Anglo American has no intention of selling South African assets and, while welcoming the improved Mining Charter, CEO Mark Cutifani said the industry would come up with innovative suggestions to make it more palatable to investors, communities and labour.
Anglo’s South African assets, ranging from the most profitable platinum mine in the world, a large new diamond mine and an iron ore cash machine to coal and manganese operations, have long been the source of speculation about whether they should remain in the company.
Some analysts have suggested that they weigh on the London-listed company’s share price because of the regulatory uncertainty bedevilling SA’s mining sector, and that a lot of value could be unlocked by selling them.
There have been reports that Anil Agarwal, the Indian billionaire who has taken a 20% stake in Anglo through Volcan, a family company, wanted to do a deal with Anglo on its South African assets and the diversified Indian resources company Vedanta Resources, in which the Agarwal family holds a majority stake.
Cutifani dismissed any thoughts of Anglo leaving SA or being approached by Agarwal to cut a deal on the local mines.
"We believe SA is one of the best mining jurisdictions in the world. Period. We believe the policy framework needs to reflect that potential. It’s starting to move in the right direction," Cutifani told Business Day.
Turning to Agarwal, Cutifani said: "He’s not raised anything like that with us. I’m not aware of any such proposition. There’s no such scenario on the table. Our business works as a whole and SA is making its contribution, and so we like all the moving parts we have."
The latest iteration of the draft Mining Charter acknowledged deals done in the past for empowerment credits, one of the key uncertainties dogging SA’s mining companies, but there were still concerns around a 10% free carry in a 30% empowerment structure for new mining rights, as well as a 1% trickle dividend to be paid from operating profit to communities and employees.
"We’ll put some thoughts forward … that we hope provide new ideas on how we can deli-ver on the transformational requirements but at the same time make the country investable," Cutifani said.
"We are here for the long term. Even in the worst of things, we said we’re not leaving. Our commitment to precious metals and the business never faltered. We are not looking to go anywhere else."
However, until there is clarity around the charter and the aspects flagged by the Minerals Council SA as being negative for investors had been addressed, companies like De Beers were adopting a spending freeze on exploration, unwilling to invest in a high-risk aspect of the business that could deliver new mines that would fall under the requirements of the charter.
De Beers, which is 85% owned by Anglo, has 16 new exploration permits, but CEO Bruce Cleaver said work on these licences was being stalled until the charter was finalised.
The public comment period on the charter was recently extended to end-August.
"To be fair to Gwede [Mantashe, the minister of mineral resources], he’s trying. We need to help by putting forward some alternate options in delivering value to all stakeholders.
"We have to do this together," Cutifani said.
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