Tony Trahar, chief executive, Anglo American
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Anglo unveils far-reaching restructure
David McKay
Posted: Wed, 26 Oct 2005

[miningmx.com] -- ANGLO American, the R287bn resources firm, has ended months of speculation about its future structure unveiling plans to sell some of its non-mining businesses as well as reducing its holding in AngloGold Ashanti from its current 51%.

As part of an effort to keep pace with the activities of its peer group, Anglo American is also to pay shareholders up to $1bn via either a share buy-back programe or special dividend next year. The capital return is independent of any disposals the group might make, said Tony Trahar, Anglo American CEO

This follows similar disbursements to shareholders by Anglo American's peer group which includes Rio Tinto and BHP Billiton.

Anglo American gained 3% on the JSE Securities Exchange in the wake of its extraordinary announcement.
This is a road map for the future
As part of the restructuring, Anglo American is to sell its industrial businesses which includes an 80% stake in Highveld Steel & Vanadium, and a 52.5% holding in Tongaat Hulett. It would also establish Mondi, its investment in the paper and sacking industry, as an independent business.

Tarmac, the UK industrial minerals company, would be restructured either through turning around parts of the business or divesting of others, Anglo said.

In contrast, the group would give greater focus to its mining businesses which include a 45% stake in De Beers, various base metal investments, and Anglo Platinum, the world's largest platinum producer in which Anglo has a 76% stake.

Trahar said it was possible that Anglo American could increase its stake in Anglo Platinum further with cash derived from its restructuring. The company was also considering means of growth and investment in the platinum firm in tandem with an empowerment plan, the company said.

"This is a road map for the future. We could buy more shares in Anglo Platinum, we have a $5bn project pipeline that needs to be financed, we could consider other acquistions, pay down debt or return cash to shareholders," said Trahar on plans for cash generated from the restructuring.
We could consider other acquistions
Commenting on the decision to sell down its stake in AngloGold Ashanti, Trahar said that the R75bn company was "a relatively small contributor to earnings". It also had a different shareholder base to Anglo American's and needed greater flexibility to pursue its own options.

He could not comment on the amount of shares that would be sold in AngloGold Ashanti but said the group would keep "a meaningful investment" in the company, at least in "the medium term".

Commenting on Anglo's announcement today, Bobby Godsell, AngloGold Ashanti CEO said: "I am delighted that Anglo American is supportive of our strategy and will remain a significant shareholder in the medium term."

"We will now enjoy greater trading liquidity, as a consequence of their intention to dilute or be diluted, which is very important for us as a leading global gold company,” Godsell said.

AngloGold Ashanti was down 0.5% on the JSE today trading at R285/share.

Trahar said that some of the cash could be diverted into growing the company's proposed investment in iron ore, an entity that will be separately listed on the JSE in terms of the restructuring of Kumba Resources announced earlier this month.
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Trahar said the group's exposure to South Africa would not be much altered by its divestment in AngloGold Ashanti. "Bear in mind that half of AngloGold Ashanti's earnings are derived from offshore," he said.

"This announcement marks a further step in Anglo American's ongoing strategic development," said Trahar in an announcement to the JSE.

"Through a series of measures we are creating a more focused mining group, better positioned to take advantage of opportunities in our main mining businesses," he said.