(Provided by Anglo American)
- Mr Cosatu said BHP's proposed takeover of Anglo American was not in South Africa's national interest.
- South African shareholders hold approximately 26% of Anglo shares, with Public Investment Corporation holding 8.4%.
- Anglo rejected the original bid, but BHP is expected to make an improved offer.
- For more financial news, visit: News24 Business Top Page.
South Africa's largest trade union federation has called on local shareholders, including the powerful Public Investment Corporation (PIC), to oppose BHP Group's planned takeover of Anglo American.
The Congress of South African Trade Unions (Cosatu), of which the National Union of Mineworkers is also a member, said the deal was not in the national interest. South African shareholders own about 26% of Anglo shares, while PIC holds 8.4%, according to data compiled by Bloomberg.
BHP's proposed takeover of Anglo on April 25 drew the ire of some members of the South African government, including Mining Minister Gwede Mantashe. The Australian company responded by sending a senior team, including its chief executive, to South Africa to gain support from government officials, regulators and local Anglo shareholders.
BHP's proposals include plans to spin off its Johannesburg-listed platinum and iron ore divisions, before Anglo eventually acquires the remaining assets. Founded in Johannesburg in 1917, Anglo also owns manganese and diamond mines in South Africa. The mining company was a cornerstone of South Africa's economy for decades, but moved its headquarters to London in the late 1990s.
According to a report by Bloomberg, Anglo rejected the initial bid, but BHP is expected to make an improved offer. PIC, which manages pensions for civil servants, said it would evaluate any proposal from BHP.
“Cosatu is deeply concerned about the potential sale of Anglo assets in South Africa to BHP,” the trade union federation said in comments sent to Bloomberg on Tuesday. “It is important that South African shareholders, including the PIC, ensure that these assets remain South African owned.”
BHP said that under its proposals, Anglo's controlling interest in Kumba Iron Ore and Anglo American Platinum would be distributed to its investors. This would give Anglo shareholders direct access to the dividends and future value of these companies, while also allowing them to adjust their exposure to those businesses.
Cosatu is a key ally of South Africa's ruling ANC, and President Cyril Ramaphosa was a co-founder of the National Union of Mineworkers. BHP's bid comes ahead of national elections later this month, which could see the ANC lose its majority for the first time since coming to power in 1994.
The Office of the President rejected the premise that BHP's approach was a vote of no confidence in South Africa. It comes after opposition parties presented the bid as a scathing rebuke of the government's handling of the country's economy, which has one of the world's highest unemployment rates and aging infrastructure.
“These companies were founded with the support of South African miners and pension funds,” Cosatu said. “The profits they generate are necessary to grow the economy and create decent jobs.”
BHP is targeting Anglo for copper mines in South America, which would make it the world's biggest producer of the key metal.
Anglo's South African operations have been hit by uneasy industrial relations, power outages and a failing state-owned freight rail company. The company's Kumba division has had to stockpile steel-making raw materials due to a lack of trains to transport them to the port.
