Am­bi­tious black busi­nesses line up for An­glo bids

The Star Early Edition - - BUSINESS REPORT - Loni Prinsloo and Paul Burkhardt

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.

Eskom con­tracts

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

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