Does Agarwal have a masterplan for Anglo? Probably not

Anil Agarwal, Vedanta executive chairman

ANIL Agarwal, executive chairman of the UK-listed diversified mining group Vedanta, admits having a poor grasp of English, but he’s a dab hand at adverbs; in particular, the use of ‘now’, as in “for now”, or the noun ‘moment’ as phrased in “… at the moment”.

Take for instance his comment to The New India Express in October, shortly after increasing his personal stake in Anglo American to about 20%. Asked if he intended to request a board seat at Anglo, he said: “I want to operate as a shareholder without a board position, for now”. He was at it again in an interview with Bloomberg News on the sidelines of the World Economic Forum in Switzerland. Commenting on his family trust’s stake in Anglo American, he said: “At the moment, it’s a personal investment”.

I admit, this may be an over-interpretation of merely casual remarks, but I am also tempted by an observation made by the Financial Times, which commented following an interview with Agarwal in 2014: “[H]e cheerfully admits his spoken English remains a work in progress … although he makes his points clearly enough”.

If Agarwal is making a point about Anglo American, what is it? Fundamentally, he wants to be involved; that’s obvious. The interesting aspect of his approach, however, is the watchful passivity, and that he doesn’t seem to have a particular strategy. From what he says, it looks like he wants to be able to simply react to the right opportunity when it presents itself, perhaps one provided by other shareholders such as South Africa’s Public Investment Corporation (PIC), a government-owned asset management firm.

Agarwal has been careful to woo the government. Witness how respectful and thoughtful he was of South Africa’s challenges. He told Miningmx in an interview last year that: “We are entrepreneurs and there are some risks we have to take … the South African government and people have opened their arms. We don’t get moved from pillar to post for approvals, and South Africa operates by the rules”.

Well, that sounds like complete nonsense. In fact, I know of no foreign or local investor who would agree with this. As far as pillars and posts go, South Africa’s hapless and misdirected, mis-managed Department of Mineral Resources is a world beater.

That was a year ago. Now, there are signs that under ANC deputy president, Cyril Ramaphosa, the country’s mining sector could fling the doors open to new investment. Perhaps the mistake often made with entrepreneurs-turned-corporate owners like Anil Agarwal is in assuming they have a masterplan. Sometime, entrepreneurs – like top football centre forwards – have a knack of turning up in the right place, at the right time.

Naguib Sawiris is another.

The Egyptian telecoms tycoon bought a stake in Evolution Mining, an Australian company in 2015 and then another in Endeavour Mining, a West African gold play, and has been investing in their growth ever since. This year, however, he launched a standalone gold company, to be run by Andrew Wray, the Spanish-speaking former CFO of Acacia Mining. That doesn’t make sense given La Mancha, the investment firm through which he financed shares in Evolution and Endeavour, are already doing that job.

In the case of Agarwal, the right place would appear to be Africa and the vehicle may well be Anglo. As for the time, it’s questionable even he knows that.