South African coal tycoon Sipho Nkosi left Exxaro and now funds films and video games

Sipho Nkosi spent a decade running one of Africa's largest coal producers. He now chairs a company that makes fighting video games.

Six months after leaving Exxaro Resources in March 2016, Nkosi stood up at the Joburg Indaba mining conference and asked whether the South African industry had acted honestly in implementing black economic empowerment. The big deals had been done, he said, but the only people making money from them were the lawyers and the finance houses.

He was in an unusual position to say it. Nkosi had built one of the few empowerment vehicles that turned into an operating company rather than a fee, and everything he has funded since has been a business that makes something.

Eyesizwe

Nkosi founded Eyesizwe Holdings and ran it as chief executive, assembling coal assets when South African mining was under pressure to bring black ownership into an industry that had excluded it entirely.

Most empowerment transactions of that period were financing structures. Eyesizwe mined coal.

It merged with Kumba Resources' non-iron-ore assets in 2006, and the combined business was renamed Exxaro Resources with Nkosi as chief executive. Exxaro became one of the largest coal producers on the continent and held 19.99% of Kumba Iron Ore, which supplied empowerment credentials to the Anglo American-controlled producer.

He ran it for a decade and handed over to Mxolisi Mgojo, who had also come from Eyesizwe.

Before the coal

Nkosi did not start in mining.

He took a bachelor of commerce degree at the University of Zululand, an honours degree in economics through the University of South Africa, and a master of business administration at the University of Massachusetts. He later completed an advanced management diploma at Oxford.

His first job, in 1980, was as a market analyst at Ford Motor Company South Africa. He moved to Anglo American Coal as a marketing coordinator in 1986, then into financial services as head of strategy at Southern Life Association and later as non-executive chairman of African Life Assurance.

Talent10

He started the next thing before he had finished the last one.

Talent10 Holdings was founded in October 2012, four years before Nkosi left Exxaro, by him, Wayne Fitzjohn and a small group of investors. Nkosi chairs it, Fitzjohn is chief executive and Micky Wostenholm is the third partner. Some records date the founding to 2011.

The stated aim was backing disruptive businesses in South Africa, and the firm describes its method as active management rather than passive investment, taking positions in strategy and financial management at the companies it funds.

Fitzjohn came from the wealth manager Citadel, where he had co-founded a private equity and advisory operation. That is where he first approached Nkosi and his fellow Eyesizwe founders.

The one that worked

Talent10 funded the establishment of IoT.nxt in late 2015 and put more than 100 million rand into it, including a further 100 million in 2017 to open a European office in The Hague.

The company built the Raptor gateway, a device that connects industrial equipment to networks regardless of what communication protocol the equipment uses. It opened an American operation in Dallas in September 2018 after winning contracts to optimise energy use at schools in Florida and Texas.

Vodacom Group bought a majority stake in 2019.

Fitzjohn called co-founding IoT.nxt one of the most significant decisions Talent10 had made. The exit funded everything that came after it.

Coal to cinema

Talent10 formed Nthibah Pictures in 2018.

Its first feature was a crime thriller directed by Donovan Marsh, whose previous film Hunter Killer starred Gerard Butler and Gary Oldman. The studio's biggest project since has been Boy Kills World, funded, filmed and produced entirely in South Africa, which premiered at the Toronto International Film Festival and secured American distribution through Lionsgate Films and Roadside Attractions.

Nthibah has received $50 million from its parent. Simon Swart runs it as chief executive with Fitzjohn as chairman.

The gaming arm is Talent Digital Art, which built Super Dragon Punch Force 3, a fighting game launched at Cape Town Comicon in April 2024. The plan is to connect the game to the film and build what Fitzjohn has described as an expanded universe around Boy Kills World.

Talent10 and the Industrial Development Corporation, the South African state development finance institution, have committed 1.9 billion rand, about $100 million, to developing entertainment and gaming franchises in the country.

The argument Fitzjohn makes for it is about ownership rather than production. South Africa already attracts international film work, he has said, but almost none of the intellectual property originates or stays there.

That is the same complaint Nkosi made about mining empowerment, applied to a different industry.

The rest of the portfolio

Talent10 invested in the entertainment software company Deutonium in 2020 and exited in 2022.

It holds Two Oceans Air Conditioning, an industrial air conditioning business, and made its most recent disclosed investment in November 2023 in Pineapple, a South African digital car insurer. Talent10 has also been described as a significant shareholder in Exxaro.

The boards

Nkosi has held an unusual number of senior positions since leaving the mining industry.

He was independent non-executive chairman of Sasol, the integrated energy and chemicals group, and chaired its corporate governance and nominating committee. He has been a director of Sanlam, the financial services group, since 2005, and of Tronox, the American titanium dioxide producer, since June 2012. He sits on the board of Tranter Holdings, an investment company with gold mining interests, and of PCM Resources Consolidated alongside two other former Exxaro executives.

He has chaired the Small Business Institute since January 2019 and is a past president of the Chamber of Mines of South Africa. He also sits on the boards of the KwaZulu-Natal Philharmonic Orchestra and Partners for Possibility, and is a trustee of the Luphondo Trust.

President Cyril Ramaphosa appointed him in February 2022 to lead a team identifying and removing the government red tape holding back business growth. That role fits the pattern too. A man who spent a decade complaining that the system rewarded intermediaries was asked to remove some of them.