Govt has reservations over possible Anglo merger
The government seems set to oppose a possible merger between mining giants Anglo American and Xstrata, it emerged on Tuesday.
Mining Minister Susan Shabangu told a press conference in Cape Town that the government had found out about the matter via media reports and had yet to discuss it with the companies concerned.
“We haven’t discussed that with the companies. We intend to call them to come and tell us exactly what does it mean,” she said.
“But, I must just indicate up front, as a country, and as this government, as we try to create more opportunities within the industry itself, we can’t go back to monopolies.
“We can’t go back to a situation where a few companies control commodities in South Africa.
“That’s unhealthy, that’s uncompetitive, and in terms of global standards and principles, it’s just unacceptable.
“So we cannot go back. We will call them, for them to come to explain themselves, what is it that they are trying to achieve, because if you really go into Anglo and Xstrata and their involvement in South Africa, it’s a big concern for us.
“But, definitely, monopolies cannot be promoted again in South Africa,” Shabangu said.
Earlier on Tuesday, Business Day reported that Anglo American on Monday rejected the rival mining group’s “merger of equals” proposal, knocking a no-premium marriage and a combination with what it regarded as Xstrata’s inferior mines.
The snub came a day after Xstrata unveiled its plan and after top Anglo shareholders pressed for a big premium to create a giant to compete in a consolidating mining sector.
London-based Anglo was the biggest investor in South African mining.
Xstrata was the largest operator of ferrochrome smelters in South Africa and the country’s third-largest coal exporter.
Together they controlled most of South Africa’s platinum industry.
Xstrata said on Sunday it asked Anglo for talks about a merger.
The National Union of Mineworkers, South Africa’s biggest union, said that it would probably oppose the proposed merger, citing its possible effects on jobs and competition, Business Day reported.—Sapa