A GENERATION of minerals exploration had been lost in South Africa owing to unsupportive policies, said Anglo American CEO Duncan Wanblad.
Speaking at the Joburg Indaba on Wednesday, Wanblad said that while there was a “strong coalition of the willing”, a turnaround in the country’s challenges “would not be tomorrow”.
“South Africa is underexplored today because it had unsupportive policy for exploration in the last 20 years. That is a very important part of mining life cycle,” he said.
“It takes about 17 years from finding deposit to get to full production. If I’m right that is a generation of mines that has been forgone,” said Wanblad.
“Without policy you can’t get a capital intensive industry to commit. You need a relatively stable political environment and transparent fiscal policies,” he said.
“I think that is part of the challenge we have to face [in South Africa], but it is starting to slowly change. There is a strong coalition of the willing to overcome challenges but nothing is telling me it will be tomorrow, but [then] nothing says it can’t be overcome.”
Anglo cut its exposure to South Africa earlier this year selling its remaining 19.1% stake in Valterra Platinum, a spinout of the group’s platinum group metal assets which was called Anglo American Platinum when part of Anglo.
The company is also in discussions for the sale of its 85% stake in De Beers. In addition to private sector interest, Botswana, Anglo’s JV partner in De Beers, is also interested in increasing its stake in the business, potentially taking control. But the sales process has been complicated by a slump in the diamond market.
“The markets are still challenging for De Beers,” said Wanblad. “But there are lots of green shoots. It feels like we’re not sinking in the market and that it is bottoming,” he said.
“There are a number of interested parties in De Beers that love diamonds which is very positive. We don’t just have private equity,” he said of the sales process. Bloomberg News reported in June that former De Beers CEOs Gareth Penny and Bruce Cleaver were heading groups of potential purchasers.
Earlier today Anglo said that the terms of its proposed “merger of equals” with Teck Resources, unveiled last month, remained intact after the Canadian firm announced it had lowered copper production targets for this year.
Copper production was revised down to 415,000 to 465,000 tons this year from previous guidance of 470,000 to 525,000 tons.
The reduction was mostly related to Chile’s Quebrada Blanca (QB) owing to delays in the development of a tailings management facility (TMF). QB was expected to produce 170,000 to 190,000 tons compared to previous guidance of 210,000 to 230,000 tons.
“While the specific outcome of the operational review that Teck has announced today was not known at the time, the outcome presented by Teck is broadly consistent with Anglo American’s independent due diligence and analysis,” said Anglo in a statement.
“On this basis, the overall strategic rationale for the merger and all synergy values and their timing, as outlined in the September 9 merger announcement, remain unchanged,” it said.
