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Driving community development

Ownership and Structure

Alchemy ownership structure

At the end of 2011, Anglo American Platinum placed subscription shares into its Inheritance Trust, the Lefa La Rona Trust for Alchemy, to the value of R3.5 billion.

The Lefa La Rona Trust acts as a direct conduit and bank to four other Development Trusts in each of the four benefit areas and to the Zenzele Itereleng Non-Profit Company (NPC) in the LSAs.

Anglo American Platinum transferred the first dividends to Lefa La Rona in early 2012, with annual dividends to be distributed to each of the Development Trust and the Zenzele Itereleng NPC in the same proportion as their equity participation interest in the Lefa La Rona Trust.

Equity portions for each Development Trust have been determined based on the usage of reserves and resources at each mine over the next 30 years. For the LSAs, a fixed amount will be determined.

Anglo American Platinum guarantees a minimum annual cash flow of R20 million to be paid to the Lefa La Rona Trust, with an additional CSI commitment of R30 million annually.

The Lefa La Rona Trust distributes funds in proportionate to each of the four Development Trusts for the beneficiary communities’ development.

The Development Trusts that will drive community development in each of the benefit areas are:

Structure of Alchemy

  • Alchemy is structured around a linking Trust – Lefa la Rona, four local Development Trusts (DTs) and a Non Profit Company serving selected labour sending areas
  • Lefa la Rona, Zenzele Itereleng, Dikuno tsa Sechaba and Rustenburg Structures have been established
  • Activities to establish the remaining Development Trusts (Mogalakwena and Twickenham) are underway

Click here to download the information about the Incremental establishment of Trusts

Alchemy Principles

Alchemy started out with no blueprint plan, but has been established with a clear and binding set of principles, still acting as guiding lights toward its implementation and development:

These principles are:

  • A sustainable and empowered structure for delivering on an integrated benefits model in the identified benefit areas
  • Real benefits to communities, not to individuals
  • Transparency and inclusive stakeholder engagement through meaningful engagement and education
  • Enabling local communities through appropriate representative structures to undertake initiatives that will benefit them in the long term
  • Moving from micro to macro integrated benefit and project planning
  • Sustainability of the mine host communities beyond the life of the mine

Alchemy Benefits

Alchemy seeks to unlock resources flowing from Anglo American Platinum to promote and sustain long-term community development.

It’s estimated that Alchemy will reach approximately one million beneficiaries within the identified mine host communities and LSAs.

Benefit areas

Based on the integrated benefits framework and the emphasis on integrated planning, Alchemy will facilitate benefits at several levels:

  • Areas that benefit primarily from Alchemy, are those in a 15km radius from Anglo American Platinum mines (host and neighbouring communities, and resettled villages)
  • Integrated benefits (including CSI and SLP initiatives), and broader integrated planning will be deployed within 50km of mining operations
  • A needs analysis guides development in the short term, focusing on areas where development is most needed

Funding benefits

Funds made available to the Development Trusts and the NPC are the following:

  • Dividends from community shares (net of the dividends waived by the Lefa La Rona Trust in terms of the notional vendor funding commitments in relation to the subscription for the community shares)
  • Annual safety net payment (if required should dividend payments, net of the waived dividends, fall below R20 million)
  • Incentive payments against mine-based Key Performance Indicators (KPIs)
  • CSI funds for identified projects in the mine host communities and LSAs (collectively, the benefit areas).

Click here to download the Alchemy Factsheet

Real Mining. Real People. Real Difference.