Patrice Thlopane Motsepe is a South African mining billionaire entrepreneur, and the current President of the Confederation of African Football.
Who is Patrice Motsepe?
Patrice Motsepe is a South African mining businessman, and the country’s first black billionaire. He is the founder of African Rainbow Minerals and serves as its executive chairman. The company is involved in a variety of mines, including gold, base metals, ferrous metals, and platinum. He serves on the boards of several corporations, including Harmony Gold, the world’s twelfth-largest gold mining company. In 2003, Motsepe founded Ubuntu-Botho Investments (UBI), and in 2019 he owned 55% of it. In 2004 UBI entered into a BEE deal with Sanlam, an insurance and financial services company that operates across Africa. In 2013, he became a part of ‘The Giving Pledge’, where he committed to give away half of his entire wealth to charity.
Motsepe, aside from being a business titan, is also a fan of football, as evidenced by his participation in the sport. He has been the President of the Confederation of African Football since March 12, 2021, and he now owns Mamelodi Sundowns, a South African Premier Soccer League football team, after initially purchasing a 51% stake in the club. In addition to this, Patrice Motsepe bought a 37% stake in South Africa’s famous rugby club Blue Bulls Co., on the 22nd of November, 2019.
Early Life
Patrice Motsepe was born on January 28, 1962, in Pretoria, South Africa, to Kgosi Augustine Motsepe, a chief of the Tswana Mmakau branch, and Key Motsepe, his mother, who passed away in 2004. Patrice’s father was a schoolteacher and the owner of a Spaza shop popular with black mine workers. Motsepe learned basic business principles from his father at this shop, as well as firsthand experience with mining.
Despite growing up during the apartheid era, Motsepe fared better than many other South African blacks. His father, who was exiled for opposing apartheid, went on to become a successful liquor distributor by partnering with South African Breweries.
Motsepe and his six siblings attended a Roman Catholic boarding school in Eastern Cape province, owing largely to his father’s opposition to South Africa’s segregated public school system, which provided the country’s blacks with limited educational opportunities.
He graduated from the University of Swaziland with a Bachelor of Arts degree and the University of the Witwatersrand with a law degree. He became an expert in mining and business law, laying the groundwork for his future success.
Motsepe’s Career
Patrice Motsepe joined the law firm Bowman Gilfillan as the firm’s first black partner in 1994, the same year Nelson Mandela was elected as South Africa’s first black president. He practiced mining and business law at a time when the new government was promoting black empowerment and entrepreneurship through the Black Economic Empowerment (BEE) laws. As a result, when Bowman Gilfillan restructured in the post-apartheid era, Motsepe left to pursue a career in the mining industry.
He believed he could turn less-productive shafts into profitable operations by employing management techniques such as low base pay combined with production incentives. More importantly, he discovered ways to benefit from the country’s Black Economic Empowerment (BEE) laws, which required companies to have at least 26% black ownership before a mining license could be granted.
Motsepe created Future Mining in 1994. At the time, the company provided contract mining services that included the cleaning of gold dust from inside mine shafts, for the Vaal Reefs Gold mine, and in August 2011, it was named the best employer in South Africa.
Later, in 1997, when gold prices were low, he purchased marginal gold mines on favorable terms from AngloGold, a global gold mining company that was formed in 2004 . AngloGold (now AngloGold Ashanti) sold him six gold mine shafts for $7.7 million, allowing him to repay his debt from the company’s future earnings, which became known as African Rainbow Minerals.
Patrice Motsepe became a non-executive director at Absa Group and Sanlam in 2004, and he has served in the position since 2004.
Motsepe also founded African Rainbow Minerals Platinum (Proprietary) Limited and ARM Consortium Limited, which later split ownership equally with Anglo American Platinum Corp Ltd. Motsepe has been the Chairman of Teal Exploration and Mining Incorporated since 2005. Motsepe’s ARM struck deals with heavyweight miners Harmony and XStrata, propelling the company to prominence in South Africa’s mining industry.
According to ARM’s recent statistics, which were released at the end of 2018, the business had total consolidated assets of R34 billion, which included the company’s R1.4 billion investment in Harmony Gold. It has a 14.5% stake in Harmony. As a result, ARM’s market capitalisation was around R23.97 billion in June 2018.
Investment: Ubuntu-Botho Investments, Sanlam Limited, ARC
Patrice Motsepe didn’t stop with mining, as he is also the chairman of Ubuntu-Botho Investments, as well as being the deputy chairman of Sanlam Ltd. He founded Ubuntu-Botho Investments (UBI), in 2003, and a year later, he struck a successful BEE contract with Sanlam. UBI bought a 13.5% stake in Sanlam when the contract expired in 2014 after the debt was settled. As its empowerment partner, UBI has an 18.1% voting stake in Sanlam, with Motsepe personally holding a 55% stake in UBI.
UBI then established African Rainbow Capital (ARC) as a wholly owned subsidiary. ARC began investing in what would eventually amount to more than 40 firms. African Rainbow Capital Investments debuted on the JSE in September 2017. ARC owns a 51% stake in ARC-I.
Only a year into operations, the new investment company nearly doubled its assets, from R4.4 billion to R8.1 billion. ARC-I is worth R4.5 billion and has a diverse portfolio of solid investments, including some with a sense of innovation.
ARC’s investment portfolio includes TymeBank, Rain, a telecommunications company, Val de Vie, a luxury residential estate, Afrimat, and BKB, as well as a minority position in pension fund administrator Alexander Forbes.
According to ARC Investments’ recent financial statements, it made new investments of R497 million in six months, in 2018, including an extra holding in TymeBank and phosphates miner Kropz.
When TymeBank first established five years ago, ARC paid R317 million for a 10% stake. The Commonwealth Bank of Australia was the largest shareholder at the time, but after the Australian bank opted to exit last in 2018, ARC lifted its equity with the financial upstart to 73%.
ARC stated that the newly formed TymeBank would account for 80% of its medium-term growth.
Rain, another disruptive entrant with former FNB CEO Michael Jordan as a main mover, accounts for R2.3 billion of ARC’s investments. Rain is owned by ARC to the tune of 20%.
In 2019, ARC joint chief executive Johan van Zyl, a former Sanlam CEO, said that Rain, which has 40,000 direct customers, planned to build 5,000 network coverage towers across the country in five years, transforming it into a telecommunications force.
Patrice Motsepe’s investments show that he is banking on future technologies and improvements such as digital banks, telecommunications, and, through African Rainbow Energy and Power (Arep), renewable energy.
Renewable Energy: African Rainbow Energy and Power (Arep)
Arep, which was founded in 2012, made its first foray into renewable energy by acquiring six solar photovoltaic projects from the United States company SunEdison. SunEdison, on the other hand, sold to Old Mutual, which subsequently allowed black economic empowerment (BEE) bidders to buy 30 to 35 percent interests in the projects.
Arep was then chosen as one of three BEE partners to purchase a 15% stake in the SunEdison projects. According to Motsepe, the value of Arep’s arrangement with Old Mutual was around R462-million.
Arep bought a 30% stake in the Ngodwana Biomass Project from Fusion Energy in October 2016, also through a private sector bidding process. Arep’s stake in this project is worth R153.4 million.
It also made a wind power investment through the Irish energy business Mainstream Renewable Power, where Arep obtained a 22.50% equity stake in each of the 140 megawatt Kangnas and 110 MW Perdekraal East wind farms. Arep’s stake in these wind farms is reported to be R188.3 million.
Major Controversies
In July 2018, not long after President Cyril Ramaphosa took office, critics, primarily from the Economic Freedom Fighters (EFF) and Black First Land First (BLF), began chanting that the “Motsepes are to Ramaphosa what the Guptas were to Zuma”.
Patrice Motsepe’s family ties to both the energy minister, Jeff Radebe, and Ramaphosa, as his brother-in-law, became a glaring target for detractors. Motsepe once threatened to sue the Black First Land First (BLF) when its leader, Andile Mngxitama, accused him of inciting a regime change in Botswana.
When Eskom’s restructuring was disclosed on the 7th of February 2019, critics stated Arep was in a position to benefit from Motsepe’s family links. Consequently , many concluded that Brian Dames, former Eskom chief and Arep CEO, could be able to use his Eskom experience to benefit Arep in the upcoming three-way Eskom split.
Although many South Africans see Motsepe as a positive role model who led profitable businesses and supported many of the country’s significant institutions, some disagree. Critics claim that the BEE regulations favored the most well-connected blacks in South Africa, such as Motsepe and his family, while failing to build a black middle class.
Finally, at a World Economic Forum dinner in Davos in January 2020, Patrice Motsepe openly assured US President Donald Trump that “Africa loves him.” In response to the outrage that this speech elicited across the African continent, the billionaire apologized, adding that “I do not have the right to speak on behalf of anybody except myself.”
Motsepe’s Net Worth
Motsepe was named South Africa’s richest man in 2012, topping the Sunday Times’ annual Rich List with a fortune estimated to be R20.07 billion ($1 billion).
According to Forbes’ ‘Rich List 2018,’ he was the 503rd richest person in the world, and as of 2019, he was rated as the 962nd wealthiest person in the world, as well as the third wealthiest South African.
In 2020, Motsepe was ranked as the 1,307th-wealthiest person in the world by Forbes, with a reported fortune of $2.1 billion.
Awards and Recognitions
- South Africa’s Best Entrepreneur Award (2002)
- Voted 39th among the South African Broadcasting Corporation’s Great South Africans (2004)
- Honoured by Forbes as One of the World’s Greatest Living Business Minds (2017) ● Ranked 503 on the Forbes list of The World’s Billionaires. (2019)
- 3rd Wealthiest South African (2019)