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Financial Mail Page 1 -05/09/17 10:06:02 AM Financial Mail Page 2 -05/09/17 10:06:16 AM Financial Mail Page 3 -05/09/17 10:10:55 AM anglo corporate report american OVERVIEW A pioneer of change in the business world Post-democracy in SA, the control. Its influence stretches company embarked on huge beyond mining to touch nearly contents change to refocus on its core every part of South Africans’ l iv e s , expertise of mining from their shopping at OK super- markets, Edgars or CNA, to the fer- 3 Pioneer of change tilisers used by farmers or their 4-6 In it for the long haul ý Imagine, for a moment, down- pension investments, with Anglo 7 A journey through 100 town Johannesburg in June 1986. American companies’ shares yea rs The Carlton Centre and the accounting for half the dealings on 8 Leading the fight against neighbouring Carlton Hotel are the Johannesburg Stock Exchange. H I V/A i d s abuzz with well-heeled shoppers Writing in South Africa Inc. The 10 Boosting small businesses and visitors, business conversa- Oppenheimer Empire, David Pallis- 11 Allure of the new tions are dominated by talk of ter, Sarah Stewart and Ian Lepper millennials heightened sanctions against the try to explain the scale of Anglo 12 A new approach to mining apartheid government. American by using employees as a 14 Forever and beyond Around the country, the United b e nc h m a r k . Democratic Front campaigns for According to its 1986 estimates: “p e o p le’s power”. On June 12, gov- ● Anglo American employed about ernment declares another national 305,000 people in the gold mines; state of emergency. ● 25,000 in diamond mines; A few blocks down the road Sir Ernest Oppenheimer, founder of Anglo ● 100,000 in other mines — from the Anglo American-owned A m e r i ca n notably platinum and coal; Carlton Centre sits 44 Main Street, ● 150,000 in manufacturing; the head office of Anglo American, ● 140,000 in the food, beverage which was founded in 1917 by Restricted by sanctions and and retail industry; and Ernest Oppenheimer, to invest in exchange controls, Anglo American ● 50,000 in other businesses. the country’s gold minerals. has used its financial muscle over Fast-forward to 2017, the the years to expand its operations streamlined Anglo American, What it means: inside SA, and by 1986, it is by far though employing 87,000 people A century of innovation and the biggest and most influential today, is still a leader in SA’s busi- pioneering trends that continue company in the country with more ness sector. to sustain and grow the industry than 600 companies under its Years of change followed the fall Thursday September 7 2017 3 Financial Mail Page 4 -05/09/17 10:11:11 AM corporate report anglo american of apartheid to refocus the business 1917 to diamond trading during the on its core expertise of mining. Great Depression in the 1930s, we The Oppenheimers’ mo r e have often made tough choices and enlightened world view was persevered and adapted in the face demonstrated by Anglo American’s of enormous change around us.” strategies in the 1980s and early Anglo American may no longer 1990s around the empowerment of be the “dynamo of the SA econ- black entrepreneurs, granting o my ”, as it was described in So u t h workplace recognition to the Africa Inc. The Oppenheimer National Union of Mineworkers, Em p i r e , but many of the companies and a progressive workplace pol- historically in its stable remain icy programme to test and treat well-known names today, includ- HIV/Aids, long before legislation ing SA Breweries (now owned by required action on these fronts. AB InBev), Tongaat Hulett, Mondi Anglo American chief executive and Gold Fields. Mark Cutifani often speaks about Anglo American’s restructuring the need for mining companies to and empowerment efforts have keep striving for improvement and also led to the birth of a number of progress in a fast-changing world. new companies on the JSE, includ- “The common characteristic ing Exxaro Resources, African that resilient companies have is a Rainbow Minerals and Royal Bafo- relentless focus on innovation, keng Platinum. matched with a firm commitment Today, the Oppenheimers own Continuing the legacy: Harry Oppenheimer in his study to sustainability while investing less than 0.5% of Anglo American, with the future in mind, and there hasn’t been a family rep- even during tough resentative on the board since TRANSFORMATION t i me s ,” he told dele- Nicky Oppenheimer, Ernest’s gates at the Mining grandson, stepped down in 2011. Indaba in Cape Yet the philosophy for Anglo Town earlier this American, as established by In it for the year. “From estab- Ernest Oppenheimer in 1954, lishing the company in remains the same today. “Th e aims of this group are — long haul and will remain — to Anglo make profits for American chief our shareholders, A century later, a streamlined Anglo American believes SA still executive Mark but to do so in offers much opportunity for further growth and investment Cu t i fa n i such a way as to make a real and lasting contribu- ý One wonders what went strikes of 1920 and 1922 — b et t e r tion to the com- through Ernest Oppenheimer’s than some others, he wrote. One of munities in which mind as he went to the UK and US the struggling mining companies we operate,” s ay s during World War 1 to raise capital was De Beers, and with the sup- Cutifani x for a new mining investment com- port of foreign backers, Anglo pany in SA, an exploration hotspot American was able to acquire at the time following the discovery effective control of the diamond of diamonds and gold in the latter miner at the start of the Depression half of the 1800s. in 1929. A diamond trader by profession, The acquisition of De Beers was Oppenheimer, the scion of a rel- one of the early examples of atively wealthy German merchant Op p e n he i me r ’s genius when it family, already owned some gold came to spotting — and success- and coal properties, but — mu c h fully exploiting — opportunities, in like SA’s mining companies today – good times and bad. Using the needed offshore capital to develop financial muscle afforded to it by these resources. its mining operations, Anglo Amer- From the start, Anglo American ican invested in SA’s booming was a profitable venture, Duncan manufacturing sector in the 1930s; Innes wrote in his 1984 book the new gold fields on the West An g l o . Its rich mines allowed it to Rand and in the then Orange Free Where it all began: 44 Main Street, original head office of Anglo American ride out problems — including the State in the 1950s; and the rapidly 4 Thursday September 7 2017 Financial Mail Page 5 -05/09/17 10:11:26 AM growing industrial sector during number of joint ventures, such as the 1960s. Modikwa Platinum, a 50/50 joint At its roots, however, Anglo venture with ARM. Anglo Ameri- American remained a mining firm, can also concluded a number of and its offshore expansions, which empowerment transactions related started in the 1960s, focused large- to companies outside the mining ly on the mining sector. sector which have since been By the 1980s, Anglo American unbundled from the group, includ- was by far the biggest company in ing Tongaat Hulett, Mondi and the country, accounting for an esti- Hu l a m i n . mated 60% of the value of the JSE. As part of its latest restructur- Again, the company — by then led ing, when it streamlined its port- by Ernest’s son Harry Oppen- folio to focus on world-class, low- heimer — predicted the coming cost assets, a new series of winds of change. It became a pio- empowerment transactions are neer on many fronts, ranging from under way. The group is selling its its policies around HIV/Aids and Eskom-tied coal mines to empow- workplace recognition for trade erment group Seriti Resources, and unions to leading the way on its 85% stake in its Union platinum Support system: Anglo American also had a stake in Exxaro Resources as part of its BEE empowerment transactions and mine to black-controlled Siyanda. d ea l s supporting black entrepreneurs. In addition, Anglo American has concluded BEE transactions to the BEE pioneer value of more than R67bn over the ond mining charter, Anglo Amer- external help.” At the time, there were no BEE years, with subsequent dividends ican exceeded the target for black In order to attract investors, the regulations in place, and Anglo of more than R40bn accruing to ownership, after black sharehold- political rhetoric in the country American pioneered a number of the BEE shareholders. Ca p it a l ers acquired more than 26% of needs to be addressed. “I think the different types of transactions and growth for the BEE shareholders is Anglo American’s businesses in SA. political rhetoric is loud and very joint ventures. “We looked for estimated to be in the tens of bil- ne g at iv e . We need to think about opportunities that would be able to lions of rand. Investment climate the message we want to send to grow scale, step away and do As one of the first companies to The mining industry is often the world, and what we want to something on their own, like Royal offer shares to communities and accused of not doing enough on achieve.
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