Ambitious black businesses line up for Anglo bids
ANGLO American had shortlisted groups led by some of South Africa’s most prominent black business people as bidders for several of its South African coal mines as it focused on diamonds, platinum and copper, two sources familiar with the discussions said.
Groups selected by Anglo included companies that were led by Mike Teke, the president of South Africa’s Chamber of Mines; Phuthuma Nhleko, the chairman of the Phembani Group and the head of Africa’s biggest cellphone company, the MTN Group; and Sandile Zungu, the executive chairman of Zungu Investments, according to the sources who preferred to remain anonymous because the information was not public.
The Rand Merchant Bank was involved in the process, they said.
Anglo, founded in Johannesburg in 1917, announced plans in February last year to sell more than half its mines to focus on a smaller group of commodities.
The mines that are under discussion are those that sell coal in South Africa, mainly to Eskom Holdings, the stateowned power utility.
Together the assets – the New Vaal, Kriel and New Denmark mines – account for about half of the company’s South African coal production.
The three mines combined produced almost 7 million tons of coal in the third quarter of last year, according to Anglo.
While the value of the coal contracts with Eskom varied, they averaged about R500 per ton, said Khulu Phasiwe, a spokesman at the utility. That would equate to about $1 billion (R13.6bn) worth of coal annually from the Anglo assets.
The government was pushing companies to boost black involvement in the economy to make up for discrimination during apartheid. Eskom said it wanted suppliers to be black-controlled.
Anglo would not comment on potential bidders due to confidentiality agreements, the company’s spokesperson, Moeketsi Mofokeng, said. “We continue to engage Eskom and the government about the process that we’ve embarked on.”
Teke, Zungu and RMB also declined to comment. Phembani did not immediately reply to e-mails seeking comments for this story. – Bloomberg