Anglo American has started the deep-tissue restructuring of its South African asset portfolio, agreeing to a R2.3bn sale of its Eskom-linked collieries to newly formed Seriti Resources.
Anglo has overseen the sale of the large Rustenburg platinum mining complex to Sibanye Gold and the smaller Union platinum mine and the closure of the Thabazimbi iron-ore mine and sale to ArcelorMittal SA.
But the thermal-coal sale, which could mark the complete exit of Anglo American from South African coal-production, is a hefty move, triggered in part by the impasse between Anglo and Eskom over the ownership structure of the New Largo project, with the parastatal demanding 51% black ownership. Anglo does not favour minority stakes and the disagreement set it on a path to dispose of the low-margin collieries supplying Eskom.
Anglo still has its export-focused thermal collieries in SA. At one point — when commodity prices were low in 2015 — Anglo was keen to sell, but as coal prices recovered, it has indicated it could hold on to them for their cash-generative nature.
Seriti is 79% black-owned and on paper ticks that particular Eskom demand. With Mike Teke as CEO and counting Sandile Zungu’s Zico as a shareholder, Seriti is poised for growth. Zungu is reportedly close to President Jacob Zuma, so it has the political connections that are apparently necessary in the country to advance business interests.
anFor much of the past 10 years, the UK banking fraternity has argued that its image as respectable financiers was unfairly destroyed by just a handful of maverick wide-boys and that disparagingly referring to them as banksters was inappropriate and unfair.
The Conservative Party under David Cameron seemed keen to encourage the view that the good guys outnumbered the bad. But the behaviour of Jes Staley, CEO of Barclays, may change that perception. If the baddies are outnumbered by the good guys, then Staley has just made it look as though most of the baddies are at the top of the executive pile.
On Monday, Barclays said its CEO was being investigated by the Financial Conduct Authority and the Prudential Regulation Authority. It seems New York’s department of financial services is also investigating.
It appears Staley, a former JP Morgan investment banker who was appointed to the Barclays top job in 2015, went on something of a witch hunt to uncover the identity of a whistle-blower. The whistle-blower had raised concerns about the appointment of one Tim Main, who had been appointed, with Staley’s backing, chairman of Barclays’ financial institutions group. Staley worked with Main for several years at JP Morgan.
Staley told the Barclays board that he had merely been trying to protect a colleague from what he believed to be an unfair attack. The board, led by John McFarlane, a long-time Staley supporter, accepted his apology and undertook to dock a few bob from his next multimillion-pound pay package.
Given the importance of whistle-blowing, it’s easy to see why few have been as forgiving as the Barclays board members. With every passing hour, pressure mounts for Barclays to get rid of Staley. Absa must be heaving a sigh of relief.
• Nick Wilson edits Company Comment (wilsonn@bdlive.co.za)
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