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Curtain comes down on Oppenheimer legacy Posted: Wed, 01 Nov 2006 [miningmx.com] -- THE OPPENHEIMERS’ first love was diamonds. In the 21st Century it’s diamonds again. But for more than 80 years they ran probably the world’s biggest family-controlled diversified mining group and one of the biggest family-controlled companies in any sector. It started when the founder of the dynasty – later knighted as Sir Ernest – was sent out from London to take over the Kimberley office of the diamond trader A Dunkelsbuhler. In 1917 Ernest acquired gold mining rights on the East Rand and, backed by US firms Newmont Mining and JP Morgan, set up the Anglo American Corporation to exploit them. The Americans soon sold out, but the name endured. For some time, Anglo launched a major new venture every decade. The Twenties brought East Rand gold mines like Springs, Brakpan and Daggafontein; the Thirties the move into copper in then Northern Rhodesia; the Forties (after the end of the Second World War) the development of the Free State goldfields. In parallel, Ernest Oppenheimer acquired control of the diamond fields of ex-German South West Africa (now Namibia) after the First World War and in 1929 was elected chairman of the doyen of the diamond mining industry, De Beers Consolidated. That was followed by the establishment of the near-monopolistic Central Selling Organisation. Although both De Beers and Anglo (as well as many of their subsidiaries and associates) were listed public companies they were run as family fiefs. When Ernest’s elder son was killed during the First World War, his younger brother Harry was drafted in his stead. Harry succeeded Ernest as chairman, and when he retired in 1985 (he died only in 2000) it was generally assumed that the seat would be kept warm for the next generation. Harry’s son Nicky and grandson Jonathan were already apparently being groomed to assume the royal purple. But it was not to be. Gavin Relly, who chaired Anglo until 1990, was succeeded by Julian Ogilvie Thompson, who already chaired De Beers. Nicky had been a director of Anglo since January 1974 and of De Beers since March 1978. Between 1983 and 2001 he was Anglo’s deputy chairman but resigned that post as his responsibilities at De Beers, where he’s now chairman, grew. He’s since been a non-executive director. Jonathan isn’t even a director of Anglo, only of De Beers, and was recently shunted from running its South African operations to a non-specific position in the office of the chairman – his father. With the appointment of Cynthia Carroll it’s clear that the outgoing Tony Trahar will be the last Anglo CEO to follow the standard career path. Traditionally, Anglo was run by bright young men picked from Oxford University to cut their teeth as a PA in the chairman’s office – which, for 60 years, meant working directly for Ernest or Harry. Those who impressed were almost guaranteed to end up on the main board; most of the chairmen and CEOs followed that pattern. As Anglo grew that paternalist approach became anachronistic. The death blow was the shift of the primary listing from South Africa to London and the appointment of Sir Mark Moody-Stuart, a pillar of Britain’s establishment, to the chair. Now the South African-born Trahar is to be followed by an internationally minded American whose closest involvement in South Africa – the Coega aluminium smelter project – will hardly have left her an uncritical admirer of the country. Despite good intentions and the group’s protestations to the contrary, it was always on the cards that this would also lead to a downgrading of South Africa in Anglo’s priorities. The process of getting rid of non-core assets inevitably concentrated on businesses acquired or built up in South Africa during the apartheid era, when opportunities to invest overseas were limited. Conversely, new ventures of the scale Anglo needed equally inevitably were mostly found overseas. And again, despite protestations of good faith, the Johannesburg office has been savagely cut back from the driving force of the group to little more than an offshore twig. If Anglo has a future as a standalone resources group it will be led from London. And the cruel truth is that there won’t be much input at the top from the Oppenheimer family. It’s believed that there are serious differences between the family and the Anglo board, stemming partly from a feeling that it was the family that gained most from the terms of the consolidation of De Beers and Anglo. Nicky turned 60 last year, so he has a limited future in business. It can’t be assumed that Jonathan will be the fourth generation to take up the reins at De Beers, while his links with Anglo are even more tenuous. And like the company they founded and led for so long with such success, the Oppenheimer family’s bonds to South Africa are loosening.Free news alerts: click here to subscribe
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