AngloGold CEO Bobby Godsell is seen as a key strategist behind the watershed framework deal on black empowerment struck between mining interests and the state at a meeting this week.
Close observers said that with his negotiating skills and keen and sympathetic insight into government thinking, Godsell had been able to “shepherd” his colleagues towards an accommodation.
Godsell was part of an Anglo American delegation, also including Anglo American CEO Tony Trahar, De Beers’s chairperson Nicky Oppenheimer and managing director Gary Raife, and Anglo Platinum chairperson Barry Davison, who met a top government team in Cape Town.
Across the table were Minister of Minerals and Energy Phumzile-Mlambo-Ngcuka, Minister of Finance Trevor Manuel, Minister of Trade and Industry Alec Erwin and Minister of Labour Membathisi Mdladlana.
The context was a controversial draft minerals department empowerment charter for mining, whose leaking two weeks ago sent mining stocks into free fall. The market crash, a response to the charter’s call for a 51% black stake in all new mining ventures, among other proposals, clearly stunned the authorities.
Approached by Anglo for a meeting, President Thabo Mbeki is known to have asked for the industry’s help in stabilising the markets.
As Anglo controls 70% of South Africa’s mining assets, the accord is seen as trail-blazing. Its sequel will be a two-day encounter next week where the government, unions and established and emerging mining companies will begin talking turkey on an industry charter.
The deal, announced in a joint statement, repeats earlier statements that the leaked charter was a mere discussion document. It commits Anglo to “full support” for empowerment, including the broadening of black influence and ownership, and to the negotiation of a charter that reflects these aims.
The industry has long professed such a commitment, but sources say the context — the leaked charter immediately shaved 12% off the Johannesburg Securities Exchange’s gold index — had also shaken mining leaders, who now grasped the possible consequences if they failed to bring more to the table.
However, the accord undoubtedly entails major concessions by government. Key among them is the acknowledgement that empowerment in mining cannot be governed by “one-size-fits-all” quotas for black ownership.
Analysts remark that the minerals department had approached mining in the same way as the liquid fuels industry, whose empowerment charter enshrines a 25% ownership transfer.
“Liquid fuels is a smaller, more uniform business with fewer players, most of them unlisted,” one analyst said.
An added complication was the high level of foreign shareholding in mining — 70% in Anglo’s case. A greatly increased local stake in a R750-billion industry over 10 years would entail large-scale disinvestment, with potential fallout for the macro-economy.
In addition, the imposition of uniform quotas made no sense where mining companies had different prospects and were not equally attractive to would-be black owners.
The joint statement is careful to underscore the importance of foreign capital, stressing that local and foreign investment had underpinned the growth of South African mining over a century.
In a clear response to the market crash, government also conceded that ownership transfers in mining had to be transparent and market based, and disavowed any government plans to nationalise the industry.
The leaked charter proposed the warehousing of mining shares by the parastatal Industrial Development Corporation, which government has seen as a key financing agent for empowerment in mining. This prompted claims of a state asset grab.
The ministers give the assurance that empowerment should not have “the unintended consequence of undermining opportunities or rewards for investors”.
Some commentators brand the market reaction to the leaked charter racist. The real dynamic, analysts say, was investor perceptions that black enterprise could not marshal the necessary finance to meet high quotas — implying the sale of assets at below their market value.
Also influencing the ministers was the African National Congress’s more adamant commitment — spelt out in its pre-conference documents this week — to empowerment of the many, rather than a handful of black millionaires.
Anglo pitched its counter-offer at broad-based empowerment on the mines, also embracing such matters as employment equity, the upliftment of mining communities and employee share schemes.
“Godsell and the rest were essentially pushing at an open door,” said one insider.