Executive chairman of African Rainbow Minerals, and President of CAF, Patrice Motsepe is changing the way Africa moves.
He wears many hats, including investor, executive, businessman, and futurist – roles that have paid him so well. According to Forbes, Motsepe’s net worth is now up to $3.1 billion.
He’s without doubt, a definition of a versatile entrepreneur, who has diversified his business interests in many fields of endeavor, but his major source of income comes from the mining sector through his company, African Rainbow Minerals, or in short, ARM.
He launched ARM in 1997. He began by focusing on the gold metal alone, but as the years went by, the company started expanding its interests to base metals, iron ore, manganese ore, alloys, platinum group metals, copper, nickel, and coal.
Beyond the mining sector, Motsepe is involved in other companies too, both locally and abroad, some of which have him on their board as an executive member.
Patrice’s father was a school teacher, and a small businessman, who owned a spaza shop that provided essentials for mineworkers at a closeby platinum mine.
A young Patrice would sometimes operate the shop after school and during weekends. He learned the basic principles of business during the time he ran the spaza shop, this marked his first exposure to the business world.
Now the 100 thousand trillion rand question, “how did Motsepe go from being a spaza boy to having his pockets overflow with Randelas??”
Well its not an A B C answer, but to fully understand Motsepe’s rags-to-riches story, let’s take it back to Ga Rankuwa, North of Pretoria, the place where Patrice Tlhopane Motsepe spent most of his childhood.
Patrice was born on the 28th of January 1962, to Augustine and Key Motsepe. His father was a schoolteacher by profession, he was also a small businessman, who owned a spaza shop, mostly frequented by mineworkers.
Contrary to what most people believe, Motsepe wasn’t born rich, or had any wealthy relatives. Like many black South Africans during apartheid, his parents were ordinary struggling people.
Despite the difficult upbringing, Motsepe still had high hopes that things would turn out for the better in the future, and didn’t let his poor background, limit him in any way or form, into trying really hard to make a better life for himself, and those close by him.
Motsepe went to a Roman Catholic boarding school in the Eastern Cape.
After matriculating, he proceeded to obtain a bachelor of arts degree at the University of Swaziland, which was subsequently followed by a law degree from the University of the Witwatersrand.
After getting his LLB, Patrice got a job offer from Bowman Gilfillan law firm in 1988.
The firm was predominantly ran by whites, but after noticing Motsepe’s drive, commitment and excellence in his job activities, his bosses took a unique interest in him.
For over a year, Motsepe was a visiting attorney at McGuire Woods Law in the US, under the American Bar Association program.
During his stay, he met several mining magnates and organizations. He studied their daily operations, which sprouted a zeal, and attraction in him for the business.
This new exposure caused Motsepe to start studying the mining business in every way he could. He read all kinds of books & articles, and studied anything he could find on mining, just so he could have a complete understanding, and the technical know-how of how the business operated.
When he came back to SA, he continued working for the firm and once again, his hard work & commitment earned him a big win, as he was chosen to be the first black partner in Bowman Gilfillan in early 1994.
To make partner at a tender age of 32 wasn’t an easy feat, as Bowman Gilfillan has always been one of the most prestigious law firm in the country, so it probably took something out of the ordinary.
ANC wins elections…
Shortly after the ANC won the 1994 democratic elections, Nelson Mandela became President of the country and his government made favorable policies to support black businesses.
Motsepe left Bowman Gilfillan and took full advantage of the opportunity.
He launched Future Mining in 1994, a company which provided necessary chores in mining, which includes the removing of gold dust inside mine shafts for the Vaal Reefs Gold.
African Rainbow Minerals
Around 1997, gold prices plummeted heavily in the international market, this opened a window of opportunity and promted Motsepe to take a leap in the mining business with a full force.
During that time, Anglo Gold put an $8.2 million price tag on their low-performing small mine shafts, in order to redirect all their focus on the larger and highly performing mines.
Once the gold mines were up for sale, Motsepe launched African Rainbow Minerals, through which he would later buy the mines.
At this point, Motsepe was 3 years in the mining business and realized that success in mining, didn’t necessarily depend on the size alone but rather, any mine that better managed their finances and operations.
Although he had been saving for years, the $8.2 million price tag was just above his pay grade.
Faced with this dilemma, Motsepe ran to the banks for financial backup but they rejected him for two reasons: the mines he was trying to buy weren’t profitable and also, no other black person has ever owned a mine before.
Bobby Godsell, the CEO of Anglo’s Gold & Uranium division, came to Motsepe’s rescue with the financial muscle.
Bobby knew of Motsepe during the time he was providing services with Future Mining, they got to know each other and during that time, he observed Motsepe burning desire to venture into the mining business.
Bobby handed the mining shafts to Motsepe, under terms which allowed him to repay the $8.2 million debt out of the future earnings of the company.
Like all ventures, it wasn’t easy at first because the gold markets kept on plummeting and at some point, Motsepe was forced to lay off some of his stuff to keep the mines afloat.
After 12 months of being in charge, Motsepe shocked the entire mining industry by making the mines profitable.
In just 3 years, he turned the ship around by paying off all the debts and made the necessary foundations to make African Rainbow Minerals to become one of the largest mining companies in the world.
After this success, in the year 2000, Motsepe partnered with Anglo Platinum, the world’s largest platinum producer. This partnership was a 50 – 50 ratio, and together, they created the largest platinum-producing mines in South Africa.
In 2002, the company was listed on the Johannesburg Stock Exchange.
In the same year, Motsepe won two major awards, South Africa’s Business Leader of the Year, where he was voted by the chief executive officers of the top 100 companies in South Africa. And also, the winner of the Ernest & Young Best Entrepreneur of the Year Award.
ARM x Harmony
More deals soon followed, as Motsepe led ARM Gold into a merger with Harmony Gold in 2003 to form, ARM Gold, the 5th largest gold producer in the world, with an output of 4.1 million ounces per year.
Motsepe didn’t stop with mining. In the same year, he launched Ubuntu Botho Investments and a year later, made a successful black economic empowerment deal with Sanlam.
When the deal came to an end in 2014 after the debt was paid, UBI acquired a 13.5% stake in Sanlam. UBI has an 18.1% voting stake in Sanlam as its empowerment partner, with Motsepe personally owning 55% of UBI.
UBI then founded African Rainbow Capital, a wholly owned subsidiary of UBI. ARC began to invest in what would ultimately be more than 40 companies including banking rookie, Tymebank, and telecommunications startup, Rain.
He also bought a 51% stake into Sundowns to partner with its founders. The following year, he increased his stake from 51% to 100%, and officially renamed the club, Mamelodi Sundowns.
According to Motsepe, renaming the club to Mamelodi Sundowns was a nod to its heritage in Atteridgeville, Eersterus, Laudium, and the club’s home in Mamelodi.
In May 2004, a range of indivisible transactions involving certain interests of Anglovaal Mining, ARM Gold and Harmony, resulted in the formation of two entities, Harmony Gold in its current form, and African Rainbow Minerals.
In 2009, Motsepe became the first black dollar billionaire in Africa. He’s also known for his leadership in philanthropy. In 2013, he joined The Giving Pledge alongside Bill Gates and Warren Buffet, where he committed to give half his wealth to charitable causes. And in 2018, he pledged a further $250 million towards land reformation in South Africa.
To appreciate the scale of the business empire Motsepe has built over the last 24 years, here’s a breakdown of all the investments he’s made in South Africa and abroad:
Motsepe owns 39.7% of African Rainbow Minerals, a holding company owning a number of subsidiaries in the mining sector including, Harmony Gold, ARM Platinum, ARM Ferrous, and ARM Coal.
Motsepe owns 12.1% of Harmony Gold, the 12th largest gold mining company in the world, with mining operations in South Africa, and Papua New Guinea.
Under ARM Platinum, Motsepe owns 3 platinum mines. Platinum is a dense, stable and rare metal that is often used in jewellery for its attractive, silver-like appearance, as well as in medical, electronics, catalytic converters, laboratory equipment, electrodes,resistance thermometers and dentistry equipment.
The mines includes, Modikwa, Two Rivers, and Nkomati.
With ARM Ferrous, Motsepe owns 8 mines focusing mostly on any metal that contains iron. Ferrous metals are favored mostly for their tensile strength and durability and are so are often utilised
The mines include, Khumani, Beeshoek, Nchwaning, Gloria, Cato Ridge, Cato Ridge Alloys, Sakura and Machadadorp.
Under ARM Coal, Motseepee has a 20.2% in certain Glencore Operations in South Africa, Participating Coal Business, and a 26 percent attributable beneficial interest in Goedgevonden.
Ubuntu Botho Investments
Motsepe owns 55% of Ubuntu Botho Investments, popularly known as UBI, an investment holding company owning an 18.1% stake in Sanlam, the largest insurance company in Africa, that is listed on the Johannesburg Stock Exchange, A2X, and the Namibian Stock Exchange.
UBI also owns 100% of African Rainbow Energy and Power, abbreviated AREP. The company is primarily focused on clean energy solutions including renewables, hydro, gas and complementary Transmission investments.
AREP has a controlling 40% stake in SOLAR Group, a 15% shareholding in SunEdison, a 30% equity in the Ngodwana Biomass Project from Fusion Energy, owns a 22.5% stake in wind power generators, Kangnas and Perdekraal East wind farms.
Motsepee’s UBI wholly owns African Rainbow Capital(ARC), a fully black owned and controlled company of significant scale, focusing on opportunities in the South African and African financial services and diversified investments industries.
In the investment and asset management world, African Rainbow Capital owns a shareholding stake in Alexander Forbes, Colourfield, InFund Solutions, Khumo Capital, Lima Mbeu, Portfolium, QED, Alternative Prosperity, Bravura, Constellation Capital, EdgeGrowth, Ooba, Sinayo, ARCH Emerging Markets Partners Limited, and Fledge Capital.
In the banking sector, African Rainbow Capital owns AI Fund, TymeBank, and Tyme Global.
In the insurance, life cover, medical aid, and funeral plans world, ARC has a shareholding stake in, African Rainbow Life, EBS International, Life Cheq, Rand Mutual Holdings, Capital Legacy, Indwe, Afrocentric, National Health Services and Smart Health Investments.
In the important agricultural sector, African Rainbow Capital has invested in Acorn Agri & Food, Subtropico, and RSA Group.
In the real estate sector, African Rainbow Capital owns a shareholding in ARC Real Estate, Barlow Park, Majik and Val de Vie.
In the highly profitable telecommunications sector, African Rainbow Capital owns a shareholding stake in Metro Fibre, and Rain.
In the technology sector, African Rainbow Capital has a stake in Autoboys, Bluespec, Capital Appreciation, EOH, GemCap, and Humanstate.
In the Mining, Construction and Energy industry, African Rainbow Capital owns a shareholding stake in, Afrimat, GAM, Kropz Group, and LMF.
ARC also owns a 20% stake in cape Town based exchange, A2X, which was officially launched in 2014 by Sean Melnick, Ashley Mendelowitz, and Kevin Brady. Their goal was to create a new South African exchange to bring healthy competition to the marketplace.
Motsepe is a huge sports fan, apart from owning Mamelodi Sundowns, he also owns a 37.5% stake in Blue Bulls, a rugby union team that participates in the annual Currie Cup tournament. Together, alongside South Africa’s richest man, Johann Rupert, control 75% of Blue Bulls.
In January of this year, while many of us were trying to make ends meet, Motsepe splurged $5 million on a luxury wine farm called Hidden Valley, located near Stellenbosch and Somerset.
Patrice Tlhopane Motsepe’s success story is a remarkable one showing how curiosity, doggedness, perseverance, and the knack to exploit great opportunities as they come, can determine how successful or not, any individual could become.