This regionally optimised mega mine will lead to the creation of an operation of significant size, allowing for mining of the ore body in a continuous and sustainable manner.

Investing in communities

Rural development

During 2012, IDC adopted a framework to guide the development of rural areas. An important part of IDC’s Leadership in Industrial Development strategy is increased industrial development, focusing on support for priority sectors identified in the New Growth Path and Industrial Policy Action Plan, early stage project identification and development, increasing industrial finance, and crafting and implementing sector development strategies.

Although this focus has led to significant investment in rural areas in the past, there is a danger that meaningful opportunities in specific areas can be overlooked if they do not form part of existing sector development strategies. The IDC realises that there is a need to integrate rural areas into the economy and integrate rural development perspectives into industrial development and that it has a broader role to play in proactively identifying opportunities that can have a significant impact on rural communities while not duplicating activities and mandates of other role-players. The IDC’s interventions are aimed at developing specific industries based on the needs or strengths of a specific area.



Workers and community trusts allow broad-based groupings from historically disadvantaged communities to own shares in some of the companies that receive IDC funding. This year, nine transactions with trust participation were approved, of which four were Community Trusts and the rest Workers Trusts. Our policy is to ensure that the vast majority of workers trust beneficiaries are Black low level workers and that historically disadvantaged communities from around the geographic area where the IDC investment locates participate in community trusts.

In 2008 IDC incorporated the socio-economic development (SED) function mainly to facilitate socio-economic transformation and broad-based black economic empowerment (B-BBEE) through workers trusts, community trusts, and co-operatives. Expert advice ensures that proper and lawful processes are followed to access portions of land for development; Trust deeds reflect the true and real needs and aspirations of beneficiaries; and appropriate service providers are engaged to assist them to establish the trusts. Capacity building provided by SED includes the provision of training courses to beneficiaries and their trustees; and ongoing support and monitoring to ensure proper governance and management of the trusts.


In FY 2011, nine workers trusts and two community trusts were registered; 9 workers trusts and 17 community trusts were registered in FY 2012; and 5 community and 8 workers trusts were registered in FY 2013. The increase in the number of community trusts registered was as a result of DoE’s renewable energy RFP, which stipulates that only bids with local community participation as shareholders would be considered. SED assisted bidders include local community participation in their business plans.

Of the R152 332 spent on trust registration, IDC made grants of 50%. An additional R185 755 was spent on training trustees and beneficiaries. The training is designed to make both trustees and beneficiaries understand how trusts operate, their respective roles and responsibilities and how trustees should manage successful trusts.


The major challenge with these trusts is that none has received material economic benefits from their equity stakes because their companies have not yet declared dividends. The lack of material benefit flow to the trusts makes it difficult to sustain beneficiary motivation and commitment to projects. As a result the companies in which they have invested fail to realise expected benefits of lower absenteeism, significant increase in productivity and revenue.

The general low levels of education/literacy of trust beneficiaries coupled with lack of business acumen, business management, experience and corporate governance are impediments to effective and efficient trust management. Therefore, extensive and basic education training is required to bring most of the beneficiaries to a level adequate to manage effective trusts.

The lack of genuine long-term commitment to the sustainability of trusts by company management does not help the situation. Many of them regard B-BBEE as a compliance matter rather than national investment. Some of them also use trusts as a means to access cheap funding from DFIs.

Finally, outside the corporate sector in South Africa the concept of employee and community ownership of equity in private companies is still relatively new. There are no existing documented best practices for successful workers and community trusts. To address this challenge SED organised an Employee Ownership Conference in July 2012. International and local experts in Employee Ownership models presented various papers to share their experiences. Later in the year a team of IDC staff attended an international Employee Ownership conference to further learn on what works in other parts of the world.

Future plans

Going forward we aim to:

  • Link the B-BBEE’s enterprise development scores and funding to supporting Trusts;
  • Conduct socio-economic impact assessment on IDC funded trusts; and
  • Disseminate lessons learned and best practices on community and employee ownership by conducting workshops, seminars and conferences.

Performance measurement

Currently the SED intervention impact is measured by means of an annual survey that is conducted among the companies that have registered trusts with IDC investments. The previous year’s score was 4.25. The survey for the current year was to be concluded by the end of April 2013.

Workers trusts funded

2011   2012   2013  
Badirammogo Apparel Workers Trust  
Tranter Rock Drills Workers Trust  
JE Royal Pack Workers Trust  
Tshifhire Timbers Workers Trust  
Cleardata Workers Trust  
Crossley Workers Trust  
Liberty Lane  
Stateway Switchboard  
Amathole Berries  
WG Wearne Workers Trust  
Tissue Masters Workers Trust  
VKB Workers Trust  
Grain Field Chicken Workers Trust (GFC) 
Berekesanang Workers Trust  
Agni Steel  
Amber Bay  
Coega Dairy  
Isondo Guest Comfort Workers Trust  
Windtown Workers Trust  
Tricom Workers Trust  
Vaalharts Citrus Workers Trust  
Clidett 688  
Mammoth Technologies  

Community trusts funded

2011   2012   2013  
Amajuba Berries  
Khi Solar Community Trust  
Mulilo Renewable Energy (De Aar) 
Sevenstones 159  
Rustmo 1  
Divine Inspiration  
Aveng – Gouda  
Aveng – Sishen  
Mulilo Renewable Energy (Prieska) 
Chaba 21 MW Wind Project  
Waainek 24 MW Wind Project  
Grass Ridge 60 MW Project  
Kakamas Hydro Electric  
Kha Solar Community Trust  
Slimsun (Swartland) 
Klipheuwel Wind Energy  
Red/Dorper Wind Farm  
Arisa Community Trust  
Warrenton Citrus Community Trust  
KK Wajima  
InnoWind Chaba  
Jan Kempdorp Citrus Community Trust  

All Community Trusts registered in 2013 are under Green Industry in the renewable energy space. The number of trusts decreased in 2013 due to the postponement of round three of the DoE REPP process.

Coega Dairy Holdings

The IDC has identified increased competition in the dairy value chain and import substitution in the cheese industry as key sector development goals. We also singled out the need for increased farmer (and specifically B-BBEE) participation in dairy value-adding initiatives.

Windtown Lagoon Resort 

The newly built Windtown Lagoon Resort and Spa reflects the IDC’s focus to funding community-based projects that have potential to create employment opportunities in far-flung regions.

R13.1 billion
R16.0 billion
18 922
3 950
© The IDC 2013. All rights not expressly allowed are reserved. P.O. Box 784055, Sandton, 2146, South Africa