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Anglo American disposes of its entire interest in Avmin
Anglo American Plc
JSE Code: AGL
ISIN Code: GB0004901517
(The "Company")
News release: Anglo American disposes of its entire interest in Avmin
Anglo American plc ("Anglo American") announces the disposal of its entire
interest in Anglovaal Mining Limited ("Avmin") to a consortium comprising
African Rainbow Minerals Gold Limited ("ARMgold") and Harmony Gold Mining
Company Limited ("Harmony"). Anglo American has sold its interests for an
aggregate cash consideration of R1.7 billion (US$231 million), equivalent to
R43.50 per Avmin share.
Anglo American acquired its strategic shareholdings in Avmin and Kumba Resources
Limited ("Kumba") in March 2002 with a view to: -
- realising the full growth potential of the Northern Cape iron ore assets owned
by Avmin, through Assmang Limited ("Assmang") and Kumba;
- help unlock the significant synergies between the Northern Cape iron ore
assets, together with Orex (owner of the Sishen Saldanha railway line) and the
Saldanha Iron Ore Port. Anglo American firmly believed that as anchor
shareholder in both Avmin and Kumba, it could facilitate an appropriate
combination of the underlying iron ore assets of Assmang (held by Avmin) and
Kumba;
- facilitate meaningful and sustainable empowerment in the Northern Cape iron
ore assets. Anglo American re-emphasised its commitment to a substantial BEE
initiative around these assets on 17 December 2002 at the time of signing the
Memorandum of Understanding with the SA Government ("the MOU").
Anglo American notified the acquisitions of Avmin and Kumba to the Competition
Commission on 20 June 2002. On 6 September 2002, the Competition Commission
recommended that the notifications be approved unconditionally. Subsequently it
became apparent to Anglo American that there were concerns about it owning an
effective interest in both the Assmang and Kumba iron ore assets and combining
the iron ore assets in the Northern Cape. Under these circumstances it became
clear that it would be more acceptable if Anglo American was invested only in
Kumba. Kumba as the largest iron ore producer in South Africa (and the fifth
largest in the world) is the most important component of the South African iron
ore assets and is the primary focus for Anglo American to achieve its iron ore
objectives as set out above.
Harmony and ARMgold"s recent unsolicited approach to Anglo American for its
entire interest in Avmin allows Anglo American to exit Avmin for value, whilst
simultaneously introducing meaningful empowerment in both Avmin and the Northern
Cape iron ore assets in a manner consistent with Anglo American"s black economic
empowerment objectives for the assets.
In view of the sale of its entire interest in Avmin, Anglo American will
withdraw its notification currently before the Competition Tribunal in respect
of Avmin. Anglo American will continue to seek approval from the Competition
Tribunal in respect of Kumba. The Competition Tribunal is scheduled to consider
the Kumba notification in late May 2003.
Regardless of the current ownership of Avmin, Assmang and Kumba, Anglo American
believes there is still opportunity for meaningful operational synergies to be
unlocked over time between the Northern Cape iron ore assets. Anglo American
will continue working with all parties to determine how best to unlock the
synergies for the benefit of all stakeholders.
Tony Trahar, Chief Executive of Anglo American said, "Should Anglo receive
Competition Tribunal approval in respect of Kumba, Anglo American will have
secured a significant shareholding in Kumba whose major business is in the iron
ore sector. Anglo American will continue to discuss with the SA Government and
other interested parties the opportunities to further develop South Africa"s
iron ore potential so as to create a globally competitive iron ore mining
industry in the Northern Cape. Anglo American remains fully committed to the
principles agreed with the SA Government in the MOU and will continue to support
Kumba in the implementation of its empowerment strategies as envisaged by the
Mining Charter".
2 May 2003
For further information:
London:
Investor Relations
Nick von Schirnding +27 11 638-3176
Johannesburg:
Investor/Media Relations
Anne Dunn +27 11 638 4730
+27 82 448 2684
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