The winner in the resources sector in this year's Top Empowerment Companies (TEC) is Northam Platinum, though Harmony Gold Mining, which came third in the sector rankings, may be entitled to complain when you examine the priorities and fundamentals of both companies.
Second-ranked Merafe - formerly SA Chrome & Alloys - may also wish to object. Merafe is controlled by the Royal Bafokeng Nation through Royal Bafokeng Resources Holdings, which owns 32,1%. The company is run by CEO Steve Phiri and last year it negotiated a highly favourable deal to merge its ferrochrome business with that of industry leader Xstrata.
In fact, a critical analysis demands serious debate over the results of the survey in the category of black economic empowerment (BEE) ownership, which seems to be an important bone of contention.
Northam is rated as 33,2% BEE owned, but this is on the basis of a deal that has not yet been completed.
This is the proposed 50% acquisition of the Booysendal platinum project from Mvelaphanda Resources (Mvela), which was announced in February last year. The TEC survey counts empowerment deals from the date of the Sens announcement .
At present Mvela has a 22,5% stake in Northam. Once the Booysendal deal goes through, it will have 34%, according to Mvela's calculations.
Harmony has a direct BEE equity ownership of 19,8% because of its control structure through ARMI and ARM.
Harmony's in-house estimates are that this figure could be pushed to 31% if the department of minerals & energy (DME) were to take into account the "units of production" BEE calculation based on the deals that Harmony has done with other BEE companies.
Then there is employment equity, where Harmony outscores Northam in the survey, but the relative ratings may not properly reflect the magnitude of Harmony's lead.
There's one black South African among Northam's nine-man senior management team and he is in the traditional post of human resources manager.
Harmony has four blacks in its 13-strong senior management committee, one of whom is the financial director.
Last year 18% of Harmony senior management were historically disadvantaged individuals compared with 7% for Northam.
But what is clear is that Northam has been a pioneering BEE company in one of the toughest positions in the SA mining industry.
Northam is the highest-cost producer in the platinum sector because it is SA's deepest platinum mine.
Its deep-level mining operations are vulnerable to disruptions, such as the severe fire that broke out on September 20. The fire killed nine workers and operations were shut down for six weeks, costing Northam about R147m in lost revenues.
The result was a profit warning for the six months to end-December 2004 that earnings could be 50% lower than the comparable period of 2003.
The obvious solution is to diversify Northam's operational base and open up other, lower-cost platinum mines, which is what Tokyo Sexwale is intent on achieving.
The Booysendal deal would be the first deal of this kind, depending on when it goes ahead, which may, in turn, require a weakening in the value of the rand against the US dollar.
Mvela acquired its 50% stake in the Booysendal joint venture from Anglo American Platinum, which still owns the other 50%.
Selling Booysendal to Northam and raising Mvela's BEE stake in Northam would also mean that Northam would be able to acquire a 7,5% interest in the Pandora platinum joint venture.
Mvela also holds rights that could be combined with those held by Southern Platinum to increase the size of the developing Messina platinum mine.
Vending all these rights into Northam would turn the company into Mvela's dedicated platinum arm, enabling it to push ahead with the expansion of its business on a broader front.
