Cynthia Carroll, Anglo American CEO
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SA lays down the law for Anglo CEO
Allan Seccombe
Posted: Mon, 29 Jan 2007

[miningmx.com] -- INCOMING Anglo American CEO Cynthia Carroll left her first meeting with South Africa’s mines minister with little doubt about the role the government wants to see the country’s largest mining company playing in transforming the sector.

Two issues were made abundantly clear. The government wants an appointment at the head of Anglo South Africa that it can work with – read an affirmative action appointment -- and it is deeply unhappy with Anglo subsidiary Anglo Platinum’s empowerment efforts thus far.

Carroll, who arrived in South Africa from the World Economic Forum meeting in Davos, Switzerland to visit Anglo’s platinum, coal and iron ore operations, had a long lunch with mines minister Buyelwa Sonjica shortly after her arrival.
standoff between ourselves and Anglo Platinum
Carroll, 49, takes over the male-dominated helm of Anglo American from 1 March after Tony Trahar steps down as CEO at the April annual general meeting. She joined the board in mid-January, leaving her position as the president and chief executive of Alcan Primary Metal.

Sonjica dominated a very brief, very late media conference after the lunch, laying down the law in no uncertain terms on what the government expects from Anglo in meeting the requirements laid out in its Mineral and Petroleum Resources Development Act.

“We thought it is important that the new CEO has a full understanding of the Act and more importantly the philosophy behind it,” Sonjica said in a Pretoria guesthouse, adding there had been “misunderstandings and distortions” between her ministry and mining companies over the Act.

“That kind of misunderstanding and distortion has been happening between ourselves and Anglo Platinum. We have not come up with a solution as to how best we will deal with those problems, but we’ve agreed we need to meet again and deal with all of these matters,” she said.

In her first interaction with a group of South Africa-based journalists, Carroll did not address Sonjica’s points and instead stuck rigidly to a blander line about looking forward to working with the government and minister, and how important that relationship was.

“I’m looking forward to spending a lot of time in South Africa and spending a lot of time with the minister herself and doing great things together,” Carroll said.

Of the two questions her minders allowed, Carroll offered no insight into the unbundling of Mondi, or whether the meeting had been tougher than she’d expected. She was so rushed that she stood up during the second question, and more or less dismissed it with a laugh.

“Oh no, I think we’ll see things in a very common way. I sense her approach is similar to my approach in terms of being open and transparent and wanting to work together,” Carroll said.

Anglo Platinum, the world’s largest platinum producer, is applying for the conversion of old-order mining rights into new-order rights in a process that has taken three years. Other platinum companies received their rights in half the time.

“The standoff between ourselves and Anglo Platinum is about different interpretations of what we require in the Mining Charter (within the Act),” she said. The areas of social and labour plans were a major sticking point between the two.

Anglo Platinum, which is 75% owned by Anglo, reckons it is more than 15% empowered through a number of deals, but the DME is not fully convinced, saying it does not recognise undeveloped ounces in the ground -- as opposed to production ounces -- sold to empowerment companies as empowerment.

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“They (Anglo Platinum) must come to us, make us understand and accept this (interpretation),” said the DME’s Jacinto Rocha. “Anglo Platinum wants a special dispensation for themselves.”

“Anglo Platinum is the only ones who is offering ounces in the ground as part of empowerment. The others came with production units,” he added.

Anglo Platinum declined to make any comment on comments by Sonjica or Rocha.

Trahar said in November the world’s third-largest mining company wanted to have black economic empowerment at all its South African operations either in line with mining legislation or exceeding it in 2007.

Apart from singling out Anglo Platinum for criticism again, Sonjica offered up another pearl of interest once Carroll had left, asking what could be done to strengthen the relationship between one of the world’s largest mining companies and the government.

She answered herself by saying the person who dual-listed Anglo appointed as chief executive of Anglo South Africa, a position now filled temporarily by Philip Baum, would play an important role in developing that relationship.

Lazarus Zim, who had filled the position, left to pursue his own ventures in empowerment. Zim was seen largely as a token, figurehead appointment with no real decision-making clout.

The board sitting in London makes the decisions, and questions have been raised whether the next appointment to head up the South African operations will have more executive clout, something the government would dearly like to see and appears to be angling for now.