don't get too carried away, page-17

the ASX listed CCC owns 74% of all of 'coninental coal SA's' assets, with the BEE firm holding the other 26%.

Think of as similiar to the super profits tax, as it essentially works the same. Except its only 26%.

The BEE firm have to fork up their fair share of all fundings etc as per any ownership agreement. Usually, in SA this is achieved by the operational profits of the company 'earned' by the BEE branch being re-invested back into the private arm of the company until whatever costs owed by the BEE firm are payed off.

In CCC's case, this isnt expected for multiple years (I believe the GMP report touches on this issue if I remember correctly)

In summary BEE = a 26% super profits tax- the aussie govt was talking about directly taking a % ownership of ALL mines and taking profits > a certain level, but also forking up its fair share of CAPEX etc. therefore taking owner ship through the good and bad times.
The BEE does the same thing but gives the ownership to the blacks, not the govt.

From my experience investing in SA (CCC and GDO) these lead to some complex contractual agreements and working out who exactly owns what and who owes who what is difficult but not because there is 'shady dealings' simply because the law itself is complex. In terms of getting a basic feel for things, you can still have a good idea of what is going on. Considering I leave myself a margin of over 100% in terms of shares I invest in vs what I think they are worth, I dont care if I get ownership wrong by 1% as if the company was 'only' 99% more valuable than I bought in at, I'm not too fussed.

If this scares you off, good luck to you. With me this is one of the main reasons i like investing in SA, people get scared off one of the worlds top mining countries for stupid reasons, such as the BEE policy and the non-existent risk of nationalisation.

At the end of the day, if the mines are producing 7 MTPA and we only hold 50% of that, presuming prices at 100 USD for export, the 1.5 MT of export quality coal we would be producing, at a 40 USD a tonne profit itself would give us a 60 mill USD profit. That itself would value us at 1 billion dollar plus, using P/E's of similiar companys as a ball park.