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Anglo Pt concedes Govt discontent Posted: Mon, 12 Feb 2007 [miningmx.com] -- THE South African government was unhappy with the time being taken to complete Anglo Platinum's empowerment deals, said CEO, Ralph Havenstein who added that two more transactions were planned. "The main issue that is worrying government is the time being taken to find a final solution," said Havenstein at the group's year-end results presentation. "It is our intention to embrace empowerment. We are fully committed." Anglo Platinum was a large company and owing to the fact it was doing its empowerment at the asset level, the deals were complex, said Havenstein. It was "almost impossible" to finance deals at the equity level, he added. It is understood the South African government's minerals and energy department (DME) has been critical of Anglo Platinum's empowerment drive. One problem is that Anglo Platinum wants to claim empowerment base on unmined resources in the ground it sells to black investors rather than units of existing production. Havenstein lashed out at international analysts who he said were placing unnecessary pressure on the DME by inquiring about the progress of Anglo Platinum's empowerment. "We think that is quite inappropriate. We're not looking for that," Havenstein said. Anglo Platinum still had two more deals to complete, said Havenstein without providing details. Analysts have wondered, however, whether the group will have to sell its major profit-drivers. "The key question is: Will the group have to sell some of its "engine room" assets; Rustenburg, Amandelbult and PPRust – and if so, at what price?," said Allan Cooke, an analyst for JP Morgan in a research note today. Miningmx reported in December that Anglo Platinum was working with a black-owned consortium led by Anooraq Mining to buy a 15% stake in Lebowa Platinum. The DME is fully informed on developments in agreeing the two latest empowerment transactions, which Anglo Platinum hopes to complete before the end of 2007, Havenstein said. "They know which deals we are talking about. We keep them informed. They are complex and there's a lot of money involved," he said. The market knows Anglo Platinum is trying to seal an empowerment deal, but the scale of it and which asset or assets might be involved is a mystery, said Hugo Nelson, a fund manager at Coronation Fund Managers. Anglo Platinum would have to sell a stake in one of their prime assets -- Rustenburg, Amandelbult or PPRust -- to bring themselves up to the 26% stake, said Nigel Suliaman from Metropolitan Asset Management. "If they go for empowerment of any of their smaller assets it is difficult to see how they will get across that golden hurdle," he said. "The longer it takes the more difficult it becomes. The players who are able to pay might get sucked into other deals." Anglo Platinum is talking to unions about the introduction of an employee share ownership programme (ESOP), Havenstein said. It could take between one and two years for the scheme to be implemented. Anglo Platinum would not count the scheme towards its 26% equity empowerment rating, he said. "It's quite an expensive option and it is, in a sense, delinked from the BEE. It's not part of our sums. We think it's the right thing to do," he said. Meanwhile, Anglo Platinum was in discussion with the DME about having been refused certain prospecting rights. The company had initiated legal action but Havenstein said dialogue with government on this front had resumed. "We are whole-heartedly pursuing this," he said. Click Here to subscribe to our daily newsletter
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