African conglomerate Moti is open to $500m stake sale

(Bloomberg) — Sub-Saharan conglomerate Moti Group is considering selling a $500 million stake in the group that spans chrome-ore mining to aviation.

Chairman Zunaid Moti said he’d be willing to sell as much as 25 percent of the closely held company to the right partner, but ruled out any prospect of an initial public offering.

“At some stage we would look to partly monetize,” Moti said in an interview in London. “I want to take some money off the table and put it into other things. Now might be a good time.”

The Johannesburg-based company also offers security and transport services and has increased its exposure to Zimbabwe since former President Robert Mugabe was removed in November. His replacement, Emmerson Mnangagwa, has said the country is “open for business” and that he’ll ease local ownership rules and re-engage lenders such as the International Monetary Fund.

Moti said earlier this year his company plans to spend $250 million in the next four years in the country.

“We would like to attract a high net worth who has a vision,” said Moti, who would also consider selling stakes in individual units such as the chrome business. “There has to be synergies with a new partner.”

Zimbabwe Chrome

Moti’s flagship operation is its African Chrome Fields Ltd. unit which mines the stainless steel ingredient in Zimbabwe. The company, which sells all its chrome ore to Glencore Plc, mines about 420,000 metric tons a year and could boost output to about 1 million tons by the end of 2019, the chairman said.

The company plans to increase production at its own alluvial mines, and is also looking to buy from artisanal miners locally. Moti has set up a training program for those small-scale miners, will provide them with safety equipment and will be able to pay them up to four times more than they currently get for selling hand-mined ore.

While artisanal production has a chequered reputation — often associated with child labor and environmental damage — various programs are being developed to help combat those issues. Diamond giant De Beers is starting a pilot program in Sierra Leone to trace the route from mine to consumer for what it calls ethically-sourced artisanal gems. Similar projects are being developed for commodities like cobalt in the Democratic Republic of Congo.

(By Thomas Biesheuvel)