DARREN SCHUETTLER, Johannesburg | Tuesday
ANGLOGOLD chief Bobby Godsell says the rationalisation of South Africa’s gold industry is a ”national imperative”, but he has steered clear of speculation that his company is eyeing rival Gold Fields Ltd.
Analysts have mooted a tie-up of the country’s two biggest gold producers after Anglo American Plc, AngloGold’s majority shareholder, increased its holding in Gold Fields to 17% last week.
Godsell, who is chairman and chief executive, declined to comment on the merger speculation. But he said like any other shareholder, Anglo would want value from its investments.
”I think Anglo will be seeking to realise value out of its shareholdings in both AngloGold and Gold Fields. They will look to the management of both companies to produce a business strategy that realistically promises that,” he said.
Godsell, 48, assumed AngloGold’s chairmanship after Nicky Oppenheimer announced his decision to step down on Sunday.
In recent months he has spoken broadly of a consolidation of South Africa’s vast gold reefs, saying there would be enormous advantages in cost cutting and production if divided ore bodies were put back together.
”I think the rationalisation of the South African industry is a national imperative. I don’t think any company, whether it’s AngloGold or Gold Fields, can stand outside of that,” he said.
”This is not a question about which company holds the most cards. It’s a question about what makes the most powerful combination from a geology and infrastructure point of view in a $270 (an ounce) scenario,” Godsell added.
AngloGold itself has put at least two of its South African mines on the block and is awaiting bids from local producers Harmony Gold and Durban Roodepoort Deep.
AngloGold, with annual output of seven million ounces, and four-million-ounce producer Gold Fields have launched ambitious plans to diversify outside South Africa.
AngloGold has made acquisitions in the rest of Africa, Australia and the Americas, and Godsell said the company would ”participate vigorously” in a global industry consolidation.
Godsell said the fourth quarter would be ”really tough” due to a slew of holidays hitting production schedules. But he forecast better times ahead after a year hobbled by underperforming mines in South Africa and slipping profits.
”What we have said as part of the change in chairmanship… is that we are going to focus on earnings and profits and we are going to ensure strong shareholder return,” he said. – Reuters