Forbidden South African Gold

Mining giant Anglo American is pressured to make South Africa a less-dominant part of its operating portfolio.

The fact that internationalisation is proceeding slower than first hoped has led to a discount on its shares, compared to those of its peers.

South African mining and other operations contributed 51% and 23% respectively during the first half of 2001, with 26% being accounted for by operations in the rest of the world. However, the rest of the world's contribution to headline earnings for the first half of 2002 increased to 46%, while the share of mining and other operations in South Africa dropped to 40% and 14% respectively.

$1,9-billion-worth of assets acquired during the six months are split equally between South Africa and the rest of the world.

The major acquisitions in South Africa included $530-million-worth of additional shares in Anglo Platinum; stakes in Kumba Resources and Anglovaal Mining, worth a total of $365-million; and an additional stake in Gold Fields, for $205-million.

Outside South Africa, the group acquired Russian pulp and paper company Syktyvkar, for $252-million; French corrugated-packaging group La Rochette, for $110-million; as well as ferrous-metals and industrial-minerals businesses in Chile, the UK and Spain.

With joint-venture partners, it acquired coal interests in Australia and Colombia.

Anglo's 50:50 objective regarding operations in South Africa and the rest of the world were outlined on a number of occasions when earnings in South Africa were still higher than 65%.

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