US SEC investigates Gold Fields over black empowerment deal in South Africa

10 September 2013 (Last Updated September 10th, 2013 18:30)

South Africa-based gold mining firm Gold Fields said that it has been investigated by the US Securities and Exchange Commission (SEC) over $210m black empowerment deal.

South Africa-based gold mining firm Gold Fields said that it has been investigated by the US Securities and Exchange Commission (SEC) over a $210m black empowerment deal.

The company was being probed over a deal that was made in 2010, which involved the granting of a mining license at its South Deep mine located near Johannesburg to black investors.

Gold Fields allotted a 9% stake in South Deep to a group of black investors to meet government targets for black economic empowerment (BEE), which includes black ownership.

The deal was under scrutiny, as the beneficiaries of the deal reportedly included ANC chairwoman Baleka Mbete and relatives of anti-apartheid heroes such as Nelson Mandela, reports Reuters.

The company said that the independent investigation revealed that the implementation of the transaction did not meet its own standards, and as a result chief executive Nick Holland gave up his 2013 bonus.

Gold Fields did not release the results of the investigation, which was commissioned following reports in the local press.

Gold Fields chief executive Nick Holland was quoted by Business Day in 2012 as saying "In discussing the details around South Deep we got stuck: there were certain people who decided they had a lot of power and authority and they were going to wield it."

Mining companies have to sell at least 26% of local operations to black citizens, with transactions that benefit workers, communities near sites and trusts for the poor being favoured, according to South African law.

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