BY AKANYANG MEREMENTSI
One cannot help but suspect that the now recent reports of Anglo Platinum being advised in splitting its South African assets into two has something, if not everything, to do with the country’s ruing party’s (Africa National Congress) youth movement ANC Youth League’s talk of nationalising the Platinum Mines.
Business Day newspaper reported this week of a leading international banking group, Bank of America Merrill Lynch, suggesting that Anglo American “should split into two and separate its South African from its non-South African assets, underlying the poor international perception of the state of the mining industry in SA.”
The split is believed, hopefully in the long run, to ‘boost’ Anglo’s international rating by 17%. “The rerating of the international assets could result in a 17% boost to Anglo American’s total valuation by one calculation, and would result in two London-listed vehicles worth $30bn and $34bn respectively.”
Analysts and investors, according to the report, have suggested that the split would result in “lay[ing] itself open to takeover bids from major competitors if it followed the suggestion” and that government was also likely to “oppose any such split vigorously”.
Since last year, the ANCYL president Julius Malema suggested that the country’s minerals be under the control of the state (read nationalisation) for the benefit of the greater population especially the poor communities. At the time, Malema said: “Our call for nationalisation of mines is in such a manner where the State will own mineral wealth and mines as a custodian of the entire South African population, and not a custodian of few big-businesses. All South Africans should equitably benefit from State owned and controlled mines and we are not mistaken when we make the call for the nationalisation of Mines. We are vividly aware of the Minerals and Petroleum Resources Development Act (MPRDA) which retains State control of all mineral rights, but what we are calling for is State ownership and control of both the mineral wealth beneath the soil, and the extraction and production of these mineral resources in Mines thereof.”
Many observers, including the opposition party Democratic Alliance (DA), criticised the move as it was likely to have a “considerable (negative) effect on investor sentiment”.
Industrial unions, National Unions of Mine Workers South Africa, have also joined calls for nationalisation of some of the companies. Recently, NUMSA reportedly called for ArcelorMittal SA to be nationalised so as to “bring an end to its protracted steel price war with Kumba Iron Ore”. This after the two were involved in trade war (see fresh reports here) for longer than three months, at the time of writing.
Malema has long called for a 50% share of the country’s minerals by government on behalf of the poor despite president Jacob Zuma assuring investors a while back that nationalisation was not a government or even ANC policy, that people needed to engage with Malema instead. Mineral Resources Minister Susan Shabangu, like Zuma, also denied nationalisation of the mines being a government policy as was suggested by Malema.
Therefore, one hopes that Anglo Platinum’s suggested split into two is not a result of a call for nationalisation of the country’s minerals, an industry in which Anglo trades. This is because if this to be the case or the reasons, the move will then continue to perpetuate and reinforce Malema’s call for nationalisation or 50% ownership of Anglo, Impala and other platinum and minerals companies as to date they are only interested making profits for themselves and leave the hard-working lower-class workers drowning in the high level of poverty we continue to witness on a daily basis. This is despite the millions and billions of profit they help bring in for these companies such as Anglo et al.
With recent Sunday Times newspaper report suggesting that nationalisation is back on the agenda and is to be tabled at the ANC National General Council this year, one waits with bated breath.
But I hope that I am wrong about the reasons behind Anglo’s split and that that is not to be the case nor should it ever be the case in future.
Akanyang Merementsi blogs at Akanyang Africa.
Tags: ancyl, anglo platinum, nationalisation