Anglo Platinum Ltd., whose earnings
slumped 79 percent last year, appointed parent Anglo American
Plc’s Chief Executive Officer Cynthia Carroll as chairman to
replace Fred Phaswana as of Aug. 31.
“She’s strengthening her grip there to maximize profits,”
Louis Venter, a fund manager at Anglorand Securities, said by
phone from Johannesburg. Platinum is one of the “stars in the
future of the Anglo group,” he said.
Anglo Platinum, which produces more than a third of the
world’s output of the metal, is recovering from the impact of a
recession which reduced platinum prices by half. The company cut
more than 10,000 jobs, idled mines and held a rights offer to
stem increased borrowings last year.
The platinum business is Anglo American’s largest operation
by assets, accounting for 31 percent of the total last year.
Anglo Platinum’s net income for the 12 months through December
dropped to 3.01 billion rand ($389 million) from 14.2 billion
rand a year earlier.
Carroll’s appointment signifies a desire to “take a more
direct role” in the platinum unit, said Simon Hudson Peacock,
head of specialist equities at Cadiz Asset Management, by phone
from Cape Town. It’s “unusual” to appoint the CEO of a parent
company as chairman of one of its units and may be of concern to
minority shareholders, he said.
The appointment meets South African corporate governance
requirements outlined in the King Code of Governance Principles,
Anglo Platinum CEO Neville Nicolau said by phone from Cape Town.
Buying Out Minorities
Valli Moosa, former chairman of South African power utility
Eskom Holdings Ltd., was today appointed as independent non-
executive deputy chairman of the platinum miner.
“I can hardly think of an occasion where the interests of
the minority are different to the interests of the majority,”
Nicolau said.
While it doesn’t “make sense” for Anglo Platinum to have
minority shareholders, the South African government may be
unhappy if the company is delisted, said Anglorand’s Venter.
Anglorand is a minority shareholder in Anglo Platinum, he said.
Buying out minority investors “always remains an option,
but we have no current plan to do that,” Carroll said by phone
from Cape Town today.
Anglo Platinum, about 80 percent-owned by Anglo American,
produces almost all of its metal in South Africa, where the
government is increasing requirements for black representation
at the board and management levels.
Segregation Policy
With five of Anglo Platinum’s 11 board members being people
who were disadvantaged under apartheid, the company now exceeds
government requirements, Nicolau said.
South Africa’s government and the mining industry last week
signed a declaration that stipulates that 40 percent of company
board members should be people who were discriminated against
during apartheid, the segregation policy that ended in 1994.
Anglo American has made “excellent progress” with its
sale of non-core assets, Carroll said today. While the company
hasn’t issued a timeframe for the planned disposal of assets
ranging from zinc to steel, the company is “ahead of schedule
from our perspective,” she said.
Anglo entered into a conditional agreement with a group
including Korea Electric Power Corp, Posco and Cockatoo Coal
Ltd. to sell its interests in five undeveloped coal deposits in
Australia for A$580 million ($487 million) in cash, Anglo said
in a separate statement today.
In May, Anglo agreed to sell its African zinc operations to
Vedanta Resources Plc for $1.34 billion. The company said on
Oct. 22 that it also plans to sell its Scaw Metals, Copebras and
Catalao units.
To contact the reporter on this story:
Carli Lourens in Johannesburg at
clourens@bloomberg.net
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