Anglo to explore for base metals in SA but wants Govt to consider “legislative adjustments”

Mark Cutifani, CEO, Anglo American

ANGLO American was interested in exploring for base metals in South Africa, but the group wanted adjustments in legislation, said the group’s CEO, Mark Cutifani.

Responding to questions following a keynote address to the Joburg Indaba, an online mining conference, Cutifani said: “We would like to explore for base metals across South Africa. We are in Zambia and we want to do more in South Africa. So we are looking for some adjustments in the legislation that we’ve made pretty clear to the minister [Gwede Mantashe, minerals and energy department].”

Sibusiso Tshabalala, spokesman for Anglo American, said Cutifani’s comments about legislative changes referred to security of tenure, empowerment ownership and wider investment climate improvements. “We’ve already seen progress, for example, measures to facilitate cross-border financial transactions to align South Africa with OECD practices,” said Tshabalala.

PwC, a consultancy, said earlier this week that South Africa’s prospecting and mining application system was “broken”, referring to long wait times and a lack of transparency and security of tenure regarding applications.

Roger Baxter, CEO of the Minerals Council South Africa, was also critical of the cadastre, known as SAMRAD. “The simple fact of the matter is that our existing systems are nowhere need where they need to be.

“What we need to be doing as a country is providing high level geophysical data. All the pre-competitive information should be available 24/7, and geophysical coordinates showing where those areas are so people can look and see who’s got what, and where.

“Then they need to make an application in a turnaround period of, say, two months to get the process going as quickly as we can,” Baxter said.

“This whole concept around pre-competitive information is absolutely critical and my view is that it is one of the key areas to focus on to get South Africa’s game back on track.” South African controlled only 1% of total global mining exploration spend.

Cutifani also identified nickel, platinum group metals (PGM), and the crop nutrient business as key growth commodities. “We like nickel, as everybody does,” he said. “We’d like to do more with our nickel coming out from South Africa from the PGM business.

“We think material sciences will continue to develop and find new uses for PGMs, and so we are a long-term player in PGMs, hence the desire to develop Mogalakwena and continue modernisation in Amandelbult.

“I still think iron ore and metallurgical coal has a future. Hydrogen technologies will take out metallurgical coal in the long term, but we expect to be growing for 10 years in South Africa and elsewhere,” he said.

Cutifani discounted the likelihood of merger and acquisition activity in the copper industry, however. “We are big in copper. But we are less likely [to act] on M&A as most people have priced in copper fully. But we have got organic opportunities,” he said.

Anglo’s approach to growth was to focus on asset quality rather than pick a commodity that had sustainably strong growth fundamentals. Said Cutifani: “As miners, we are lousy forecasters of commodity prices. We can get it right, but it’s usually luck.

“I sold my gold at $1,650 per ounce and now its $2,000/oz heading for $3,000/oz. That’s how a good judge I am on the gold price.”