The offer by the giant Australian mining company BHP to buy Anglo American shows how ANC governance has diminished South African mining. Anglo was once the jewel in South Africa’s mining crown. Now a condition of the BHP offer is that Anglo first get rid of two of its three major South African subsidiaries.
BHP’s attitude reflects how mining companies and mining investors worldwide view the way the ANC has made doing business in South Africa extremely difficult. The ANC’s greed, incompetence and obstructionism has corroded an industry which should be a world leader and a South African champion. South African mining assets are now seen as toxic. That is why investment is so low in what should be one of the world’s mineral resource treasure houses.
BHP’s offer WAS conditional on Anglo first divesting itself of Amplats and Kumba. De Beers is Anglo’s third major asset, but its future was already in doubt after it was hit hard by declining diamond prices. Amplats and Kumba are both impressive companies, but have been weakened, Amplats by low metal prices and Kumba because the collapse of Transnet means it can’t properly export its product.
Analysts say the recent poor performance of Anglo is partly because of the drag caused by its South African operations. That poor performance stems from ANC mining policy which has made it difficult to operate here. Poor mining policy that is poorly implemented has been made worse by violent mining mafias, discontented mining communities, corruption, rail collapse and the loss of electricity. If Anglo had been stronger, it would not have been vulnerable to takeover.
London Times corporate writer Oliver Shah says this morning that despite the rejection of the offer by Anglo’s board, other offers will follow. He says, “whatever happens with BHP, Anglo is over in its current form”. If he is correct that other offers will follow, we may lose a company that has been an exemplary corporate citizen for the past 30 years.
South Africans can only hope that whoever ends up owning Anglo or its assets, are as committed as Anglo to South Africa and South African mining.
South African mining will not deliver on its potential to lift South Africans out of poverty while the ANC remains in government.