In response to “Reforming a Nation: Exploring South African Pioneer Niall Carroll’s Role in the Rise of the Bafokeng Nation and the 2010 FIFA World Cup,” dated 16 October 2020.

We wish to respond to and clarify certain claims in the abovementioned article insofar as references are made to the Royal Bafokeng Nation and Kgosi (King) Leruo Tshekedi Molotlegi.

A naïve reading of the article would leave one with the impression that Niall Carroll, who was CEO of Royal Bafokeng Holdings between 2004 and 2012, was the architect of the “peace deal” between the Bafokeng Nation and Impala Platinum, with which we had been engaged in a decades-long dispute over mining royalties. This may have been an inadvertent slip, but that deal was engineered in 1999 (some five years before Niall appeared on the scene) by Steve Kearney, former CEO of Impala Platinum, and the then tribal leaders.

Hence, the statement that “resolving the platinum dispute became a priority for both RBH and Impala Platinum” upon Niall’s appointment as CEO of RBH is factually incorrect. That dispute had already been settled in 1999, long before Niall’s arrival to RBH. For the same reason, the statement that “It wasn’t until the early 2000s where significant progress was made” is factually incorrect – our disputes with Impala were long settled by then.

It is correct to say that Niall was brought in to the RBN to establish Royal Bafokeng Holdings (RBH) and to assist in our diversification into non-mining activities. But he was not involved in the settlement of our disputes with Impala Platinum.

It would be criminal to the late Steve Kearney’s memory to ascribe his accomplishments to Niall, so please allow us to fill in some of the details.

The Bafokeng are a Setswana-speaking people numbering some 150,000 occupying a small pocket of platinum-rich land near the town of Rustenburg in South Africa’s North West Province, about two hours north-west of Johannesburg.

Our ancestors have occupied this area for centuries, but had to defend their claim to this land against a succession of marauders, carpet baggers and colonialists, from Mzilikazi (then fleeing Zulu King Shaka’s carnage) to the British colonists and the Boers. The British and the Boers introduced the concept of title deeds, something completely alien to our system of customary law and communal ownership. Our ancestors found themselves trespassers on the land their forebears had occupied for centuries. Undeterred, in the 1800s the Bafokeng leaders despatched regiments of young men from the tribe to the newly discovered diamond fields of Kimberley, some 500 kilometres to the south. The young men made the journey by foot, and many died on the way, seeking employment in the diamond prospects in and around Kimberley. They returned sometimes years later, cash in hand, a portion of which was “taxed” and used to purchase the land we now occupy.

The fact that our forebears had the foresight to purchase back from the colonialists the land we had occupied for centuries made us unique in South African history.

What makes us even more unique is that we happen to occupy some of the richest land in the world. Some 80% of the world’s platinum group metals (PGMs) are found in South Africa, and a good portion of that lies beneath our land. God clearly blessed us (or cursed us, depending on your view). With the discovery of platinum in the 1920s, we now had to deal with slick lawyers and corporate mining executives determined to get access to our minerals.

The gnarly issue of land and who owns it lies at the heart of South Africa’s long and eventful political history. Various statutes were passed to prevent black South Africans from owning land in this country, though all this changed when former President Nelson Mandela was released from prison in 1990 and all racially-based legislation was repealed. As black people, we were not entitled to own land under the apartheid system, so we entrusted our title deeds to Christian missionaries. During the apartheid years, most of our ancestral land disappeared into the now defunct homeland of Bophuthatswana, and with that the royalties to which we were entitled from platinum mining – an act of bare-faced larceny.

By 2003, some 84% of Impala Platinum’s mining lease area was on Bafokeng land on which we earned royalties equivalent to 13% of taxable income – which anyone in mining knows is a fluid and fabulously creative concept. Impala started mining our land in 1966 but it was only in 1978 that we received our first royalty payment. There were many years after that when no royalty payments were received.

All this is detailed in the book Platinum Man by Ciaran Ryan and a University of North West academic study entitled The People of the Dew by Andrew Manson and Bernard Mbenga

Tribal leaders had tried for decades, without success, to get access to Impala Platinum’s mining records as we believed we were being cheated. What other conclusion were we to draw from the fact that mining had been in progress on our land for 12 years with not a single royalty payment being received?

It was Steve Kearney who redefined the relationship between ourselves and Impala, a process that took many years of often tortuous negotiations through much of the 1990s. We owe Steve an enormous debt of gratitude.

It is important to note the huge risks Steve took in attempting the reach an accommodation with the Bafokeng. He was almost fired by his higher-ups in the Gencor group (to which Impala belonged, before Gencor was acquired by BHP Billiton). Steve opened up the Impala books for our perusal and was determined to bring an end to this interminable dispute.

The fruits of his courage and wisdom were almost immediately evident in the more than 10-fold rise in Impala’s share price in the years immediately after the settlement.

All of this happened well before Niall’s arrival at RBH. The 2006 negotiations to which the Niall alludes refers to the conversion of the Bafokeng royalties from Impala into equity in Impala. We did this because there was talk of the South African government appropriating all royalties for its own benefit – which was just another attempt to dispossess us of our ancestral rights. This conversion of royalties for equity obviated that potential outcome, and Niall played an important role in securing this deal.

When Niall says ‘The (2006 royalties-for-equity) agreement was a very significant step in resolving four decades of animosity and was a great example of how a mining company and a traditional community could work together for mutual benefit," this is not true. The disputes had long since been resolved, as explained above. The architects of that resolution were Steve Kearney and the then tribal leaders.

As detailed in Platinum Man, Steve Kearney’s stewardship of Impala, and his resolution of disputes with the Bafokeng, delivered a “10-bagger” for shareholders – a more than 10-fold increase in share value.

It is true to say that during Niall’s eight year tenure as CEO of RBH, the portfolio grew more than 10-fold to some $4 billion, but there were important extraneous factors at play here, notably a spike in platinum prices to above $2,000/oz, and the strengthening of Rand against the US dollar (the same factors would have assisted Impala’s rerating in the years following the resolution of our disputes).

Niall also says in many ways RBH was acting like a Sovereign Wealth Fund. We see RBH more like an Endowment Fund, in that we tap into the Fund annually to facilitate our spending programmes. Your readers should know that we receive no income from the South African government for the funding of our clinics, schools, sewage, water supply, sport academy and other infrastructure. Sovereign Funds operate differently in that funds are sequestered and invested for future generations. We are definitely building wealth for future generations, though our budget process requires us to spend $1 each year for every $3 received. The rest is set aside for the future.

The formation of Royal Bafokeng Holdings

To put this in context, Royal Bafokeng Holdings (RBH) was formed through the amalgamation of two companies: Royal Bafokeng Resources (RBR) established in 2002, and Royal Bafokeng Finance, established in 2004. Steve Kearney was the chairman and CEO of RBR, which housed the Bafokeng mining interests.

Niall Carroll became the CEO of RBF, which was established to house non-mining related assets, to meet the Bafokeng’s objective of diversifying away from mining. Niall was involved in our diversification into financial services when in 2011 we acquired a significant interest in financial services group RMB Holdings and RMI Holdings. Our vision was to build the pre-eminent black-owned financial services group in the African sub-continent. Our portfolio went from 98% reliance on mining to less than 50% (much less now) and Niall did great work in executing this part of the strategy. We did this without having to sell off any platinum assets, though we did secure debt of R10 billion using our legacy platinum assets as security to fund our diversification.

The article starts off referencing the Bafokeng’s participation in the 2010 FIFA World Cup. Some points of correction here: the upgrading of the stadium was executed by the Royal Bafokeng Administration or RBA, not RBH, and the building of the five-star Marang Hotel in Phokeng (our capital) to host the English team was, in retrospect, not the best use of RBN funds.

To sum up, Royal Bafokeng Resources (RBR) housed the following Bafokeng mining interests: Impala Platinum Mine (Implats); Bafokeng Rasimone Platinum Mine (BRPM), later rebranded Royal Bafokeng Platinum (RBP), and Merafe Resources.

These three Bafokeng mining legacy assets which preceded Niall by decades, would account for more than three-quarters of the $4 billion RBH portfolio. The BRPM mine was secured as part of a negotiation, led by Steve Kearney, to achieve a more equitable deal with another company mining our land, Anglo Platinum.

RBF’s non-mining related assets include Astrapak; Liberty Star; Senwes, SA Eagle, Metair and Pasco. Whilst significantly minute in comparison to the Bafokeng legacy assets, the scene for diversification was nevertheless set.

We hope this clarifies and explains the long and involved background to the formation of RBH and who played what role in its conception and evolution to what it is today.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes