Global engineering and technology corporation Metso launched new black economic-empowerment (BEE) ownership-compliant company Metso Mining & Construction South Africa, in Johannesburg, last month.

Speaking at the launch, Metso Southern Africa VP Dave Moon said the company’s footprint in South Africa was substantial and it could grow even further as its business in the region increased.

“The expansion of our business into new markets, especially in West Africa, reinforces our decision to create a purely South African company,” he said.

This operation would ensure Metso’s continued and focused approach of serving the needs and demands of the local market, while further developing its opportunities in the rest of the subcontinent, Moon added.

Metso engaged a consultant specialising in broad-based black economic empowerment (BBBEE) to determine a suitable partner, Metso distributors and marketing GM Darryl Moss tells Mining Weekly.

“The requirements were that the partners had to be community and enterprise-development orientated, as our objective was to use the BBBEE vehicle to uplift communities in the areas of our activities,” he says.

The objective of the chosen partner – Ububele, which consists of Ububele Capital and the Ububele Trust – is to empower and uplift previously disadvantaged black South African groups and individuals within the context of BBBEE, which is aligned with these requirements, he explains.

Although Metso Mining & Construction South Africa is operational, it is currently still a fully owned subsidiary of Metso’s existing South African business, Metso Minerals South Africa, Moss says.

“Metso Mining & Construction South Africa is in the process of issuing new shares which will be taken up by Ububele Capital. Ububele will then own 25.1% of the new company.

“As soon as the share purchase has been concluded, the company will be audited in terms of the Mining Charter and, should it comply, as expected, it will be declared BEE compliant,” he explains.

At the launch, Moon pointed out that 95% of Metso’s customer base was controlled by the Mining Charter, which had clear compliance targets.

According to the charter’s preferential procurement targets, by 2014, 40% of capital, 70% of services and 50% of consum- ables have to be procured from BEE-compliant companies, which, in return, are defined as having 25%-plus-one-share South African black ownership.

“These targets were yet another reason for Metso’s decision to launch a local South African organisation,” Moon said.

He added that Metso was excited about aligning with government’s BEE policy and that it fully embraced the principles of transformation behind the legislation.

“We are committed to creating an environment that assists our customer base in meeting their targets and objectives with regard to operations and compliance with the Mining Charter,” he added.

Moss explains that Metso Mining & Construction South Africa will take over all Metso’s mining and construction sales in South Africa.

“We have informed our customers of this and they are placing orders with the new company,” he says, adding that Metso Minerals South Africa will remain responsible for Metso’s non-South African business and its South African manufacturing facilities.