Black company buys shares in major South African gold mine

Gold mining giant Gold Fields Ltd. sold a 15 percent stake of its South African mining operations to the Black-owned company Mvelaphanda Resources Ltd. for $4.1 billion rand ($515 million), helping lead the way toward increased Black ownership of the country's vast mineral wealth.

Gold Fields hopes the deal will silence critics who said it dragged its feet in finding a partner to comply with efforts by the South African government to diversify ownership of the mining industry, Dow Jones reported.

The deal, widely expected by the market, now paves the way for Gold Fields to comply, at least in part, with the government's target of having 26 percent of South Africa's mining industry owned by Blacks within 10 years, with an initial target of 15 percent within five years.

The deal is subject to appropriate financial and legal agreements. If all conditions aren't fulfilled within 120 days, the agreement will lapse.

Gold Fields found its empowerment partner in Tokyo Sexwale, a Black former political prisoner who joined the Gold Fields board in 2001.

Sexwale founded Mvelaphanda Resources in 1998 after he left provincial politics. He's now one of South Africa's pre-eminent Black industrialists with business interests as diverse as platinum, diamonds, energy and banking.

Gold Fields is the world's largest unhedged gold producer, and South Africa is the world's largest producer of platinum, gold and chromium.

South Africa's mining industry has long been dominated by predominantly White-owned mining companies, which have controlled mineral resources since large quantities of gold and diamonds were discovered there in the late 19th century.

The minerals were so deep and impure that mines could not turn a profit without cheap Black labor. But it was the White establishment that became rich off the mines.

Transforming the industry was a major priority for the African National Congress-led government that came to power in the first all-race elections in 1994.