Black economic empowerment (BEE) in South Africa, climate change and Anglo American’s contribution to wider development are among the issues that are fundamental to the future of its business, Anglo chairperson Sir Mark Moody Stuart said on Tuesday.
Speaking at the group’s annual general meeting in London, he said Anglo works in an industry with long-term investment horizons and which is ultimately dependent on a licence to operate. In many countries issues surrounding the control of natural resources — especially when prices are high — stir significant passions.
“In resource-dependent economies, the revenues which we generate can be used to fuel wider development — as has been the case, for example in Botswana — or they can be misused and lead to the enrichment of elites.
“Moreover, given the pivotal role of the BRIC — Brazil, Russia, India and China — economies in our markets, the resource industries are at the cutting edge of an unprecedented fast shift in the balance of economic power.
“These considerations mean that we must ensure that we: read political risk accurately; anticipate society’s expectations of our industry; and be prepared to work with partners to improve the development outcomes of our work,” he said.
In South Africa, where Anglo has about a third of its assets, while some significant issues remain relating to the conversion of some of its mineral rights under the new dispensation, over the past year it has made good progress with a variety of BEE transactions including for Anglo Coal, De Beers, Tongaat-Hulett and Scaw Metals, he noted.
“We have also been instrumental in creating, out of the former Kumba Resources, the largest black-controlled mining company in South Africa — Exxaro. We are also anticipating progress with BEE transactions within the platinum business,” he said.
“Anglo has also been pro-active in seeking out empowered suppliers, so that last year some 26% of our South African procurement was from black-owned or -managed enterprises.
“We have been making encouraging progress in achieving a more equitable racial representation in our management ranks — although there remains more to do. We have also sought to ensure that our contribution to BEE is, as far as possible broadly-based, including through employee share-ownership schemes.”
He added: “We are committed to South Africa and remain one of the biggest investors there. Our aim is to accelerate the transformation of our business in its widest sense — not approaching these issues with a narrow compliance mindset.”
Turning to climate change, he said Anglo’s businesses are seeking to reduce carbon intensity, improve energy efficiency and participate in relevant technological developments.
“If the development needs of many of the emerging-market economies are to be realised, then coal will be an inescapable and important energy source. The challenge is for this to be made compatible with the need to reduce carbon emissions,” he said.
To this end Anglo is participating in the United States-led FutureGen project designed to develop a near-zero-emissions, coal-based electricity-generation station.
It has also formed a Clean Coal Alliance with Shell and is working with Shell on clean coal approaches at its Xiwan project in China.
“To enable such big, long-term investments to go ahead, however, it is important for governments to provide greater certainty about the future public policy framework, so that we have a better idea of the balance between market mechanisms and regulation in strategies to reduce carbon,” he said. — I-Net Bridge