The Prince of Mines
Susan Adams 02.28.08, 6:00 PM ET
Forbes Magazine dated March 24, 2008
Patrice Motsepe entered the mining business when South Africa ended apartheid. Today the onetime lawyer and avowed capitalist is the country's first black billionaire.
On a brilliantly sunny Thursday in January, Patrice Motsepe, a vigorous 46-year-old with regal posture, is striding through a gleaming shopping mall on the Cape Town waterfront. Suddenly a crowd forms. A half-dozen employees from the Build-A-Bear Workshop ask for his autograph. Two giggling young women roll up their sleeves as Motsepe signs their arms with a black marker, smiling while admirers snap photos with cell phones. An older woman approaches Motsepe and nearly swoons, grasping his arm and laying her head on his chest as he pats her back and murmurs thank you in Xhosa, one of the six African languages he speaks.
All this is not for a movie star or entertainer but for South Africa's first black billionaire. Over 15 years Motsepe, preaching free market capitalism, turned a low-level mining services business into the country's first black-owned mining company, African Rainbow Minerals, with 2007 revenue of $875 million. Driven by the Asian commodities boom, ARM's share price has rocketed in the past year from $12 to $24, pushing the value of Motsepe's net worth to $2.4 billion. Motsepe, a lawyer by training, serves as ARM's executive chairman, with a 42% stake in the company. He also owns a 5.5% stake worth $295 million in Sanlam, a publicly traded financial services company outside Cape Town.
By billionaire standards Motsepe has a modest lifestyle. His three sons attend prestigious private schools, but he has only one home, in the affluent Johannesburg suburb of Bryanston, and no yacht or plane. His one indulgence is to own the Mamelodi Sundowns, a soccer team. It doesn't tarnish his star quality that he's married to one of South Africa's most glamorous women, a medical doctor turned fashion impresario.
But for all the adulation, in South Africa such success comes with a price: being labeled an oligarch. Even many blacks have complained that the country's 1994 transformation from apartheid to democracy has benefited only the elite few. The criticism stems from laws that require substantial black ownership in certain industries, including mining. A handful of politically connected individuals have grown enormously wealthy as a result. One of Motsepe's sisters, Bridgette Radebe, who's married to transport minister Jeffrey Radebe, heads a mining company and is said to be among the wealthiest black women in the country. "It's called crony capitalism," says Moeletsi Mbeki, 62, brother of South Africa's president and an outspoken critic of the race-preference laws. "It's an anticompetitive system."
Motsepe concedes he benefited from the system yet says that his success was no handout, as he began building his mining business before the laws started taking effect in 2005. He says, "The legislation came way after we did our deals."
Motsepe and his family were in a better position than most to take advantage of the end of apartheid. Born in the sprawling black township of Soweto (next to Johannesburg), where his mother had grown up, Motsepe is a member of a royal clan within the Tswana tribe. He is, in fact, a prince.
Motsepe's father, Augustine Motsepe, was a critic of the apartheid regime. Before his son Patrice was born, Augustine was banished by the government to Hammanskraal, a rural area north of Pretoria where the government thought he could do less damage (he named his son after Patrice Lumumba, head of the Republic of the Congo and one of the first black African postcolonial leaders). There he opened a grocery store and then a beer hall and restaurant. "People don't know that there were very successful black businessmen in the years of apartheid," says Motsepe.
Though one of Patrice's maternal great-grandfathers came from Scotland, the old government classified the Motsepes as African. The family had to pull strings to get their seven children admitted to an Afrikaans-language Catholic boarding school that was officially designated for so-called "coloreds," South Africans of mixed race. From age 6, Motsepe spent school holidays working behind the counter in his father's store, where he says he learned his earliest lessons about business. "Whenever my father made a profit, he always plowed it back into the store," Motsepe recalls.
He graduated from the University of Swaziland and then became one of the few black law graduates of the University of the Witwatersrand in Johannesburg, designated whites-only by the apartheid government (Motsepe had to apply for an exemption to attend). In 1988 he joined Bowman Gilfillan, one of South Africa's largest corporate law firms, and in 1993 he became the firm's first black partner. Energetic and affable, Motsepe never wore his race on his sleeve, says Bowman partner and longtime Motsepe lawyer and confidant Neil Rissik.
Indeed, ask Motsepe about what it was like to grow up as a black man under the violent, racist apartheid regime and he responds with bromides. "The apartheid system was very bad for our people, very bad," he says blandly, switching quickly to the positive. "Only in South Africa could you have a change in government without civil war. If there wasn't the depth of love and caring among our people, this would not have happened."
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