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JOHANNESBURG (Capital Markets in Africa) – Stefanutti Stocks Holdings Ltd., a South African construction firm, plans to raise a 1 billion-rand ($74 million) fund to invest in coal mining operators majority-owned by black investors.
The building company is working in partnership with Africa-focused investment group Jaltech Financial Consultants to set up the JSS Empowerment Mining Fund and source the necessary capital from wealthy individuals, according to JSS money manager Gaurav Nair. Participants will receive a tax benefit on their investments, an incentive for helping to boost black participation in the economy.
“Stefanutti Stocks already has eight projects in the pipeline to the value of 700 million rand,” Nair said in an interview on Wednesday. “‘We are looking to fund mining projects owned by junior black-owned mining companies worth between 50 million rand and 300 million rand.”
South Africa’s government is pushing companies to boost black involvement in the economy to make up for discrimination during apartheid, which ended with multi-race elections in 1994. State-owned power utility Eskom Holdings SOC Ltd. requires that coal mines supplying its electricity plants be more than 50 percent owned by black people.
The Stefanutti-led partnership is targeting junior mining companies as they are often considered too small or risky for traditional financiers such as private equity firms, Nair said.
Stefanutti shares rose 0.7 percent to 4.55 rand as of 4:17 p.m. in Johannesburg, valuing the company at 856 million rand.