How The Son Of A Former African School Teacher Made Over $1 Billion Dollars
From different ends of the African continent, stories of triumph, highlights of unrelenting entrepreneurs, and remarkable achievements born out of a sheer tenacity of purpose has continued to light a fire in the hearts of people who look up to these figures; causing them to relentlessly forge ahead, even in the face of uncertainty, with the hopes of someday achieving their dreams.
This is the success story of Patrice Motsepe, a South African mining magnate, who was born to a school teacher, rose to high ranks in a private organization, and eventually set out to exploit a golden opportunity erupting in the South African mining industry that only few could see at the time.
Here’s how he did it:
The Early Life And Education Of Patrice Motsepe
Patrice Tlhopane Motsepe was born on the 28th of January 1962 in South Africa to Augustine Motsepe. His father, Augustine, was first a school teacher, before going on to start a business of his own in the form of a Spaza shop (a mini store that can be home-run).
From his dad’s small foray into entrepreneurship, Patrice Motsepe got his first exposure to the business world and got his first understanding of the mining business.
He acquired this knowledge when helping his father sell liquor to mine workers always coming to their Spaza shop. These group of men usually stormed his father’s shop every day to first buy and drink liquor before heading to the mines to work.
Patrice Tlhopane Motsepe went on to study and earn a Bachelor of Arts degree at the University of Swaziland, then subsequently earned a law degree from the University of the Witwatersrand.
Life As A Lawyer
After getting his LLB, in 1988, Patrice Motsepe got a great job offer from the Bowman Gilfillan law firm, which was one of South Africa’s most reputable law firms.
Despite being a firm predominantly run by white South Africans, Patrice Tlhopane Motsepe’s drive, commitment to growth, and high success rates in his job activities got his bosses to take a unique interest in him.
In 1991, Patrice Motsepe, under the American Bar Association program, was a visiting attorney to McGuire Woods law firm located in the heart of Richmond, Virginia, USA. During his visit, he met several mining organizations, and studying their operations sprouted a zeal and attraction in him for the business.
This exposure caused Patrice Motsepe to start studying the mining business in every way that he could. He would read all kinds of books & articles and study anything he could on mining, just so he could have a complete understanding and technical know-how on how the business operates.
In the year 1994, Patrice Tlhopane Motsepe’s hard work at the Bowman Gilfillan law firm paid off, as he was appointed the first black partner of the organization, in exactly the same year that Nelson Mandela became the president of South Africa.
The Start Of His Business Journey
Now in the law firm, Patrice Motsepe specialized in mining and business law. His exposure to the sector caused him to start up a mining firm called Future Mining; a company which was into contract mining services that involved creating a system of worker remuneration that integrated a low base salary with a profit-sharing bonus, and also the cleaning of gold dust from inside mine shafts for the Vaal Reefs Gold mine, currently a subsidiary of AngloGold.
While his company handled very miniature mining contract services, Patrice Tlhopane Motsepe continued to strive until he realized that the successful mines didn’t have to be the large ones, but rather any one, especially small ones that better managed their finances and operations.
The Establishment of The African Rainbow Minerals (ARM)
After saving up for many years, in 1997 when the price of Gold was falling, one of the largest mining companies in South Africa, AngloGold, was looking to sell some of their smaller, older, low-performing mine shafts, so they could focus on their larger and higher performing mines.
With this golden opportunity staring him in the face, Patrice Motsepe promptly founded the African Rainbow Minerals (ARM) and proceeded to acquire one of the mine shafts that were up for sale by AngloGold.
With a price tag set at $8.2 million, Patrice Motsepe had to run around in a bid to source the money before the opportunity was gone. He ran to the banks, but they refused him a loan because the mine was up for sale for being unprofitable, and besides, no black South African had ever owned a mining operation before.
Now, the Chief Executive Officer of Anglo’s gold and uranium division at the time, Bobby Godsell, decided to help Patrice Motsepe out, since he knew about his previous mining contract services and had also observed his zeal to want to venture into the mining business.
They struck a good deal, and Bobby Godsell handed over the mining shafts to Patrice Motsepe, who would pay the $8.2 million cost over a period of years.
With the price of Gold still falling, Patrice Motsepe had to take drastic steps to ensure the mine had a full turnaround. To do this, he implemented a lot of lean operations, downsized the staffs at the Orkney mine to 5,000 from 7,500, cut the management staffs in half, and worked from a building located in Orkney, so he could supervise its operations directly, since it was the most profitable of all the mine shafts handed over to him.
In just three years after taking over the mines, Patrice Motsepe was able to fully repay the debt, which came as a complete shocker to almost every observer, as he had turned the mines’ operations around and made them profitable in just about 12 months after the takeover.
After this success, in the year 2000, Patrice Tlhopane Motsepe partnered with Anglo Platinum, the world’s largest platinum producer. This partnership was a 50 – 50 ratio, and together, they created the largest platinum-producing mines in South Africa called Modikwa.
He further went on to partner with a South African gold producer called Harmony, in 2002, to acquire a certain number of shafts from Anglo. After the acquisition and commencement of operations on the shafts, they collectively went on to produce a total of 1 million troy ounces of platinum a year.
His Business Today
Since his business mergers and explosive growth, Patrice Tlhopane Motsepe’s African Rainbow Minerals (ARM) has been listed on the Johannesburg Stock Exchange, making him one of the first black entrepreneurs in South Africa to own a major controlling stake in a publicly listed company.
Today, his company has strategic partnerships and mergers with other mining organizations, and have added a wide list of minerals to their coffers like nickel, chrome, coal, iron, manganese and precious metals (platinum and its related products).
In the process, Patrice Motsepe has built one of the largest mining companies in not just Africa, but the world, with revenues totaling over $2 billion, and employing over 10,000 people.
With currently about a 40% stake in African Rainbow Minerals (ARM), Forbes Magazine, in the year 2017, released reports that Patrice Motsepe had amassed a net worth of up to $1.6 billion. Making him the 14th richest African.
He also owns stakes in several other companies, including about a 5.5% stake in Sanlam, a publicly traded financial services company located outside of Cape Town, South Africa.
Patrice Motsepe won the South Africa’s Best Entrepreneur Award in the year 2002. In the year 2004, he was voted the 39th in the SABC3’s Great South Africans (SABC), which is South African Broadcasting Corporation, the state funded state broadcaster.
As at 2017, Patrice Motsepe holds the position of the interim chairman of the Black Business Council and is one of the founding members and former president of one of South Africa’s most influential business advocacy and lobby group called Business Unity SA (BUSA).
To Sum It Up
Patrice Tlhopane Motsepe’s success story is a remarkable one showing how curiosity, doggedness, perseverance, and the knack to exploit great opportunities as they come, can determine how successful or not, any individual could become.
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