Formed in 2010, Thebe Mining Resources (TMR) is a relatively new divisions of the 22 year-old Thebe. Although it is a late-comer in the mining industry, TMR is determined to build a formidable business that invests across the entire mining industry’s value chain.
We caught up with TMR CEO, Nonhlanhla Mabusela (NM), to quiz her about TMR’s strategy and how she plans to help the business to take advantage of investment opportunities in South Africa, the world’s richest country in terms of mineral reserves estimated to be worth $2.5 trillion.
Tell us more about TMR’s investment philosophy and commodity platforms that it invests in?
NM: Our Investment Philosophy is centred on our vision of establishing a cluster of majority black-owned operational mining assets; exploration drilling businesses, and opencast and underground mining contractors. To ensure diversity in our investment portfolio, we also look to invest in strategic businesses within the value chain typically in mining services and mining supply businesses.
On the commodity front, we are looking at coal in the short-term to leverage off the opportunities emanating from Eskom, industrial and export markets. In the medium-to-long term, we plan to venture into precious metals (platinum group metals), ferrous metals (manganese and iron-ore), and base metals (zinc and lead). We also look at opportunities as they present themselves and assess them individually.
In recent times, TMR has made a couple of investments in the mining industry. Tell us more about these acquisitions and how they fit into the overall strategy?
NM: We own 70% of Timrite which is among the market leaders in mining underground support solutions. We currently also have a minority stake in Sentula which is an opencast mining contractor. We are looking at investing in drilling companies and equipment hire companies. The main aim behind a number of these investments is to also support TMR as it builds its own portfolio of operational mining assets, thereby maximising on the value derived from using in-house contractors, and maximizing returns for the TMR group.
Thebe is relatively a late-comer into the mining and resources space. Is this an advantage or disadvantage?
NM: I suppose it is a bit of both, disadvantage in the sense that there was a time when strong black-empowered companies could have benefited from the Mining Charter and BEE codes when the historically strong technical partners were looking for long term BEE partners, affording those who responded timeously to this opportunity an ability to build strong mining portfolios. Thebe entered the market post this phase and entered during the time when the mining sector as a whole was undergoing a number of challenges such as the decline in commodity prices. The advantage to Thebe though is that it can learn from a number of expensive lessons learnt by the country and the sector as a whole. Tough economic times also present more opportunities of acquisitions as most companies require cash, and present opportunities of investing at discounted prices.
Over the past two to three years, South Africa’s mining industry has been hit by illegal and protracted legal labour strikes. What must be done to limit these strikes to ensure that there is little disruption to mining production as much as possible?
NM: The mining sector needs to adopt a more pro-active approach rather than re-active approach to these issues. Mining communities are traditionally and commonly poor communities that look to the mines for community development and increased standards of living. Often times these communities also have a number of unrealised expectations from Government such as improved infrastructure and job creation. Therefore mining companies need to see labour and community issues more and more as being at the heart of their organisations and have practical strategies in place to address them as well as keeping the labour force and community up to date with their plans.
Mining companies need to position themselves as drivers of community and work-force development. They must also work closely with Government to find more heart-felt and practical ways of reaching out to their work force. Foreign Investors need to know that Africa is not Europe, and as part of their upfront investment assessment, they need to understand the minds and needs of Africans in order to develop creative models of wealth creation and sharing.
What can we expect from TMR in the near to medium future?
NM: We have quite a healthy pipeline and are working on a number of opportunities. We have recently appointed a new Financial Director, and we hope to be making a number of deal announcements in the next 24 months and hope to take TMR to new and greater heights and be a voice to be reckoned with within the Thebe Group.
Mining is perceived to be a rough, tough job that is dominated by men. How did you get into mining and what must be done to ensure that there are more women in mining?
NM: Being a charted accountant, mining has been more where the universe took me than where I took myself. I was initially exposed into mining as a financial consultant trying to raise capital and grants for junior miners from commercial and developmental funding institutions, as well as by being a director and sitting on the boards of some companies in the sector. I was then afforded this amazing opportunity by Thebe to venture into the sector more formally and on a focused basis which is an exciting challenge every day.
It’s good for us as a country to ensure that there are more women in mining, but career choice is always a spiritual and personal interest-driven choice. Therefore the best we can do is to ensure that we create platforms for those women who are passionate about the sector to realise their goals. The Mining Charter and BBBEE codes have gone a long way in presenting women with the opportunity to participate in the sector. The Department of Trade & Industry is also sensitive to women and provides a number of incentives. The key thing is passion and self-drive
Before you joined, what were you doing commercially?
NM: I served articles at accounting firm KPMG and worked in their corporate finance department before pursuing a career in investment banking. I then worked for Absa Capital, Export Credit Insurance Corporation of South Africa and Nedbank Capital, where I specialised in project finance. Prior to joining Thebe, I was running my own project finance consulting business where I focused on putting together business plans and financial models used to raise funding for diverse number and types of projects mainly in the infrastructure and mining space in South Africa and the rest of the continent. I did this for three years and was working largely from home which gave me an opportunity to bond with my kids.