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The Economy
FINANCIAL INFORMATION
ROYAL BAFOKENG ADMINISTRATION (RBA)
RBA is the infrastructural and service delivery entity of Bafokeng. Situated on the upper slopes of Direpotsane hill overlooking Phokeng, the Civic Centre is the headquarters of the RBA, Bafokeng' very own civil service.
With an annual budget of some R180 million drawn mainly from mining royalties, and supported by a staff of about 300 people, the RBA is responsible for implementing community development projects and maintaining in good order the 2 000 sq kilometers area owned by the Royal Bafokeng Nation.
The four-storey Civic Centre (opposite) has been developed over some 25 years, with major upgrading undertaken in 2003. The Royal Bafokeng Administration (RBA) implements policies, programmes and projects adopted by the Royal Bafokeng Nation's Executive Council which has its chambers in the Civic Centre. Also in the Civic Centre is the Tribal Court. Administered by the RBA's legal and corporate department, the court adjudicates over local civil issues and disputes. The projects department is the largest RBA division and has invested over the years in excess of R2 billion to develop an increasingly modern and sophisticated infrastructure for the Bafokeng people.
Design and construction of development projects is usually outsourced to professional companies, with processes involved being managed by the projects department. It is also responsible for ensuring that environmental, health and safety standards are maintained, and that areas in which infrastructure projects are implemented are rehabilitated. RBA’ budget is managed by the finance department which is responsible to the Royal Bafokeng Nation Treasury.
An audit department monitors policy implementation while a human resources department attends to personnel matters and facilitates skills training for staff.
The town and regional planning department is responsible for orderly residential and commercial development of Bafokeng land. While new suburbs and development areas are neatly laid out, one of the department's major challenges involves the introduction of modern planning principles in older villages which have often developed haphazardly.
A communications department is responsible for keeping the community informed about RBA projects and activities through publication of Segoegoe, a regular newsletter.
A community affairs department headed by the Queen Mother attends to welfare issues.
The Civic Centre has its own management and security teams.
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INVESTMENT OPPORTUNITIES
INTO THE FUTURE
Even before his enthronement as King of the Royal Bafokeng Nation, Kgosi Leruo Molotlegi set in motion the vital next phase in the development of his people. His brother, Kgosi Mollwane Lebone Boikanyo Molotlegi, paved the way for the initiative by proclaiming Vision 2020. This boldly challenges the Bafokeng people to reduce their dependency on their diminishing mineral assets and to become a self-sufficient community within the first 20 years of this century. Kgosi Leruo's challenge is to devise a workable plan to realize Vision 2020.
Until now, the Bafokeng have relied heavily on natural assets.
They originally settled in a valley that captured heavy overnight dew, holding the promise that the land would be fertile and that the community would prosper. They sweated to buy the land, repelling invaders and imperialists as they did so. They have had the extraordinary good fortune to see the discovery on their land of the world's largest deposits of platinum group metals. And they have wisely invested royalties and dividends from mining companies on their land to establish their own civic administration and social services.
Indeed, nature has been exceedingly generous to the Bafokeng, but, as they know only too well, the bounties of nature are not limitless. Even mineral deposits wrought by nature over 2 billion years are finite. Mined at today's rates of extraction, mineral reserves on Bafokeng land will last for another 35 or 40 years.
Measured against the millions of years it took for the minerals to form, this brief speck of time will soon be over.
Thus, the time has come for the Royal Bafokeng Nation, like the oil-rich Middle East, to reduce its dependency on natural resources and develop new sources of wealth. The Bafokeng, Kgosi Leruo concluded, had to diversify by securing interests in other sectors of the economy. They had to develop a more balanced portfolio, as it were.
For decades, mining royalties and dividends were invested in community development through a single agency: the Royal Bafokeng Administration (RBA) which was responsible for developing and maintaining infrastructure, and delivering social ser-vices. Clearly, if the Bafokeng were to broaden its interests, the community would need dedicated agencies to achieve its goals.
A full year before he was enthroned as king of the Bafokeng in August 2003, Kgosi Leruo Molotlegi established Royal Bafokeng Resources (RBR) to manage and expand the Nation's mining and related interests, and the Royal Bafokeng Economic Board (RBEB), now called the Local Economic Development Department, to facilitate development of entrepreneurship among his people. Royal Bafokeng Finance (RBF) was formed after his enthronement to develop non-mining holdings for the nation. RBR and RBF have merged to form Royal Bafokeng Holdings (RBH) and is based in Johannesburg.
RBA and LEDD are directly involved in community development, the former acting as a civil service, and the latter as a small to medium business development agency.
Wholly owned by the Royal Bafokeng Nation, RBH is an investment company responsible for growing and diversifying the community's assets and ensuring a steady flow of income to fund social development.
The establishment of RBH could not have come at a more opportune moment. It is at the right place at the right time, and with all the right credentials.
is well-capitalised, and it is wholly black-owned, making it an ideal partner for white-owned companies which must comply with legislation promoting black economic empowerment in South Africa.
These companies have to broaden their ownership base by including black shareholders, giving companies with black shareholdings preference in procurement of supplies and services, and ensuring advancement of black staff in the workplace.
As the first of the new agencies, RBH goes on the acquisition trail with an impressive current portfolio of assets: a 50/50 joint venture with Anglo Platinum in the Bafokeng Rasimone Platinum Mine situated on land owned by the Bafokeng and the mining house; a 1,5% holding in Impala Platinum which operates on Bafokeng land and pays the Royal Bafokeng Nation a 22% royalty; a majority, 33% holding in Merafe Resources, formerly SA Chrome & Alloys, which operates a chrome smelter in the Bafokeng area and the nearby Horizon chrome mine; and interests in granite mines on Bafokeng property.
Already, RBH's holding in Merafe is showing great promise. Merafe has formed a joint venture with multinational mining group Xstrata. This has created the world's largest ferrochrome producer and given RBR, through its holding in Merafe, a growing stake in the operation.
The company has also moved swiftly to develop interests in enterprises outside the mining sector. Its acquisition of a 20% stake in JSE Securities Exchange-listed plastics packaging group Astrapak represents the Royal Bafokeng Nation's first non-mining holding.
It has also ventured into the financial services arena by acquiring a 10% stake in SA Eagle Insurance Company Limited, South Africa's third largest short-term insurer.
RBH is leveraging its new partnerships to produce additional benefits, not only for the Bafokeng community, but also for neighbouring communities in North West province.
RBH, Astrapak and investment banker JP Morgan have pooled resources and supported the SA Institute of Entrepreneurs to train 700 teachers to take classes in basic business and economics skills in 80 North West schools, hopefully placing pupils in a better position to become entrepreneurs in a world where opportunities in formal employment are diminishing.
By investing in such groups as SA Eagle, RBH also hopes to create a platform for development of financial products tailored to the needs not only of the Bafokeng, but also of other small communities.
Meanwhile, LEDD aims to "lead the Bafokeng into becoming an economically self-sustaining community and one of the leading economically-active communities in South Africa.
Kgosi Leruo sees its role in particularly ambitious terms. He is of the view that in order to become prosperous, a community must produce one "world class" entrepreneur from every 20 of its members. With 300 000 Bafokeng living in South Africa - and half of them in the Bafokeng area - this means the community must strive to produce no fewer than 15 000 entrepreneurs. RBEB offers would-be entrepreneurs coaching, advisory services, mentoring, on-job training, and formal, in-class training. It has also facilitated the consolidation of numerous micro enterprises into a few sizeable companies, enabling them to compete for contracts in the Bafokeng area and further afield.
Development of enterprises has in part been spurred by the South African government's black economic empowerment policy. Thus, local entrepreneurs, supported by LEDD, have formed joint ventures with established companies to supply mines in the Bafokeng area. This has led to the establishment of locally-based companies specializing in such enterprises as drilling operations, manufacturing of overalls, and engineering. Thus, Kgosi Leruo Molotlegi is consolidating the gains his people have made over the centuries, establishing a broad base for them to grow and to realise the goals of Vision 2020 and beyond.
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LOCAL INFRASTRUCTURE
Bafokeng reached a milestone some two years ago when all 16 000 formal households in the area finally had full access to water in their homes. Water is purchased in bulk from two major water boards and stored in 17 reservoirs built by the Royal Bafokeng Administration, which has also co-funded establishment of a water purification plant.
Supplying water to 16 000 households is a big enough challenge, but it has been made even more demanding because small, remote communities have also had to be connected. This has necessitated the laying of long pipelines at considerable cost to serve small numbers of consumers.
Development by the RBA of a road network has been accompanied by a high degree of innovation. Some 410 kilometres of hard surfaced roads have been laid, linking the 29 villages in the Bafokeng area. Most of these have been tarred, but in more recent times RBA has turned to using paving blocks. These are manufactured by its own Bafokeng Brick and Tile works and laid by contracted local entrepreneurs who employ local people. This not only circulates money within the community, but also empowers contractors to use their skills to undertake work in neighbouring areas.
Paving blocks have proved to be more durable than asphalt and therefore require less maintenance. However, expensive heavy machinery is not required when repairs need to be done, enabling local people to undertake maintenance work. In addition, RBA has laid on paved or graded gravel streets in villages and provided lighting.
LOCATION AND DEMOGRAPHICS
FOR THE PEOPLE
Even before the Bafokeng were able to draw on mining royalties to fund community development, its people often used their meagre resources to build their own facilities, such as basic educational structures.
The rich platinum-bearing reefs under their land were only discovered in 1924, and revenue from leasing mineral rights only started to accrue in 1928, though it would take another 60 years of hard bargaining before the Bafokeng were able to reach mutually acceptable agreements with mining houses, and to draw a more equitable share of mineral revenues.
Over those years, and with increasing tempo in more recent times, they have used their growing mining revenues to fund development of their own infrastructure serving the estimated 300 000 Bafokeng people, about half of whom live in the area.
They have developed their own governance institutions with their own civic centre and their own civil service; some 50 schools; a health centre and satellite clinics; roads and street lighting; reservoirs and water pipes connecting all homes in their 29 villages; supplementary electricity supply; a shopping mall; recreation and sports facilities; businesses to stimulate local economic development; and, soon, institutions to support the arts and culture, such as a Youth Development Centre.
Increasingly, too, the Bafokeng have accepted that they have a responsibility towards less fortunate communities. They recently funded development of a school in the remote village of Uitkyk, and built administrative offices for another community.
Their biggest single investment, of course, has been the acquisition of 2 000 sq kilometers of their ancestral lands, much of which, as we have seen, was secured even before the discovery of minerals on their property. On the following pages, we look at some of the facilities and amenities established by the Royal Bafokeng Nation.
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REASONS TO INVEST
IN PERSUIT OF PLATINUM
Two billion years before the Bafokeng settled on the land they now own, a unique geological event was unfolding in the region. Massive and repeated volcanic eruptions over an area of 65 000 square kilometers transformed the landscape into a sea of magma, eight kilometers thick in places, which injected itself into the pre-existing sedimentary rocks.
Given the enormous volume of magma involved, the cooling and crystallization process was extremely slow. The complex buckled under its own weight into a giant saucer formation measuring some 300 kilometers end-to-end, though some have suggested the buckling was due to impact from a meteor.
Different minerals precipitated as the temperature fell, creating the world's largest igneous intrusion, now known as the Bushveld Complex.
Most of the minerals formed from magma are of minimal economic importance, but repeated volcanic eruptions within the Bushveld Complex produced a layering effect, with high concentrations of single minerals. Trapped within the sedimentary rocks - formed from alluvial deposits built up over millions of years - are fossils of the earliest preserved life forms, such as fossil algae.
The Bushveld Complex is today considered one of the great geological wonders of the world, and its largest single source of chromium, vanadium and platinum group metals. It has fascinated geologists for the best part of a century, particularly since the discovery of an outcropping of a platinum-rich reef in 1924 by German geologist Dr Hans Merensky.
Merensky traced the reef, which was named after him, in an arc extending 300 kilometres. A second reef known as UG2 was subsequently found to underlie what became known as the Merensky Reef by between 60 metres and 400 metres. The reefs vary in thickness from 30 centimetres to 12 metres.
Some of the richest deposits lie beneath the 2 000 sq kilometres of land the Bafokeng had fought to acquire since the late 1860s when their visionary Kgosi (King) Mokgatle sent young men to work on the newly discovered diamond fields in Kimberley with instructions to repatriate their earnings to enable the community to start buying the land they had occupied for several centuries.
Discovery of the Merensky Reef was fortuitous for the Bafokeng.
Struggling to repay debt they had incurred to continue buying land, the discovery attracted prospectors, and by as early as 1928, the Bafokeng were earning some 3 000 pounds from mineral options. But the discovery also embroiled the Bafokeng in complex agreements enabling early mining companies to extract platinum group metals on their land.
Negotiations were conducted on behalf of the Bafokeng by the Transvaal Native Affairs Department, a precursor to the dreaded Department of Bantu Affairs that would in later years become identified with apartheid's crudest excesses.
In 1948 the National Party swept into power and formalized the policy of racial separation, and in 1972 Bafokeng land was corralled into Bophuthatswana, one of several ethnic "homelands" created by the apartheid regime in an effort to confine black political rights to specific areas of the country. "The struggle to retain our land and our mineral rights had started all over again, because as small as the Bafokeng group is numerically, it was in a position to contribute significantly to the coffers of the homeland government," noted Kgosi Leruo Molotlegi in an address at University of Pretoria in 2003.
The homeland government of Lucas Mangope presumed to negotiate the Bafokeng's share of royalties on the tribe's behalf. Mangope accused the late Kgosi Edward Molotlegi of complicity in a coup attempt in the early 1980s, a charge emphatically denied by Edward who nevertheless went into exile in Botswana.
Mangope appointed Edward's brother George as head of the tribe, against tribal tradition and without the support of the tribal council. This meant that the royalty agreements were being negotiated without the participation - and against the express wishes - of recognized tribal leaders.
A 15-year legal dispute ensued, and only came to an end in 1998 when Impala Platinum, which had started mining Bafokeng land in 1969 and was now under new management, agreed to increase royalty payments to 22% of profits and grant one million shares to the Bafokeng, who were also given representation on the Impala board. The community then formed Royal Bafokeng Resources Holdings (RBR) to house the tribe's resources and mining interests and seek out new mining opportunities.
In 2002, RBR, now RBH announced a 50-50 joint venture with Anglo American Platinum Corporation to combine their Boschkoppie and Styldrift farms for the development of the 485 000 ounces-a-year Bafokeng Rasimone Platinum Mine.
Other Royal Bafokeng Nation investments and mining interests include granite and 33% of Merafe Resources (formerly SA Chrome and Alloys Limited). RBH says it now aims to grow by expanding its geographic confines and commodity profile by pursuing business opportunities with partners in activities that include exploration, mining and beneficiation.
Demand for platinum remains robust and during previous recessions demand actually increased. Demand from auto catalyst manufacturers, who use platinum as their key raw material, is underpinned by tighter environmental laws; fuel cell technology - in which platinum is also the key raw material - is less than a decade away from commercial application; and, most importantly, the world has nowhere else to go to satisfy its growing demand for the "white metal".
OUT AND ABOUT
The land of the Bafokeng deserves closer inspection. Its wide, open plains broken by innumerable low-lying hills and ridges are home to a special people.
Having fought the good fight to secure their land and income from the vast mineral wealth beneath it, the Bafokeng want other people to visit their home and share the remarkable story they have to tell.
The area is already well established as a tourism destination, with two world-class attractions on the fringes of the land of the Bafokeng: the exotic Sun City and Lost City gaming and golf mecca; and neighbouring Pilanesberg National Park.
The Bafokeng add a rich cultural dimension to this singular part of the world.
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MODEL OF GOVERNANCE
THE BEST OF BOTH WORLDS
In an age when hereditary rule is often regarded as being an anachronism, the Bafokeng believe their form of traditional governance, and adaptations they have made to it over the years, neatly balances recognition of tribal custom and expression of popular will.
As the Bafokeng King, Kgosi Leruo Molotlegi, explained in a speech at Brown University in the United States: "Our traditional form of government espouses certain principles of democracy. These include mechanisms to ensure that Kgosi is carrying out the will of the people, political representation at multiple levels of local government, and even a system for electing village representatives to the King's consultative council. There are examples in the historical record of Bafokeng Kings being fined for not carrying out the will of the people."
Perhaps the most significant adaptation the Bafokeng have made to their form of governance followed South Africa's transition from apartheid to democracy in the early 1990s. The Bafokeng moved with the times and introduced a system of electing certain community representatives. This, in turn, saw a departure from a patriarchal form of governance, with a number of women being elected to the Royal Bafokeng Nation executive council. As Kgosi Leruo has noted: "We are rooted in - but not bound by - tradition."
The institution, status, and role of traditional leadership is protected by the South African Constitution. The inclusion in the country's Parliament of a House of Traditional Leaders is in itself, says Kgosi Leruo, an example "of the happy marriage between the modern and the traditional". He sees traditional governance as a "way of organising community life that is founded on basic human principles such as respect, sense of community, and sense of commitment to one's neighbours as well as oneself. It is around these principles that our system has developed, and it is always changing to meet the needs of the times."
The 29 villages that make up the Bafokeng community are divided into 72 traditional dikgoro (wards), each of which is regulated by a hereditary kgosana (headman) and Bo-mmadikgosana (headmen's wives). The kgosana is assisted in carrying out his duties by a minimum of four bannakgotla (ward men).
Duties of the kgosana are many and varied. He must keep Kgosi's office informed of births, marriages and deaths, and of pressing issues or specific problems in his community. He must resolve disputes ranging from the use of resources to family matters.
If Kgosana is unable to resolve disputes, such as those within a marriage, he refers them to the Royal Bafokeng Nation Tribal Court which sits in the Civic Centre in Phokeng. If an aggrieved party is unable to secure justice through these channels, he or she can then seek redress through the formal Magistrates' Court in neighbouring Rustenburg.
Kgosana must also ensure development of the community. For example, he must identify talented young people as candidates for Royal Bafokeng Nation bursaries supporting tertiary education. On another level, Kgosana must supply character references for young people seeking work.
The Royal Bafokeng Nation as a whole is represented by the Executive Council consisting of 39 members, 29 of whom are elected by villagers, and 10 of whom are appointed by the Kgosi. The Executive Council has the status and functions of a local authority, with committees responsible for portfolios such as youth, community development, health, and education.
Whenever important decisions affecting the entire community need to be made, the Kgosi convenes the Supreme Council of the Royal Bafokeng Nation. This consists of the Executive Council, Dikgosana, and bannakgotla.
The highest-ranking decision-making body in the Nation is called Kgotha Kgothe. This is a general meeting of all Bafokeng that is held twice annually and whenever there is an important matter to debate.
"My mandate comes from consulting with this body," explains Kgosi Leruo. "The people can overturn my input and views on any given matter through the general meeting."
Decisions made by these councils are enacted by the Royal Bafokeng Administration (RBA) which is effectively the Nation's civil service and employs a staff of some 300 people. RBA is funded by the Royal Bafokeng Nation out of revenue derived from royalties and dividends received from mines operating on the Nation's land. An estimated R2 billion of this money has been invested in infrastructure and services for the community.
"As a traditionally governed entity, then, the Royal Bafokeng system of governance embraces a range of mechanisms for ensuring that people's concerns, opinions, and ideas are an integral part of policymaking, and that there are sufficient checks and balances in place so that no branch of governance can act on its own," explains Kgosi Leruo.
"With the introduction of elected village councilors, there are also more women in positions of authority than ever before.
"And, although we rely on indigenous law and traditional forms of conflict resolution to mediate most conflicts at the local level, we are also subject to the laws and legal procedures of the South African state." This "democracy within a democracy" continues to adapt. As Kgosi Leruo has said: "We are constantly devising new ways to ensure that everyone's voice is heard."
A recent innovation has been Dumela Phokeng. Drawing inspiration from the word dumela, meaning "greetings", this inter-active initiative sees Kgosi Leruo and his key representatives visiting each of the Nation's 29 villages. These weekly meetings at the beginning of the year enable Kgosi Leruo to see for himself what is happening on the ground and afford villagers opportunities to tell him what is on their minds.
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