ANGLO American CEO, Mark Cutifani described discussions with Transnet regarding a potential investment as “very early days”, but added that the tide may have turned in the reform programme undertaken by South African president, Cyril Ramaphosa.
Themba Mkhwanazi, CEO of Kumba Iron Ore said on Tuesday that the group – which Anglo controls with a 70% stake – was exploring “the art of the possible” with Transnet regarding assisting the company amid a raft of logistical and staffing problems.
Transnet is owned by the South African government, but has stumbled badly; most recently it said exports had been handicapped following a cyber attack. There have been derailments and absenteeism this year which have held up coal, manganese, and iron ore exports. Kumba recently lowered its sales target for 2021 by one million tons.
“Themba hasn’t put anything to us,” said Cutifani responding to questions following the publication of the UK-listed group’s interim results today.
Cutifani said that regarding private-public partnership with the South African government, Anglo had a track record of offering its help, principally to Eskom, the government power utility which has problems, including questions over solvency, that dwarf those of Transnet.
“Like that, we have conversations,” said Cutifani. In respect of Transnet, Anglo was looking at how the company could improve its performance on the rail.
Cutifani’s comments come against a background of recent violent protests and looting of retail centres and industrial facilities in South Africa that raged for a week following the imprisonment on contempt of court charges of the former president, Jacob Zuma.
Cutifani said the public response to the criminality in South Africa was one of solidarity which indicated President Cyril Ramaphosa had broad support. “It provides Cyril and his administration an inflection point as clearly people believe in him,” said Cutifani.
The liberalisation of the energy market, in which unlicensed private energy production of up to 100MW has now been permitted, was an example of reform the government was willing to take.
“The energy policy is a good example of a forward-looking policy. It shows the government is adapting,” said Stephen Pearce, CFO of Anglo American. The relaxation of exchange controls that allows Anglo American to repatriate cash to a single, UK-based balance sheet, had shown that the government “… wanted to do business with business,” said Pearce.
Anglo derived about 60% of earnings before interest, tax, depreciation, and amortisation for the interim from South African assets with Anglo’s 80% stake in Anglo American Platinum and its 70% share in Kumba Iron Ore making massive contributions.
- Sign-up for our free daily news alert here
