South Africa Wants `Black Champion’ to Fill Anglo Mines Void – by Andre Janse Van Vuuren and Michael Cohen (Bloomberg News – February 18, 2016)

http://www.bloomberg.com/

As Anglo American Plc scales back its operations in South Africa, the government is coaxing black investors to fill the void in mining left by a conglomerate that once dominated industries from coal mining to paper, banking and sugar.

Mines Minister Mosebenzi Zwane said Anglo American’s announcement on Tuesday that it may exit its 69.7 percent stake in Kumba Iron Ore Ltd. could encourage the emergence of “new black economic empowerment champions.” The minister and his predecessor Ngoako Ramatlhodi have both called for the creation of a leading black-owned mining company.

The push for black citizens to increase their ownership of the mining industry, which once formed the bedrock of the economy, comes as South Africa grapples with addressing racial disparities that have persisted since the end of white minority rule in 1994.

While the Chamber of Mines, an industry body, says black control in mining averaged 38 percent by the end of 2014, the government said just 20 percent of companies had complied with a requirement that they be 26 percent black-owned.

“There is a lot of emphasis on radical economic transformation and everyone is scrambling to find something to showcase,” Mzukisi Qobo, an associate professor at the University of Johannesburg, said by phone on Wednesday. “If it doesn’t do anything about it, it will be used by populists to show that the economy is still in white hands.”

Black Management

Of the seven largest mining companies that trade on the Johannesburg Stock Exchange, only Exxaro Resources Ltd. is controlled by black management. The Economic Freedom Fighters, South Africa’s second largest opposition party, has been pushing for the nationalization of mines, an option the government has ruled out.

For the rest of this article, click here: http://www.bloomberg.com/news/articles/2016-02-17/south-africa-looks-to-black-champion-to-fill-anglo-mining-void

Comments are closed.