Anglo interested in returning to Zambia
Anglo American would look at acquisitions in Zambia, with the copper-rich country moving much faster than SA to make itself attractive for mining investment, says Anglo CEO Duncan Wanblad.
“I think Zambia is doing a really good job of making mining investable in that country. It seems to me there is quite a lot of action behind the talk,” Wanblad said on Monday.
SA is moving much more slowly on reforms and Wanblad said he is concerned that this year’s general election could cause a lack of focus on the energy, logistics and corruption issues which have had a material impact on the mining industry and the economy. “They need to remain a priority because if they don’t, if we take our eye off the ball, things will get considerably worse and we can’t afford for that to happen,” he said.
Wanblad was speaking in an interview in Cape Town on the sidelines of the Investment in African Mining Indaba. This is the 30th Indaba and the largest yet, with 11,000 delegates from 126 countries registered this year, 8,000 of whom attended the event on Monday.
Zambian President Hakainde Hichilema, who addressed the opening session, emphasised Zambia’s “Invest with Confidence” message and listed a string of investments worth over $4bn that have been undertaken by global mining companies since he took over in 2021 and undertook to turn around the investment climate.
The Zambian president’s focus on progress, rather than promises, was in contrast to
President Cyril Ramaphosa’s more muted address, which listed limited progress on the objectives he set out at last year’s Indaba.
Anglo’s extensive Copper Belt operations were nationalised by the Zambian government in the 1970s, but it returned to the country a decade or two later before exiting again because its operations weren’t making money.
The copper price was around 79 US cents a pound at the time Anglo exited and is now about $3.70, though this is well off 2022 peaks of almost $5, despite a scarcity of the metal.
Anglo already has a large greenfields exploration programme in Zambia, which along with the Democratic Republic of Congo is extremely well endowed with base metals essential for the “green” energy transition including copper, cobalt and nickel.
TECHNOLOGIES
“Where do you go but where the good rocks are, and they just happen to be in Central Africa. But it [an acquisition] has to be right for us,” Wanblad said.
Going back in would depend in part on whether some of the technologies and mining methods that have been developed since Anglo was last in Zambia had moved on enough to make some of the deposits from its previous mines economically viable, he said.
SA feels a lot more complex than Zambia and is moving more slowly, Wanblad said, but SA is a very noisy democracy and “there’s a lot more talking and it takes a lot longer to get that talking done. But as long as the
talking is happening it’s better than not happening,” he said.
The rate at which progress is being made on dealing with SA’s issues of crime, corruption, energy and logistics is frustrating, but there is genuine progress, Wanblad said.
Conversations between Ramaphosa and his key cabinet ministers and business on an action-oriented agenda to address these issues is “a big deal”, though action is slow and SA cannot afford to have its infrastructure failing at the current rate. “It doesn’t feel like it’s even plateaued yet,” he said.
The industry has hailed mineral resources & energy minister Gwede Mantashe’s announcement on a preferred bidder for a new cadastral system for mining licences as a positive development for SA, which relative to the rest of Africa has seen very little investment in grassroots mining exploration.
SOLUTIONS
“Having a very transparent cadastre … is potentially groundbreaking,” said Wanblad.
“But you’re not going to attract the levels of investment that go into the fostering of an exploration portfolio without having clear sight of the solutions that deal with the infrastructure problem,” he said.
Anglo’s Kumba iron ore subsidiary is one of the companies that’s been severely affected by Transnet’s failure to provide rail services. It had to shut production last year when it was stuck with 9-million tonnes of stock which could not get out to market. It has now cut production from around 41-42 million tonnes a year to between 36million and 37-million tonnes a year for the foreseeable future, at a time when iron ore prices have remained very strong.