JOHANNESBURG (miningweekly.com) – In a clear softening of its original hard-line attitude towards Xstrata’s proposed merger of equals with Anglo American, South Africa’s Ministry of Mineral Resources has asked for greater detail on the proposal after meeting both CEOs, mineral resources departmental spokesperson Jeremy Michaels has told Mining Weekly Online.
Michaels said that both Xstrata CEO Mick Davis and Anglo CEO Cynthia Carroll had met with Mineral Resources Minister Susan Shabangu and Mineral Resources DG Sandile Nogxina, who had requested more information on the proposed deal.
The government’s current stance was one of close observation of developments.
“We are watching the Xstrata proposal very closely. We’ve asked for more detail to get the full picture of the implications,” Michaels told Mining Weekly Online.
“As we have said before, our concerns are what the impact of such a proposed merger would be on jobs and competition in particular and we will continue to engage with them about it,” Michaels added.
A government spokesperson said that, even though the Ministry had in public welcomed the appointment of Sir John Parker, there was now a keenness to get the competitive juices flowing between Xstrata and Anglo for the benefit of South Africa.
Xstrata executive GM group strategy and corporate affairs Thras Moraitis had given the country a glimse of what those competitive juices could deliver when he said that the combined entity would be able to create an institute with the capacity to graduate between 2 000 and 3 000 engineering students a year.
“We can help to create more engineers. We know that South Africa is low on the scale of engineering graduates, while the graduation of large number of engineers in emerging countries like India and China is at the core of the engine that is growing those economies, and we need to redress that in South Africa," Moraitis, himself a South African, said. Of Xstrata's nine-person executive committee, six are South African.
The Xstrata executive commented further that the merging of BHP and Billiton had resulted in the creation of the world’s leading diversified mining company and said that the merging of Anglo and Xstrata could result in the combined entity being able to go “toe-to-toe” with BHP Billiton, which had unlocked a sizeable 389% return for shareholders through merging.
Xstrata had repeatedly also given the assurance that there would be no South African retrenchments at operational level and that the deal was net positive for South Africa.