Portrait | Big money, greener mining, and the future of...


Portrait | Big money, greener mining, and the future of millions of people

There may not be bombs exploding or blood flowing, but a corporate battle like the one going on between Anglo American and BHP is still nothing short of dramatic, says WILLEM KEMPEN.

SOMETIMES it takes a few years and a movie like Too Big to Fail for the rest of us to understand those big moments when the world's corporate generals make critical decisions that change the course of history.

We may not have been on the verge of an international or even a local financial crisis by Wednesday night — when the hourglass ran out for BHP to present a fresh takeover bid to the Anglo American board —  but a whole host of people nevertheless breathed a sigh of relief when the Australian group said it was abandoning its effort for now.

Anglo American has long ceased to be the omnipotent giant that grew out of the company Ernest Oppenheimer founded in Johannesburg in 1917. It is not even entirely a South African business any more, although it still has a secondary listing on the JSE. Yet it remains an influential conglomerate with valuable mining assets in South Africa and elsewhere. At least half and as much as three-quarters of Anglo's total workforce of just under 60,000 people are South Africans, not to mention everyone in neighbouring countries that somehow benefit from the group's activities.

But in the competitive international commodities markets, there are always people looking for ways to save costs and find synergies. And while no one can deny Anglo American's historic role in exploitative and destructive practices such as race-based job reservation and the migrant labour system in Southern Africa, the ironic truth is that the group in other hands will be under even greater pressure to do more with less, such as by firing workers.

Lees hierdie artikel in Afrikaans:

When discussions with BHP were still alive, one of the conditions was that cuts should not be made to Anglo's social projects in South Africa.

Then there are the shareholders. None other than the Church of England's Pensions Board thanked Anglo's board this week for turning down BHP's request for an extension of the deadline. The CofE Pensions Board regularly takes the lead when it comes to investments in sustainable mining that is sensitive to the environment.

Adam Matthews, head of investments for the board, said on Tuesday that a strong and independent Anglo would be able to play a bigger role in efforts to transform international mining into a sustainable industry that is sensitive to the damage that can be done to people and planet. The mining sector as a whole also deserves considerably more recognition for the role it is playing in the transition to a more sustainable global economy, he said.

Even Gwede Mantashe, the mining minister who sometimes gives the impression that his motives are pure and that he understands the industry, told the Financial Times on Wednesday that he welcomed Anglo's decision not to extend the deadline but “they must now restructure and respond to the demands of the times".

Anglo's directors may start to giggle hysterically when they hear that King Coal Mantashe, of all people, wants to preach to them about “adapting to the times", but it is also true that BHP's unsolicited offer is a wake-up call that a lot of things will have to be done differently. The board already has a plan to do exactly that and the topic will be heatedly discussed in London on Tuesday at Anglo's annual meeting of shareholders.

Although BHP failed this time in its bid to take over Anglo, it might well try again in six months. It's not the only interested party either, because Anglo's assets are diverse and geographically spread, making it harder to effectively manage everything under one umbrella. There are the diamond mines under the De Beers banner, the highly profitable copper mines in Peru and Chile, and of course the iron ore, platinum and other operations in South Africa.

Without a doubt, the CEOs of all the major international players in the mining industry are following every moment of the Anglo-BHP saga. They include Jakob Stausholm of the Anglo-Australian Rio Tinto, Gary Nagle of Glencore (in which South African-born Ivan Glasenberg still has a share of about 10%), and Mark Bristow (also a South African by birth) of Canada's Barrick Gold. Among the smaller players who might only be interested in parts of a restructured Anglo are Brazil's Vale, India's Vedanta Resources and China's Zijin Mining.

Vale also has a South African connection: Australian Mark Cutifani, who was Anglo's chief operating officer from 2013 to 2023, is the chairman of Vale Base Metals.

Abobe: Mike Henry (BHP), Ivan Glasenberg and Gary Nagle. Below: Anil Agarwal (Vedanta Resources), Mark Cutifani and Mark Bristow.
Abobe: Mike Henry (BHP), Ivan Glasenberg and Gary Nagle. Below: Anil Agarwal (Vedanta Resources), Mark Cutifani and Mark Bristow.

Several analysts believe Glencore stands out among these suitors for Anglo. The two groups' respective assets are a good fit for each other and Glencore has a history of growing by taking over other businesses rather than starting new ones.

And although Glasenberg lives in Switzerland and no longer has much to do with running Glencore's everyday business, he apparently hasn't forgotten about South Africa. He was a South African speed-walking champion in his youth and word is that he has been donating good money to promote local athletics.

With a personal fortune estimated at around $12 billion, Glasenberg can make quite a difference to South African athletics if he wants to, and maybe even keep an eye on Anglo's local affairs while doing so. Who knows?

♦ VWB ♦

BE PART OF THE CONVERSATION: Go to the bottom of this page to share your opinion. We look forward to hearing from you.

Speech Bubbles

To comment on this article, register (it's fast and free) or log in.

First read Vrye Weekblad's Comment Policy before commenting.