Sibanye shaking up mining

SIBANYE is certainly shaking up the mining sector.

Its aggressive but extremely welcome comments about seeing opportunity in Anglo American Platinum’s “rejects” does reinforce the suspicion that the long-established mining groups may have become a little flabby and accustomed to easy profit.

But Sibanye does make the important qualification: “at the right price”.

It’s difficult to see what even Neal Froneman will be able to do with geological challenges at Amplats’s Rustenburg mines. These challenges considerably restrict implementation of any plans to mechanise.

But Froneman has developed a reputation for engaging with workers, so perhaps mechanisation will not be as critical under his management.

Perhaps if Froneman does pull off the seemingly impossible, the Public Investment Corporation will cut his board some slack on the matter of the exceptionally generous fees being paid to Sibanye’s nonexecutive directors.

Sibanye was one of the JSElisted companies reprimanded by the PIC in its record of AGM voting during the three months to June.

AngloGold Ashanti and Goldfields were also fingered for overpaying their nonexecutive directors. But nonexecutive greed went beyond the mining sector to financials.

Liberty Holdings wants to pay its chairman and directors a fee for all ad hoc work on an hourly basis. “It’s the PIC’s view that the introduction of this fee over and above the normal board fees is concerning.”

Alstom

Two days after releasing results that revealed the substantial benefits to Alstom of the large order from our very own Passenger Rail Agency of SA (Prasa), the UK’s Serious Fraud Office announced that several of Alstom’s former employees will be facing criminal charges.

The charges include three counts of corruption and three of conspiracy to corrupt. They relate to alleged wrongdoing on large transport projects in Tunisia, Poland and India from 2000 to 2006.

But the Financial Times reports that the charges against the six individuals involved “do not necessarily relate directly to those against the company and include other jurisdictions”.

News of the charges almost coincided with Alstom’s announcement of the contract for the supply of 600 commuter trains to Prasa with a value of about R72-billion.

Tullow Oil

It seems that Tullow

Oil, which was founded in 1985 in Ireland — home to aggressive tax management — has been ordered to pay capital gains tax of $407-million by the Uganda Tax Appeals Tribunal.

The order follows Tullow’s sale of its oilfield assets to French energy giant Total for $2.9-billion in 2012, and will certainly add to its current woes.

Tullow had appealed an earlier tax charge of $473-million on the grounds that the Ugandan tax authorities could not retrospectively overturn an agreement signed by the Uganda energy minister.

The company was referring to a production-sharing agreement between Tullow and Uganda’s ministry of energy and mineral development.

The tax tribunal found that the minister did not have the authority to grant the sort of exemption claimed by Tullow.

The African Tax Administration Forum, which is determined to fight the impact on African economies of “aggressive tax management” by powerful multinationals, described the tribunal ruling as a “victory for the tax authority in combating the erosion of their tax base”.

Tsogo Sun and HCI

This week’s meeting of Tsogo Sun’s shareholders should be an entertaining event with much focus on the controversial R200million interest-free loan to five directors so they can buy loads of Tsogo Sun shares.

It’s unlikely that the meeting will provide the opportunity to interrogate the major beneficiary of this loan, which is HCI — the soon-to-be indisputable controlling shareholder of Tsogo Sun.

The loan will tie the five executives to Tsogo Sun, and is likely to be a little cheaper than other forms of incentives.

It’s hard to know why they weren’t just required to buy Tsogo Sun options.

Perhaps the company will use the meeting to announce an incentive scheme that will benefit some of the remaining thousands of employees. But don’t hold your breath.