The Martu people are Australian Indigenour people living in the western desert. The Age reports that they have formed a deal with Reward Minerals, which will reward them with 7 million options at a strike price of 50c, valid for 4 years, amounting to 10% of the shareholding of the company.
This deal is being suggested a landmark deal in terms of securing appropriate compensation and ownership to the traditional owners of the land, the Martu people. The share price traded up to tis highest ever and at the current share price, the deal is is worth a little above $ 5 million.
The indigenous community believes that “the presence of a generous indigenous equity component as part of the transaction is the way of the future in mining negotiations,”.
This could well work out in a positive way, depending on the development of the mine. It may also act as a blueprint for deals in India where tribal people are being evacuated for industrial and mining projects with payments in cash now. With many issues around compensation arrangement including the sensible use of cash for the financial inexperienced tribals, a cash+stock compensation option may be a good deal.