PIC puts its weight behind Anglo’s halt of dividend payout
THE PUBLIC Investment Corporation (PIC), a shareholder in Anglo American, said yesterday that it backed the diversified mining company’s plan to put the brakes on dividend payouts, while at the same time cutting 85 000 jobs worldwide.
The company said on Tuesday that it would halt its dividends and restructure by selling assets and shutting mines.
The PIC was supporting any initiative that aimed to ensure the long-term financial sustainability of the company to the extent that these were in line with its clients’ investment mandates.
“It is further important to note that the suspension of dividend payout by Anglo American is simply a reflection of the current depressed nature of the commodity cycle and other companies in similar circumstances have also implemented cuts or suspended the dividend payments altogether,” the PIC said.
The PIC owns 7 percent in Anglo and manages more than R1 trillion worth of assets on behalf of government employees.
However, Cosatu wants the government to revoke Anglo’s mining licences.
Cosatu spokesman Sizwe Pamla said Mineral Resources Minister Mosebenzi Zwane should take away the mining licences of companies that were not prepared to keep their mines operational.
He said that South Africa would be hit the hardest by this decision because Anglo employed about 45 000 workers in South Africa.
“It will also worsen a bad situation following an earlier announcement by the mining company, Lonmin, that they will cut 6 000 jobs due to the falling commodity prices and high costs of production.”
Lonmin said it would cut production and shut high cost production, which would likely affect 6 000 people by next year because of the demise of the platinum price.
“The mining companies should engage the National Union of Mineworkers (NUM), a responsible union about how they plan to reskill the mineworkers, who face retrenchment.”
24 000 laid off
The NUM said this week that so far this year about 24 000 mineworkers had been laid off as commodity prices hammered mining firms.
“The government should also put concrete proposals on how these companies will be assisted to cut the costs of doing business without compromising the jobs of workers,” Pamla said.
This was not the first time the world’s fifth biggest diversified mining company received a backlash from organised labour.
In 2013, labour unions were up in arms after its platinum unit Anglo American Platinum (Amplats) said it would cut 14 000 jobs due to a cocktail of problems, including high input costs and weakening commodity prices.
Amplats, which has restructured its firm and sold its Rustenburg operations and Union mine to Sibanye Gold, warned on Tuesday that it would incur R14.2 billion of assets and R900 million of restructuring costs.