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I i .,' | 1.' "j,, - £I II ..,.iIIV A.,I .,ILY NOTES I OUMENTS* NIY\( . 2 1983 Aficana February 1983 TMIE ILICATIMNS OF SANCTIONS AGAINST SOLYI AFRICA FOR THE MINING AND RELATED INDUSTRIES IN BRIMN by Steven Bundred /Rote: This paper, published at the request of the Special Oummittee against Apar id, was prepared by Mr. Steven Bundred, Peseardi Officer, Naticnal Union of Minewcrkers. The paper was submitted to the United Nations Synposium on the Role of Transnaticnal Corporations in South Africa and Namibia, held in Sheffield, United Kingdom, fram 1 to 2 November 1982. 7he views expressed are those of the author.! 83-oh3h5 No. 7/83 * All material in these notes and documents may be freely reprinted. Acknowledgement, together with a copy of the publication containing the reprint, would be appreciated.

The purpose of this presentation is to examine and comment on the trading links between the South African coal industry and companies in the United Kingdom. These links include direct trade in coal, trade in mining equirment and investment by United Kingdcm-based conpanies in South African coal production. The mining industry in South Africa is heavily dependent on the United Kingdom and other EEC countries, and the apartheid r~gime in Pretoria is heavily dependent upon the South African coal industry. For the South Africans, therefore, the implications of trade sanctions would be severe. For the United Kinadom it is probable that" any adverse economic effects of such sanctions would be offset by corresponding benefits. This statement cannot, however, be made without qualifications. On the coal production side the links between United Kingdom and South Africanbased companies are ccmplex and extensive. And efforts to untangle them quickly reveal that this investment exists in both directions. A substantial amount of South African coal production is undertaken by subsidiaries or associated companies of United Kingdom multinationals, and such companies have other interests in South African coal, gold and diamond reserves or in engineering companies. But the larqest South African coal producers also have substantial interests in United Kingom-based companies, and there is an intricate web of common directorships. Sae of the major United Kingdombased corporations with active involvement in South Africa are not, therefore, unambiguously British. To sever the links between the financial and irnOitrial establishments of these two countries would certainly weaken the r~qire in Pretoria. But it would not be an easy task. And unless it was accomplished in the context of riblic ownership of former South African assets in this country, its ultimate effects would be difficult to predict. What can be said with certainty is that the South African coal industry is expanding fast. As this e sion proceeds, coal becomes increasingly imortant to the South African r~qgime. The rapid growth of coal exports is being made to South African coal producers, and in turn South Africa is looking largely to the EEC for a market in which to sell these exorts. At present it does not hold a commanrdinq Dosition in that market, but without urgent action it will very quickly acquire one. 1. The trade in South African coal South Africa does not provide a market for coal sales to any European country, but exports of coal to Europe are extremely important to the South African coal industry. iioreover, althouqh South African coal reserves amount to less than 1 percent of the world total, it has now beccm the world's fourth largest coal trading country, and the success of its coal industry plays a key part in maintaining the apartheid r~aime in Pretoria. Since South Africa is almost totally dependent on overseas suppliers for its crude oil requirements, it has always depended on coal for ruch of its own energy needs. Thus the industry is of considerable strategic and economic ini0ortance.

-2- The coal deposits in South Africa are located in Transvaal, Orange Free State and northern Natal; 94 percent of the total output is produced by eight mining groups, with the largest two producing two-thirds of the total output. By international standards, this coal is extrewly cheap to produce, and there is no doubt that reserves are sufficient to sustain the industry and its export trade for many years. But the extent of South African coal reserves needs to be seen in a proper context. South Africa is not capable of exercising the same power through its coal industry as is provided by its gold mines. Parts of Europe have grown increasingly reliant on coal shiments from Richards Bay and from Durban, but in the long-tenn, coal consumption in the rest of the world does not depend on South Africa at all: Table 1 Economically recoverable hard coal reserves (mtce) USSR 104,000 China 99,000 SJA 107,183 Australia 25,400 Canada 1,607 Poland 27,000 Fed.Rep. of Germany 23,991 United :ingdom 45,000 S. Africa 25,290 Total coal resources (all ranks) (mtce) 5,926,000 1,465,000 3,599,657 779,900 474,412 184,000 285,300 149,500 92,511 Total resou!rces as percent of word resources percent 1980 hard coal production (mtce) Ratio of reserves to current output (a " d) years 43.5 10.8 26.4 5.7 3.5 1.4 Source: World Coal Nov/Dec 1981 Column (e) shows that at present rates of production the United Kingdom coal industry has economically recoverable coal reserves sufficient to last over 300 years. Australia and the Federal -Repblic of Germany are in similar positions and other producers are also assured of a long existence. Scuth African coal production in 1980 accounted for around 4 percent of the world total. Since the South African economy is so heavily reliant on coal for dcmestic energy needs, production prior to 1973 was largely determined by the level of demand. However, with the growth of world coal consumption that followed the Middle East oil crisis of that year, production in South Africa was stepped up to meet the needs of a rapidly growing export market. ) ) 3 ) T

-3- Table 2 South African coal balance (mtce) 1970 1975 1977 1979 Production 54.6 69.2 83.3 95.4 Demand 53.1 66.5 72.6 73.0 Exports 1.5 2.7 10.7 22.4 Source: Coal Trade Statistics (W.H. Fischer) Table 2 shows that coal output in South Africa rose by 85 percent in the decade of the 1970s in order to permit a fifteen-fold increase in exports. A further increase to 44m tonnes by 1985 and 80m tonnes by 1995 is already planned. By 1980 South African exports had risen to over 28m tonnes and accounted for more than 11 percent of the world trade in coal. This figure, however, should be treated with caution. out of a total ouput of 2,760m tonnes of coal in the world that year, only 252m tonnes or 9 percent was traded across international frontiers. Nevertheless, if we look at the destination of South African exports, it can be seen that in the European context these are very significant indeed. Some coking coal is exported to Japan and the Republic of Korea, and there are other shipnents of South African coal to these countries and to Taiwan; but over 73 percent of South African coal exports are destined for EEC countries: Table 3 Destination of South African coal exports (mtce) 1979 1980 France 8.3 8.9 Italy 2.3 3.4 Denmark 2.3 3.4 Belgium 1.9 2.1 Federal Republic 1.1 0.9 of Germany Netherlands 0.6 2.0 Taiwan 0.7 1.6 Republic of 0.6 0.9 Korea Japan 2.4 3.4 Others 2.2 1.9 22.4 28.5 Sources: Coal Trade Statistics-W.H. Fischer World Coal Nov/Dec 1981

-4- It should be noted that France which is South Africa's largest export market, is also the NCB's largest exrt market, and there can be little doubt that if South African imports to the EEC were stopped, much of these would be replaced by United Kingdmn coal. It should also be noted that exports to EEC countries are growing rapidly. In 1980 South African coal shipments to the EBC increased by 19.5 percent on the preceding year. But although the EEC is by far the most important market for South African coal exports, EEC countries are not at present dependent on South Africa for their coal supplies, thugh there are indications especially from Belgium and Italy, that long-term contracts are currently being negotiated which will rapidly lead to this: Table 4 Coal imports from South Africa as a percentage of total coal inyorts: 1980 1981 France 31 29 Italy 21 18 Dermark 32 29 Belgium 20 27 Federal Republic 15 17 of Germany Netherlands 3 1 Total EEC 21 21 Source: European Commission What emerges from this analysis is that an embargo on South African coal inorts, if it were implemented quickly, would damage South Africa but would not have a lasting effect on world coal consum:tion. Instead, it would lead to an increased demand for coal from EEC countries which could easily be met by those countries which have substantial coal reserves and are already supplying the EEC market, such as the United Kingdom, the Federal Republic of Germany, the USA, Australia and Poland. For the United Kingdom coal industry specifically, the effect of economic sanctions would be to increase sales to existing export markets and secure enployment in the British mining industry. So far, I have not discussed direct trade in coal between South Africa and the United Kingdom itself. In total, this trade is negligible; but it, nevertheless, exists and has been growing in recent years: Table 5 UK coal imports from South Africa (thousand tonnes) 1976 17 1977 11 1978 26 1979 38 1980 66 1981 81 Source: Department of Energy

-5- The 1981 digest of United Kingdom energy statistics reveals that all 66,000 tonnes imported fra South Africa in 1980 were anthracite. Due to industrial action last year in the Customs and Excise Department, complete statistics for 1981 are not yet available; but it is likely that this is also true of the 81,000 tonnes imported in that year. This is unlike the position in the rest of the EEC where most of the South African imports are of steam coal for power stations. These shipments formed part of a total of 321,000 tonnes of anthracite inported into the United Kingdom in 1980, the rest coming from the United States of America, the Union of Soviet Socialist Republics, Morocco and EBC countries. Total coal imports in 1980 were 7.3m tonnes. At present, they are lower, and so the proportion coming from South Africa is rising even more rapidly than the total amount. The averaqe value of South African imports in 1980 was £40 per tonne. The total consumption of all coal in the United Kingdom that year was 123m tones and of anthracite and dry steam coal alone 2.5m tonnes. Thus, the Suth African imports were a tiny proportion of total coal used, but they represented around 3 percent of anthracite consumption and more than 20 percent of anthracite imports. One hundred fifteen thousand tonnes of anthracite were used in the electricity supply industry in 1980, and 319,000 tonnes were sold to industrial consumers; but most of the remainder went to a variety of coal merchants for sale to the domestic market. It is not, therefore, possible to specify which individual merchants or companies were responsible for the imports from Suth Africa. (Co- operative societies and the NCB together account for only 20 percent of the retail trade in coal and solid fuel. The rest is in the hands of some 200 medium-sized firms and 7,600 mainly small traders). Anthracite imports entered the United Kingdom in 1980 through a total of 28 different ports.But 70 percent of imports came through the five norts of London (includinr Tilbury), Scunthorpe, Avonamth, Liverpool and Crange, muth. The Medway Ports (including Rochester), Sunderland and Belfast were also principal ports of landing, and there were substantial quantities landed at Colchester Shoreham, Boston, Great Yarmouth and Sharpness. Before turning from the discussion of present trade in coal with South Africa to an examination of what the consequences might be of ending this trade, some important qualifications should be made to these statistics. Firstly, it is not unequivocally true that all the United Kingdom trade is in anthracite. Scme stean coal has been imported in small quantities in the past and could no doubt be again in the future. Secondly, and here the qualification must itself be qualified, it is possibl& that additional shipments have arrived from South Africa without being recorded as such in official statistics. There is a growing spot market in coal based in the Netherlands, and some United Kingdom imports come through this source. Where the coal was simply transhipped at Amterdam or Rotterdam for import to the United Kingdom it would,of course, be labelled with its Country of origin. Where there was blending before shiptent, however, this would not be possible. By the very nature of the problem it is difficult to quantify the extent of South African coal imports which may slip in through this route, but evidence suggests at least that the problem does exist, and there is evidence also that some imports of manufactured smokeless fuels, especially from the Federal Republic of Germany, may be based on South African coal.

-6- If it is, nevertheless, accepted that the small quantity of coal shipped by South Africa to the united Kingdom ould easily be replaced from other sources, and that the United Kingdon and other countries could easily meet the needs of European consumers currently buying coal from South Africa then the question arises of what the economic effects might be of an embargo on South African coal. Ignoring for a moment the fact that some South African coal is mined bv ca tpanies based in the United Kinadom - a matter we shall return to later - it is clear that countries presently imnorting coal from South Africa might face an increase in their coal costs while there would be advantageous economic effects for those other coal-producing countries which witnessed an increase in export demand. From the United Kingdom point of view alone, such a ban on imports would be clearly beneficial. At current levels of output per man-year, the 81,000 tonnes of anthracite innorted into Britain in 1981 was equivalent to around 164 mining jobs. If the effect of these imports was to put that number of British miners out of work, then the cost to the United Kingdom Government in the first year of unemployment, based on figures given in Hansard on 8 June 1982, is around £I,2mi or almost £15 per tonne of coal imported. This, of course, is substantially less than the gap of £5 - £8 per tonne in the delivered price of NCB and South African coals. And if the NCB were to capture only a quarter of the coal market in the EEC which is currently held by South Africa, the effect might be an additional 10,000 mining jobs in the United Kingdom and an extra £175m per annum in revenue to the British coal industry. For other EEC consumers the same general arguments can no doubt be applied, and even in the case of non-coal-producing countries, the suggestion that a trade embargo would damage consumers relies on the assumption, which is a dubious one, that alternative sources of supply at equivalent prices could not be found. Moreover, it has been frequently argued in the United Kingdom context, and this argument which is based on experience applies elsewhere also, that any price advantage accruinq from coal inorts is illusory and will soon disappear when consumers become dependent on im~orted supplies, especially if they are from a single source. There was more than one lesson for the coal industry in the success of the OPEC oil cartel in the early 1970s. For South Africa, however, the loss of its major coal export market would be a devastating blow. Revenue earned from coal sales in 1980 totalled $1.4 billion, placing coal second only to gold as the country's single most important revenue earner. Exports earned $647m, and recently announced increases in export quotas are intended to more than double that figure before the end of the decade. To achieve this, substantial investment in new mines and harbour facilities has already been undertaken. Thirteen new mines have been opened or are under construction, and export quotas have been awarded for a period of 30 years ahead. Thus South Africa is rapidly on its way to becoming the world's largest coal exporter; and unless international action is taken at an early stage, especially in the ?EC, it may soon be too late to prevent this. 2. Mining equipmepnt There is, however, another side to the South African coal trade. Although the EEC imcorts the bulk of South Africa's overseas coal sales, EEC countries, and esoecially the United -ingdom, also ex.poort to South 1frica a substantial amount

-7- of the mining machinery with which this coal is produced. moreover, as the NCB, which is, of course, the major customer for United Kingdom manufacturers of mining equipment, has been forced to cut back on its purchases for financial reasons, considerable effort has been devoted to expanding export sales. In 1978 the Association of British Mining Equiuent Exporters (ABMEX) combined with the Council of Underground Mining Machinery Manufacturers (CuMw) to form the Association of British Mining Equipment Ccmanies (ABMC)). It brought together 81 companies representing a wide range of British mining manufacturing interests. They included the largest companies such as Dowty, Guillick Dobson, Anderson Strathclyde, Mining Supplies and Victor Products (Wallsend). The new association, ABMEY, then became a member of British Coal International, the NCB-headed organization formed in 1977 to market United Kingdom expertise in coal mining, utilization and sales. The principal manufacturers of mining equipment have sales totalling around £1 billion a year, mostly to the NCB' but in 1980, Members of British Coal International (BCI) sold £129m worth of mining equipment on export markets. Thirtyone million £ worth of this went to North America, £14m to Western Europe and £32m to South-East Asia where export sales to China have been particularly strong. But £lm worth of equipment was also sold to South Africa, almost double the level of two years ago: Table 6 United Kingdam mining machinery exports £m 1978 1979 1980 USA 11.7 11.1 24.0 China - 95.7 26.5 South Africa 5.5 7.4 9.8 Canada 8.0 6.3 6.9 Australia 4.4 5.4 6.2 Belgium/Ixembirg - 4.3 4.2 Egypt - 1.4 3.6 France 3.8 4.5 3.5 Mexico 1.9 2.6 3.4 India - 2.6 3.3 Federal Republic 3.0 3.1 3.2 of Germany Spain 3.4 2.6 3.0 Sauda Arabia 2.0 - 2.8 Ghana - 2.2 Republic of Korea - 1.8 Venezuela - 1.6 Argentina 3.4 1.4 Nigeria 2.2 A Brazil 1.6 -Iran 4.3 -Philippines 5.7 - Algeria 2.4 2.9 TOTAL 63.3 152.9 104.4 Source : N.E.D.O.

-8- The market is an expanding one in which United Kingdan companies are particularly well equipped to cumpete. In 1980 only 5 percent of South African coal was mined, using longwall methods; and in the three preceding years only 8 lonqwall installations were purchased by the South African coal industry. But by 1985 it is intended to raise the proportion of longwall faces to 25 percent. Total South African expenditure on mining projects and, equipent over the period 1980/85 is expected to be £10,000 million, of which £3,600 million is earmarked for coal. Imports of equipment and spares to support this programve have been estimated by the NEDO Sector Working Party on Mining Equipment at £2,800 million, of which half could be accounted for by coal. (It is interesting to note that despite the more extensive trade in coal which exists between South Africa and other EEC countries, it is the United Kingdom which is by far the largest exporter of mining equipment. The coal industry of the Federal Republic of Germany, for example, is roughly the same size of that of the United Kingdum, but exports almost twice the amount of mining machinery. Yet in the period 19781980, FRG exhorts to South Africa totalled only £6.6 million, and in 1980 there were none at all). That investment in South African coal is expanding fast is freely admitted by the Minerals Bureau of Johannesburg. According to the Bureau, domestic consumption is expected to rise by the end of the century from the present level of around 82 million tonnes to a total of 250 million tonnes when exports will exceed 80 million tonnes. Thus, it is intended to almost triple production from last year's figure of 131 million tonnes to around 340 million tonnes by the year 2000, and the investment in new mines required to meet this level of production is already well under way. _More than 100 million tonnes of new coal capacity will come into production before the end of this decade from schemes that are currently under development.

-9- New mine prospects under developmient in South Africa ploliction m tonnes per anumm Investment costs em Start of oroduction Anglo-American Anglo-Aerican Anglo-American Anglo-Arerican General Mining General Mining General Mining General Mining General Mining Coal Coal Coal Coal and Finance and Finance and Finance and Finance and Finance Rand Mines Rand Mines B.P. Sasol New Vaal New Dermark Goedehoop Kleinkopje Optiim Matla Ermelo KWA Ngoma Hlobane Khutala Duvha Middleburg Bosjesspruit Source: World Coal and Minerals Bureau of Joharmesburg. Table 7 CanRany 188 181 120 N/A 60 28 131 N/A 67 146 112 136 280 11 10 3.5 2 1 12 10 4.25 27.5 1985 1985 1983 1983 1983 1983 1983 1982 1985 1987 1984 1984 1983

- 10 - It is not surprising, therefore, that most of the British companies which export mining equipment to South Africa have also now established South African-based subsidiaries. Mining supplies, for example, which saw its profits leap from £551,000 to £2.4 million in 1980 after a £6 million order from SASOL for a power loader and conveyer, which is currently being tested by the NCB,owns Laurence Scott and Electromotors (South Africa) Ltd, while the mining supplies subsidiary, Trollope and Sons (Holdings) Ltd, also owns the South African Longwall Mining Corporation (Pty) Ltd. The Dawty Group, which manufactures hydraulic roof supports has a subsidiary, Dowty (South Africa) Ltd, making mining equipment and railway wagon control systems. Dobson Park Industries, which also manufactures roof supports, has two South African subsidiaries. One of these, Wolf Power Tools (Pty), is not specifically a mining company, but the other, Gullick D and D, very definitely is. Dobson Park owns 50 percent of its South African Gullick Dobson subsidiary which is resnonsible for the sale and service of equipmnt to coal and gold mining companies. Its 1981 accounts record that: "In South Africa, our installations are performing well. After several years of intensive develorment work, a complete nechanized system has been designed with the South African Chamber of Mines. This has been manufactured and installed underground, and we are hopeful that further orders will follow this breakthrough into a new mining system." Victor Products (Wallsend) is another mining equigxent manufacturer doing substantial business with the NCB which also has a South African-based subsidiary, and so, too, is Anderson Strathclyde, which manufactures coal cutting machinery, loading and conveyer systems and picks. Between them, the carpanies so far nentioned conduct several £ million worth of business annually with the NCB. Anderson Strathclyde is currently the subject of Monopolies Comission inquiry into a takeover bid by the United Kingdom-based nultinational Charter Consolidated, which already owns a minority interest in it. Its wholly-owned subsidiary, Anderson Mavor (South Africa) Ltd, which is based in Germiston in the Transvaal, emoloys 250 workers, of whom 140 are white. The company reports that: ...... a tactful and gradual approach to desegregation commanding the sunort of emolovees of all races is most likely to succeed. Throughout the factory, blacks and whites work alongside each other in identical working conditions. Separate amenities are provided for blacks, coloured and whites". Yet another ccnpany associated with the National Coal Board, which has substantial interests in South Africa, is Babcock International. This has a third share with BP and the i\TC in Coal Processing Consultants Ltd. and owns Babcock Africa Ltd., which is registered in Johannesburq and which in turn has no less than five wholly-owned subsidiaries also registered in South Africa. Among them, these Babcock companies emrloy 3,800 South African workers, of whom 2,000 are black.

- 11 - 3. Investment in coal production Mention of BP brings us to the third important link between the United Kingdom and the South African coal industry. For BP is now one of the world's largest coal-producing companies, and much of its coal mining investment is located in the Republic of South Africa. Table 7 reminds us that this investment is still continuing but disguises the scale of involveent. Three of the world's largest oil companies, Shell, Total and BP among them account for 40 percent of South African steam coal exports. Of these BP is a British conpany which was until recently 70 percent owned by the Governmnt. Shell is also 40 percent owned in the United Kingdom. The South African coal industry is highly centralized. In 1980 there were only 78 deeD-mines and 14 opencast mines. Two-thirds of the total had an annual output in excess of 1 million tonmes, and almost the entire industry was owned by only 8 companies. The Anglo-American Corporation of South Africa, through its subsidiary Amcoal, and General Mining, through its subsidiaries, together accounted for two-thirds of total output. There are four other companies, each of which controls about four collieries. They are Rand Mines, SASOL, Duiker Exploration, and Johannesburg Consolidated Investment Company. Of these, Duiker is a subsidiary of the British iultinational Lonrho. Rand Mines is a subsidiary of the Rand London Corporation, which in turn is owned by Burnett and Hallamshire, a major international opencast coal operator based here in Sheffield, receiving a substantial amount of business from the NCB. Other South African coal mining conpanies, apart from the multinational oil corporations already mentioned, include RZ and Goldfields of South Africa. In the export quotas which have been fixed by the South African Government for 1985, it is again the multinational companies which appear to have cone off best. Table 8 Export quotas for 1985 General Mining 6.0 m tonnes BP 5.5 m tonnes Total 2.5 m tonnes Shell 5.5 m tonnes Rand Mines 2.5 m tonnes Amcoal 6.0 m tonnes Natal Associated Collieries 2.0 m tonnes Transvaal Coal Owners Association 10.0 m tonmes Anthracite Producers 4.0 m tonnes 44.0 m Source : SACTU

- 12 - The reason is not hard to find. In accouncing the new quotas in 1979, the South African Minister for Economic Affairs declared that they had been granted to oil comanies "subject to the condition that they continue to fulfill their obligation in supplying liquid petroleum fuels to the country". It was by accepting such conditions that Shell was able to become in 1979 the world's largest coal trader. Burnett and Hallamshire provides a classic example of the way in which the apartheid r~gime in South Affica is bolstered with British capital. Until recently it was a small family company with 250 employees. But since 1976 it has been the fastest growing ccmpany in Britain and now eploys a staff of 5,200. Over that period its turnover has increased fivefold and its pre-tax profits sevenfold. Last year its profits rose by 75 percent to £22m. Its return on capital employed over the past five years has ranged between 28 and 35 percent. Threugh its subsidiary ccoany, Northern Strip Mining, Burnett and Hallamshire has for sometime been the largest contractor to the NCB for opencast mining in the United Kingdom, accounting for about 2m tonnes of opencast coal production per year. But in 1979, it began to expand its interest overseas. The acquisition of Mincorp (the Mining Investment Corporation based in the Channel Isles) at that time gave it an initial stake in Rand London. But in 1981, Burnett and Hallamshire bought two further companies, one based in the Netherlands called Anglo International Mining, and one based in London called Brint Investments, thus giving it a 51 percent controlling interest in the Rand London Corporation, the parent company for Rand Mines. As a result, the Sheffield-based ccmpany now has 20 percent of its total assets located in South Africa. It owns 640m tonnes of Suth African coking coal and anthracite reserves, and also has access to gold and diamond interests. In order to exploit these reserves on the European market, the ccmrany is currently in the process of developing bulk handling facilities in Ghent which will be ready next year and which will be able to unload 1,000 tonnes of coal an hour. Despite a turnover in excess of £190m, the name Burnett and Hallanishire is not well known in this country. The smokeless fuel manufacturer, Rexco, however, which is a household name, is another of the companies that Burnett and Hallamshire now owns. So, too, is the Seaham Harbour Dock Company, in which B and H has a 79 percent stake. Burnett and Hallamshire's latest annual report makes reference to the "further establishment of major international projects in the Philippines, Colombia, Chile and South Africa, all of which augurs well for the future". The nature of the r~gimes in each of those countries provides a clear pointer to the source of the conpany's recent success. Yet the investment has not all been one way. The largest South African coal producer is the Anglo-American Corporation. This is a subsidiary of the Anglo- American Corporation which is run by one of the world's richest men, Harry Oppenheimer. Among the Anglo-Anerican Corporation's other interests are a 31 percent stake in De Beers Consolidated Mines Ltd., of which Harry Oppenheimer is also Chairman, a 40 percent stake in the Johannesburg Consolidated Investment Company, 539,000 shares worth R33m (Rl = £0.50) in Goldfields of South Africa, 63m shares worth £19m in SASOL, and 5.2m shares worth £89rm in the General Mining Union Corporation. Thus, directly or indirectly, the Anglo- American Corporation owns a large proportion of South Africa's coal, gold and diamond mining industry.

- 13 - Its interests extend also to British companies operating in South Africa. The Anglo-American Corporation owns 2.3m shares worth R12.3m in British petroleum; and in addition, it has interests in Consolidated Goldfields plc. and Charter Consolidated olc. These were acquired through the Bermudaleased Minerals and Resources Corporation, which is 42 percent owned by Anglo- American, and which in February 1981, acquired 29 percent of Consolidated Goldfields and 36 percent of Charter Consolidated. Although Consolidated Goldfields is a British-based company, Goldfields of South Africa is one of its associated ccripanies; and for Anglo-American, therefore, this was a further extension of its ownership of South African mineral deposits. The links between Anglo-American and Charter Consolidated are close. The deputy Chairman of the Anglo-American Corporation, G.W.H. Relly, is on the board of Charter Consolidated. Sir Philip Oppenheimer is on the board of the Anglo-American Corporation as well as that of DeBeers. J.0. Thcarpson is also on the board of both Anglo-American and Charter Consolidated. Other Charter Consolidated board members are directors of various Anglo-American subsidiaries. Charter Consolidated is, nevertheless, like Consolidated Goldfields, a British- based company. Its head office is at 40 Holborn-Viaduct, which is also the registered London office for the Anglo-American Coal Corporation. From this address, it administers a network of 239 subsidiaries and associated companies. Among these are Anglo-American International (UK) Ltd., the BritishSouth African Co. (investments) Ltd., and 10 companies incorporated in South Africa itself, including Consolidated Mines Selection (Johannesburg) Ltd. Charter Consolidated also owns a 28 percent stake in Anderson Strathclyde, the mining equia ent corupany mentioned earlier, and is now bidding for outright ownership and control. This bid, which is being fiercely resisted by the Anderson Strathclyde board, has been referred to the Monopolies Coission for investigation. Thus we have already seen that Burnett and Hallamshire is a British company with major South African coal interests. So, too, is BP, while Shell has the same involvement in South Africa and is partly British-owned. We can now see that Lonrho and RrZ are other United Kinqdom ccmpanies involved in South African coal mining along with Consolidated Goldfields plc and Charter Consolidated plc. The Consolidated Goldfields interest arises from the fact that Goldfields of South Africa is an associated cnopany, and that it is 29 percent owned by Mineral and Resources Corporation, which is in turn 42 percent owned by Anglo-American. Charter Consolidated is itself an associated comoany of Anglo-American. De Beers, which is another Anglo-American associate, has substantial portfolio investment in the United Kingdom, and so does the other major South African coal producer, General Mining, through its ultimate holding company, Federal Mynbou Deperk. General Mining itself has a London office and a United Kingdom-based subsidiary, General (UK) Ltd, which has long had close links with the merchant bankers, Hambros. In short, the links between British capital and South African coal production are close and are spreading rapidly. They go beyond the examples it has been nossible to cite here in a necessarily brief account. Indeed, the netnork of subsidiaries, associated copranies, portfolio Lnvestments

- 14 and joint directorships is so comlex and extensive that a complete analysis of the ownership, finance, control and influence of South African mining interests might not be possible to compile. To sever these links would not, therefore, be an easy task. But if it were to be done, there can be no doubt that the South African r~gime would be severely weakened by it.