Anglo American Group CEO Duncan Wanblad yesterday confirmed that the mining giant's unbundling process will be completed by the end of this year.
Speaking at the 12th Joburg Indaba via video from London, Wanblad emphasised that the initiative was aimed at enhancing value for shareholders rather than being a reaction to recent takeover bids, particularly the unsolicited approach from Australian mining company BHP in April.
Wanblad stated that the strategic review, intended to unlock value, was initiated prior to any bid from BHP, reflecting the under-valuation that investors had placed on various segments of Anglo American.
“We had started the whole strategic review of the portfolio before the bid, but when the offer came in we had to accelerate things and that was less than ideal,” he noted.
Since unveiling the restructuring plan in May, Wanblad detailed that Anglo American will dispose of its 85% stake in the diamond group De Beers, unbundle its 79.2% stake in Anglo American Platinum (Amplats), and offload its metallurgical coal assets in Australia.
The pivot towards copper will see it rise to comprise approximately 60% of Anglo’s portfolio, enhancing focus on this critical metal.
Notably, South Africa remains pivotal to Anglo American’s operations, with its assets constituting around 30% of the company’s portfolio.
Wanblad reaffirmed this commitment, highlighting Anglo’s status as the largest investor in the South African mining sector over the past several years.
In a recent strategic move, Anglo sold about 5% of Amplats, approximately 14 million shares, in a highly successful “bookbuild” that was oversubscribed.
Wanblad explained that this sale aimed to allocate stock to suitable investors in preparation for the impending demerger and to fortify the company’s balance sheet.
Proceeds from the sale will contribute towards funding a copper joint venture with Arc Minerals in Zambia, strategically located near established copper mines.
The positive sentiment surrounding the mining industry was palpable at the Indaba, with Wanblad expressing optimism about the potential changes spurred by the formation of the Government of National Unity.
“I applaud the launch of Phase Two of the co-operation between business and government and we have done some of the lifting of communities by creating better jobs and better education,” he stated.
Discussions echoed this optimism, with Piet Viljoen of RECM and Merchant West Investments stressing the importance of conveying improved environmental and financial indicators to foreign investors.
“In terms of perceptions and investor sentiment, there are many good news stories, but the onus is on us as the industry to share our stories,” Viljoen mentioned.
Despite the upbeat atmosphere, challenges remain in the South African mining industry.
Mzila Mthenjane, CEO of the Minerals Council South Africa, identified persistent infrastructure deficiencies, particularly in electricity supply and logistics, as barriers that have hindered South Africa from capitalising on the commodity price booms of 2020 and 2021.
“We have the capacity to grow. The world needs our minerals and we still have mineral resources,” he remarked. “But we have missed several booms because of a lack of infrastructure. Where will the growth come from?”
Suggestions for improvement, such as the introduction of tax incentives for junior and exploratory mining companies, were brought forth by Heidi Sternberg from the Public Investment Corporation. She argued for a shift in tax legislation to encourage exploration, stating,
“Some kind of tax incentives for junior and exploration mining companies is critical to build a pipeline of new projects to replace the mines that will be closing in the future.”
BUSINESS REPORT