Anglo American CEO Duncan Wanblad says he remains bullish about SA, and Anglo is still looking to invest. But the country must urgently fix its corruption, energy and logistics “scourges” and the mining industry is keen to partner with the government to do that.
“I really am an SA bull. There is lots to play for here in SA. It deserves to grow,” Wanblad said in an interview on the sidelines of the Investing in African Mining Indaba on Monday.
But Anglo, which has invested R110bn in SA over the past five years, needs new opportunities that meet risk and return hurdle rates wherever it operates. Wanblad said that while Anglo still has some big projects in SA and there may be other opportunities, he would like to see more stability around security and infrastructure issues. And the recipe for success is a partnership between business and the government.
He was forthright in his keynote address to the indaba on Monday that SA is fast squandering its competitive advantages and missing out on the economic miracle it promises, warning that the country is already in crisis.
“I believe that this can be fixed,” he said. “Just as the wheels of government turned at the last moment to liberalise the electricity generation sector, so they need to turn again to address the three scourges that are holding back progress.
“We would all rather that the wheels turned before the crisis point is reached, but we are already at that point.”
When he speaks to senior government leaders they understand this as individuals, but more rapid action is needed. “We struggle to get traction on execution,” Wanblad said.
The mining industry and business more broadly can play a role in unblocking the constraints hindering SA’s economic progress. It is about working to create practical implementable solutions, and failure to do so will fundamentally affect SA’s ability to sustain its economy. The opportunity to capitalise on SA’s rich mineral endowment is there and there is an urgent need to take that opportunity.
Wanblad said he is encouraged by the partnerships that are forming between the mining industry and the government — for example to support security for coal supply chains and power stations and to provide expertise.
A lot of work is also being done in partnership with local government. “The mining industry is ready to help and has been for some time,” he said.
Globally, Anglo is looking to grow by optimising its operating model to get more out of its existing operations and make them safer. It is also looking to organic growth or acquisitions. After slimming down its portfolio several years ago it is looking at expanding into new commodities, especially those that support the green energy transition — as long as the opportunities meet its hurdle rates.
“If I could find lithium and make it work for Anglo I would love that; if I could find cobalt and make it work I would love that; if I could find battery nickel I would love that,” said Wanblad. But Anglo is no longer “commodity agnostic” as it used to be — it got rid of thermal coal two years ago when it unbundled Thungela (the old Anglo Coal) to its shareholders.
Asked if he was sorry the group had shed Thungela, whose profitability and share price went stratospheric last year, Wanblad suggested Business Day ask the group’s shareholders, who had done very well out of Thungela’s “demotion”.
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