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An Authentic African Success Story

Patrice Motsepe’s success has to come to define the entrepreneurial abilities South Africa craves. An ability to read global trends, take risk and thrive. It’s no accident that Motsepe has come to define an authentic home grown success story that is respected and reported on the world over. He is a recipient of the Global Leader of Tomorrow from the World Economic Forum and holds numerous accolades including Ernst & Young’s Best Entrepreneur of the Year award (2002), while being named South Africa's Business Leader of the Year by CEOs of the top 100 companies in South Africa.

The executive chairman of African Rainbow Minerals Limited, ARM, heads the diversified mining and minerals firm based in Johannesburg is the first black South African to feature on the Forbes list of the world’s richest people, coming in just behind Nicky Oppenheimer and Johan Rupert. But it’s not just the financials that have catapulted Motsepe into the spotlight, despite a rare number of interviews granted to the media. Rather his commitment to football and black business has seen him featured in media outlets. But whether local or global, coverage of Motsepe has ultimately focused on his skill and success as an authentic home-grown entrepreneur come business tycoon. Opportunity has taken a look at Motsepe ability to take advantage of South Africa and Africa’s business potential, alongside some of his views on important current issues facing business.

Motsepe established African Mineral Resources and number of marginal shafts at Vaal Reefs in January 1998 on favourable financial terms, followed by the purchase of other marginal shafts owned by AngloGold in the Free State, as blackentrepreneurprofile.com reports. The company would come to be associated with Africa’s rising profile on the global stage. As early as 2004, Motsepe’s comments at the World Economic Forum showed he has optimism in the outlook for the continent, notably in light of Africa’s performance in the midst of economic recession in established markets.

Writer Errol Mars recalls the story of the young Motsepe growing up, writing that he began his business career as a child when he would wake early to help his entrepreneurial father by selling liquor to mine workers at his father's shop. "I must have been about eight when my dad said one day, We make so much money when you're behind the counter you should take over the business when you grow up. But it was hard work, from 6am to 8pm. I soon realised I needed to choose a career that would keep me away from that shop! That's how I came to decide when was only eight that I'd become a lawyer."

Motsepe headed to Swaziland University where he earned BA and later acquired LLB from Wits University. By 1994 he was the first black lawyer to be made a partner at the law firm Bowman Gilfillan, specializing in mining and business law. After a few years the desire for business kicked in.

Today he’s the biggest single shareholder of the world's fifth-largest gold mining company. His company, African Rainbow Minerals, controls 14.8 per cent of Harmony, while his family trust owns 41.2 per cent of ARM, valued at approximately $2 billion.

According to India’s The Economic times, Motsepe has been in talks with Ratan Tata for ventures in financial services in India and minerals in his country, where the Tata Group is already one of the biggest foreign investors.

"From the first time when the heads of state of South Africa and India asked us to co-chair the forum, we were very confident that we will do business at the personal level, Ratan is a highly respected businessman. He is a very special person. We are in discussion both in financial services and mining. I'm confident something will come out of it," Motsepe told The Economic Times.

In dissuasion with the publication’s Himangshu Watts, Motsepe said business between South Africa and India is built on a strong foundation: “strong foundation: “There is a very strong relationship. South African businessmen feel very comfortable in India. It's like home, and the same can be said about Indian businessmen in South Africa. We have got close to 2 million South Africans of Indian origins. We also speak very emotionally about the time Gandhi spent in South Africa. Those are very special, emotional relations. Right now strong ties of the past have been translated into strong, competitive and very profitable relationships in the business front."

He told Watts that he remains bullish on the prospects for commodities and the metals business: “We have lots of confidence in the future of the commodities business,” as The Economic Times journalist reported.

“[The] Global economy is going through a period of challenge right now, there is an element of uncertainty, but we are confident, in our business there will be periods when things are not as good as they can be but overall we are quite bullish about the long-term future of our business both in India and China and the developing world."

In an interview carried by ABN Digital he said “I don’t think a strong currency – long term – is in the best interests of the country, but whatever the exchange rate will be, with respect I think it is something that should be defined by the market”.

When it comes to electricity costs, he noted that various initiatives had been undertaken to address the issue to ensure the increase in the costs did not a fundamental impact on profitability and sustainability.

“We have for many years had a cost of electricity that was recognized by global terms to be very competitive. He noted that the increases “compelled all of us to go back and review”.

“Over the years there has been some discussion of introducing competitors to Eskom and in many part of the world you do have these independent power producers.”

“In fact the information I received in the past was that because Eskom was so cheap it was unattractive for independent power producers to enter into the market,” he added.

In light of COP17 it is noteworthy that Motsepe believes the country and the mining industry have a huge obligation have a huge responsibility to significantly reduce CO2 emissions that contribute towards global warming – a statement he made in the run-up to the talks in Copenhagen two years ago. “As an industry and a company we are committed to make our contribution. It is very important long term. We do need a planet that provides a safe environment for many many hundreds of thousands of years to come.

As the chairman of African Rainbow Minerals he now oversees a company worth R37 billion. The business leader is keen to see black South Africans play a key role in the economy and South Africa as a whole. At the same time he has also identified the unity of black and white business personalities as crucial.

"We cannot deal with the challenges of SA if black and white do not come together” he explained when addressing the media on the way forward for the newly formed Black Business Council.

According to BusinessLive.co.za Motsepe points out the ANC Youth League's call for nationalisation was an expression of frustration by the country's youth over "the sense of exclusion" from economic participation.

"If we don't address those issues, we will have our people moving towards policies which are radical and extreme," Motsepe he has warned.

On his part, Motsepe has continually identified measures to promote opportunity for talented South Africans marred from reaching their potential due to poverty.

Johan van Zyl, Sanlam’s group chief executive has identified the Motsepe Family Foundation’s strong belief that soccer is a nation builder. “The growth of soccer, through the development and enhancement of youth soccer and life skills, will contribute immeasurably to this country’s future,” he explained following Sanlam’s partnership with the foundation. 

The Motsepe Cup, as it was formerly known, was founded in 2004 named after Mr Patrice Motsepe’s late mother, Kay. The league has since developed into the premier high-school soccer competition in South Africa, with 3 000 schools across the country having participated on a regional and national basis to date. Last year more than 4 000 competed, participating on a knock-out basis.

According to southafrica.info the country’s businesses must be "aggressive" in taking on new opportunities in Brazil, Russia, India and China through South Africa's new membership of the BRICS grouping, as President Jacob Zuma outlined during a recent function in China. What better person to have in one’s delegation than Motsepe himself.

He was one of around 100 other South African delegated form business and government as Zuma encouraged businessmen to offer the South African government feedback on what hurdles companies faced so that the government could help to make it easier to do business with the other BRICS nations,” according to buanews.co.za

In addition to commitments on areas of social responsibility ranging from sports to climate matters, Motsepe’s current has received extensive coverage on his work within business to ensure transformation in the South African economy is achieved.

In September this year a black business summit decided to resurrect the BBC (Black Business Council) to unify black business, as Soweton journalist Nonku Khumalo reported.

“Motsepe believes it was a mistake to disband the council when Business Unity South Africa was formed,” according to Khumalo referring to Motsepe during a meeting with the press in which he said he would never turn his back on black business.

"The structure of Busa was done so that blacks could be in control. It was going to be our Busa, with a non-negotiable agenda to bring blacks to the centre," added Motsepe, who explained the “BBC's aim is not to compete with Busa but to be a successful voice and make sure problems unique to black business and professionals are addressed in a meaningful sense."

So far BUSA has been involved meeting government, civil society and the private sector to address job creation, land reform, accelerating transformation as well as South Africa’s global competitiveness, amongst other issues.

“It is in the long term interest of business to work together with Government, labour, churches, women and youth groups and other stakeholders to ensure that all South Africans and in particular, historically disadvantaged persons and their communities, participate and benefit from the development and growth of our economy.”

Without hesitating to address the challenges that need to be confronted to unleash South Africa’s potential in the context of a socially just society he has identified economic inclusion as a core objective.

“There is a growing feeling of frustration and despondency amongst black entrepreneurs and professionals, as well as amongst black youth and women and the organisations that represent them; of being ostracised and marginalised from participating and benefiting from the growth and development of our economy. In a statement on a meeting between government and the BBC’s leadership, he noted these problems are separate and apart from the enormous challenges of creating jobs and eradicating poverty which confronts us all”.

“This is a recipe for long term political and economic instability and is definitely not in the interest of business. Black and white business should unite and work together to deal with these serious challenges and contribute towards creating a culture and environment of inclusivity and participation by all South Africans at all levels of the economy,” says Motsepe. His words were captured by Creamer Media who reported the Black Business Council’s announcement on the formation of a negotiating team which will be led by the President of FABCOS (Foundation for African Business and Consumer Services), Mr Mxolisi Zwane to engage in discussions with BUSA

He has foreshadowed the bullishness on Africa that is now common knowledge in an economy where the continent has been resilient in the midst of global recession during the World Economic Forum in 2004.

"Over the next few years we will find governments in Africa becoming significantly more accommodating. There is a new spirit, a new environment and a new sense of urgency. We will see more projects of the magnitude of Sasol Gas and Mozal. The future looks good."

As the Word Economic Forum points out, later in 2009 Motsepere said he heard a discussion between two eminent economists. One said that China is going through a period when it would “buy less of our minerals”, while a very senior Chinese planning expert expressed the opinion that China is committed to spending US$ 500 billion for infrastructure in the next few years.

This represents a “huge amount of opportunities for our industry,” Motsepe said. Although the short-term focus will be on cutbacks and cost reductions, the suggestion was that we should not find ourselves in a situation similar to a year or so ago, when there was a super cycle and many were not ready in terms of production. “The short term looks challenging, but the future continues to look optimistic,” he added at the World Economic Forum meeting.

Motsepe also noted “the serious long-term investor [understands] the nature of our business, but also will give you the benefit of the doubt even during difficult short-term periods if you explain to them the challenges and the difficulties, but more importantly, indicate to them a credible, good long-term plan that will allow your company to do well in the future.”

In a rare interview granted to Forbes Africa just a few weeks ago Motsepe indicated calls for nationalization were also reflective of a feeling that business was not doing enough to help business.

In the article journalist Vuyo Mvoko reports that for a very long time business was growing and succeeding without regard for the needs of the people, according to Motsepe “When I sit with business colleagues, I recognize that there are things they don’t understand. These are good people, mind you, but they were not brought up in a culture of having an obligation (to listen to the poor).”

The battle to win over the hearts and minds of the people is as important for business as it is for politicians, he added during discussion with Mvoko.

“The challenge for us is how do we present an argument to our people that makes them understand that indeed this mixed economy that we have now—where there’s a globally competitive private sector that coexists side by side with a strong developmental state—is what we need.”

Looking to the future Motsepe says business unity is crucial, ahead of the governing party’s policy conference in mid-2012, which is set to discuss a number of key policies that could affect the future of business in South Africa.

Motsepe clearly reflects a leader who sees opportunity, but also recognises engagement as a core aspect of ensuring South Africa meets important goals of transformation and job creation, aims ultimately at the long-term interests of stability and growth that benefits all South Africans.

Garreth Bloor

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