AngloGold plans empowerment selloff
June 8, 2005
By Stewart Bailey
Johannesburg - AngloGold Ashanti would sell shares in its South African mines to black investors, including some of its workers, to ensure that the government renewed its mining permits, it said yesterday.
`We always knew it would be necessary to do a further black empowerment transaction, both to meet the requirements of the mining charter and our own strategic goals,` Alan Fine, an AngloGold spokesperson, said yesterday.
Parliament last year passed a law forcing mining companies to sell 15 percent of their local business to black investors by 2009 and another 11 percent by 2014.
The new legislation, to be mirrored in industries from farming and banking to telecommunications and construction, is to help make amends for discrimination during apartheid.
Jacinto Rocha, the deputy director-general of the department of minerals and energy, said the government required that AngloGold sold at least 5 percent of its local mines to black investors.
The company`s seven South African mines accounted for about half its 6.05 million ounces of output and about 43 percent of its cash operating profit last year.
`They are quite close to meeting the equity targets,` Rocha said. `Five percent is the minimum they must sell.`
AngloGold, which has filed applications to renew its mining permits, has claimed some credit under the black empowerment laws for mines it sold to African Rainbow Minerals Gold, a black-owned company that has since been acquired by Harmony Gold Mining. The mines were sold before the laws were passed.
Fine said the company planned to sell some shares to its South African workforce, most of whom are black.
The employee share ownership programme, as it is known locally, would be `an important part` of achieving the government`s requirements, Fine said. The company had no time frame to sell the shares, he added.
The law also requires that companies create social development plans for communities surrounding their mines and from which they draw labour; ensure that within five years 40 percent of their managers are black; and promote their workers` literacy.
AngloGold`s shares fell R8.15, or 3.5 percent, to close at R224.79 yesterday. The FTSE/JSE Top40 index eased 0.95 percent.
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