Patrice Motsepe: How he made his billions


Patrice Thlopane Motsepe has entrepreneurship baked in his bones.

It seems the South African born mining magnate has natural instincts for enterprise.

Looking at his accomplishments in the mining industry and business world its not hard to imagine that he possesses the so called “animal spirits” that renowned British economist John Maynard Keynes said drives entrepreneurs and causes them to see opportunities for value where others cannot.

  • Patrice Motsepe is a South African billionaire who has made a fortune estimated by Forbes to be in the region of US$ 2.6 billion.
  • His fortune has come from investments in the mining industry through a company he founded in 1997 called African Rainbow Minerals Limited.
  • African Rainbow Minerals is involved in the mining of gold, platinum, coal, ferrous and base metals.

According to Forbes, Motsepe’s personal fortune is estimated to be in the region of US$ 2.6 billion. Motsepe founded and runs a diversified company called African Rainbow Minerals Limited. Forbes says that Motsepe became a billionaire in 2008 and was the first black African on the Forbes list.

As will be seen later, being first is a recurring and reverberating theme in Motsepe’s life. However, without diminishing, Mr. Motsepe’s business accomplishments which are notable and also without diminishing the credibility of Forbes magazine but the rightful person to claim the accolade of being the first black African billionaire is Nigerian business luminary Aliko Dangote.

Popular business journal African Business ran a report where Aliko Dangote claimed then that his personal fortune was in the region of US$ 17 billion. Forbes may have recognized Motsepe in 2008 as the first black billionaire however, Aliko Dangote was always a billionaire even before Motsepe became one.

Patrice Motsepe has always come first or been the first at almost everything. The accolade by Forbes for the being the first black African to have a personal fortune of at least US$ 1 billion is but one of many. Motsepe, who is a lawyer y training was the first black individual to be promoted to become a partner at the prestigious South African law firm Bowman & Gilfillan shortly after South Africa became a democracy in 1994.

  • African Rainbow Minerals which is listed on the JSE is also referred to as ARM.
  • Motsepe comes from an entrepreneurial family. His father operated general dealers and beer hall in the townships and afforded his family a relatively privileged lifestyle.
  • Patrice Motsepe trained as a lawyer and became the first black partner at a prestigious law firm in South Africa.

Motsepe is one of the foremost beneficiaries of the second wave of black economic empowerment initiatives that took place in South Africa. The first, second, and third waves of black economic empowerment from 1995 to 2010 saw legions of black empowerment outfits that were formed by politically well-connected individuals.

Read: Why South Africa is losing its mining investment appeal

These black economic empowerment upstarts have all but fizzled out. Only a few remain that have stood the test of time and Patrice Motsepe’s African Rainbow Minerals Limited is one of them. ARM as it is affectionately known has transcended the black economic empowerment tag to become a fully-fledged diversified mining company with operations in South Africa, Zambia, and Canada.

Its portfolio is diversified in terms of commodities. ARM has interests in gold through its shareholding in South African gold miner Harmony Gold Limited, it has substantial platinum assets, coal, base metals, and exploration. Patrice Motsepe in 2013 was the first African billionaire to sign the giving pledge where billionaires and other uber wealthy individuals pledge to give at least half of their wealth to worthy causes.

Motsepe comes from a prominent family in Garankuwa which is a rural area near Pretoria in South Africa where people of the Tswana dialect come from which would explain his middle name Thlopane.

His father ABC Motsepe operated general dealer shops in Garankuwa and the young Motsepe cut his teeth working in his father’s shops during school holidays. He is by no means the only person who is successful from his family. His two siblings are highly accomplished individuals in their own right. His sister Bridget Radebe is married to former transport minister in the Jacob Zuma administration.

She runs a successful contract mining outfit called Mmakau Mining. She is overshadowed by her brother who has reached global prominence from the success he has enjoyed in business. His other sister is doctor Tshepo Motsepe is the wife of current president Cyril Ramaphosa. So, as far as family and political connections go, Patrice Motsepe has them all.

Motsepe was born on the 28th of January 1962 and led a relatively privileged childhood and attended Roman Catholic boarding school in the Eastern Cape province. Motsepe obtained his first degree, a Bachelor of Arts from the University of Swaziland and a Bachelor of Laws from the University of the Witwatersrand. He joined the law firm Bowman & Gilfillan in 1993, gradually becoming its first black partner just after 1994. During his time at this law firm, he worked as a visiting attorney at United States law firm McGuire, Woods, Battle, & Booth in 1991 and 1992.

He set up a contract mining services company which he named Future Mining.

After realizing a sure-fire way to turn around loss making mines, Patrice Motsepe set up African Rainbow Minerals in 1997 and approached veteran mining executive Bobby Godsell with his idea to buy Anglo Gold’s loss-making mines believing that he would make them profitable.

Motsepe managed to secure a vendor financing loan from Anglo Gold to operate their loss-making mines in Orkney. Patrice Motsepe’s genius showed itself in the creation of African Rainbow Minerals Gold.

  • In 2003 Patrice Motsepe merged his gold mining company African Rainbow Minerals gold and another prominent gold mining company called Harmony Gold. He went on to purchase Anglovaal Mining in 2004.
  • Patrice Motsepe became a billionaire in 2008. According to Forbes magazine he was the first black African to achieve the accolade.
  • Patrice Motsepe exemplifies the success of black economic empowerment policy of South Africa which began around 1995. African Rainbow Minerals is one of the most successful Black Economic Empowerment outfits that have outgrown the BEE tag.
  • Motsepe has diversified his portfolio from mining to financial services with the purchase of a substantial interest in Sanlam, a South African financial services firm and the creation of a private equity firm ARM Capital which is also listed on the JSE

During his time with the Bowmans, he developed a keen fascination for mining and read all the materials he could on the subject. He left Bowmans to set up his first mining venture which was named Future Mining which was a contract mining services business that operated out of his brief case it is said for eight months. This was in 1994

Motsepe realized from his experience less productive mines could be turned around into lucrative operations with the right kind of strategy. His antidote for older and less productive mines was low base pay for mine workers together with production bonuses.

This reason best explains how and why Motsepe and ARM Limited are the most successful of the black empowerment entities that have stood the test of time. Motsepe has always been an operator and has applied a formula that proved it could turn around struggling and loss-making mines into profitable mines. Other black economic empowerment players were content to just hold passive investments in companies where their influence was minimal whereas Motsepe was right on the coal face of his company’s operations.

Also read: Mike Teke South Africa’s charismatic mining tycoon

Added to this a shrewd and canny ability to read the signs of the times and seek out opportunities to make money from them. It was not until the first wave of black economic empowerment was promulgated into law which required that all companies have at least 26% of their equity owned by black people.

Motsepe then set up in 1997 ARM Gold Limited which then merged with Harmony Gold Limited in 2003. In 2004 ARM also acquired Anglovaal Mining Limited (Avmin).

According to Britannica, “Motsepe was named chairman of the newly reorganized ARM in 2004, and by 2006 the company had expanded beyond gold and other metals into coal mining.

Motsepe’s growing wealth allowed him to purchase a 51 percent interest in the Mamelodi Sundowns association football (soccer) club in 2003, and the next year he gained full control of the club.” Patrice Motsepe has not looked back he has kept growing his business portfolio which includes financial services through his investment in Sanlam, a prominent insurance player in South Africa.

In 2016, Motsepe launched ARM Capital which is a private equity firm that is focused on investing on the African continent. So, what does a man like Motsepe who can afford practically anything do with his time and money? Motsepe was elected the president of CAF which is the governing body of football on the African continent.

His wife Doctor Precious Moloi is a medical doctor by profession but now helps to run the family’s philanthropic efforts.

Now that ladies and gentleman is how to make US$ 2.6 billion courtesy of Mr. Patrice T. Motsepe.

I am a financial services professional with a strong background in diverse areas of banking. My skill set includes among others International Banking, Trade Finance, Commercial Lending, Customer Service, Finance, Banking, Corporate Finance, and Investment Banking. Africa is my home and I am passionate about its development,

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