TymeBank, Alexforbes, and wireless broadband startup Rain, has struggled with a share price that has consistently traded at a 40% discount to NAV. The company stated that delisting would allow it to return more value to investors.
What to know
The investment firm also announced plans to relocate its headquarters from Mauritius to South Africa, citing tax inefficiencies and limited international investment despite the initial rationale for its offshore incorporation.
“At the time of listing ARCI, the rationale for incorporating ARCI in Mauritius was its business-friendly environment, the tax treaties which Mauritius has in place, and not only to attract capital from investors outside SA (and the Common Monetary Area) but also to facilitate investments outside SA, if required by international investors. This strategy has not materialized to the extent expected,” the company said.
ARCI’s results for the six months to the end of December 2024 show some progress in reducing the gap between its share price and net asset value.
- The company reported a 4.1% increase in intrinsic NAV, reaching R19.3 billion. Over 99% of its portfolio is now defined as high growth or mature, with only six companies representing 1% of its investments remaining in early-stage development.
Beyond his business ventures, Motsepe has secured a second term as president of the Confederation of African Football (CAF). His unopposed re-election was confirmed at an extraordinary general assembly in Cairo, attended by FIFA president Gianni Infantino.
