Personal copy; not for onward transmission Reliability is the point Noranda-Codelco hunt Rio Algom Noranda has announced a C$1.5 billion cash on hand and credit facilities, and bid for Toronto-based Rio Algom and, Codelco from an external bridging loan if successful, will pass half of Rio of up to US$800 million. Both compa- Algom’s assets on to state-owned nies are seeking strategic benefits. For Corporacion Nacional del Cobre de the past few years, Noranda has been Chile (Codelco) at the same price. The divesting its assets to focus on mining, unsolicited bid by Noranda, which and has been looking to increase its already owns 8.9% of Rio Algom, is at exploration portfolio. Codelco, which is ht t p : / / w w w. e n s iv al - m o re t . c o m C$24.50/share – representing a 35% already the world’s largest copper pro- premium to Rio Algom’s share price of ducer, is seeking to extend its assets August 21, the day before the bid was outside Chile. Algom) and Phelps Dodge Corp. announced. Mr Kerr described the offer as “fair” (which has previously expressed an The offer is conditional on Noranda for shareholders of both Noranda and interest in Rio Algom and is keen to acquiring at least two-thirds of Rio Rio Algom. However, Rio Algom’s retain its status as the second largest Algom’s 60.6 million shares and the shares jumped by C$8 on the copper producer). company waiving its shareholder rights announcement to over C$26/share (a Not all analysts agree on the likeli- plan (which restricts the actions of hos- record high for the company), sig- hood of a higher bid. In a research note, tile bidders). nalling that the market expects a higher Tony Lesiak of HSBC sides with Mr Noranda’s chief executive, David bid to follow. Kerr, Continued on p.147 Kerr, said that Codelco had Potential rival bidders for Rio Algom approached him a month ago concern- include Billiton (which has expressed Rio Algom’s Spence copper project in northern ing a possible bid for Rio Algom, and an interest in adding copper to its port- Chile, showing the entrance to a 1,100 m decline that both companies would provide folio), Teck Corp. (which shares inter- for bulk sampling. (Photograph courtesy of Rio their own financing – Noranda from ests in several mines/projects with Rio Algom.) Inside • Kroondal triples output (p.147) • Ashton drills deep JOURNAL (p.153) • Silver price falls London, (p.156) August 25, 2000 Volume 335 No. 8597 • AuIron lists in London (p.159) Ltd in 1917. Following his education in of the group’s mines in the new Orange England, at Charterhouse and Oxford, Free State goldfield, which helped to Harry Harry Oppenheimer joined his father’s establish Anglo American as one of the company in Johannesburg in the early major mining houses and eventually as Oppenheimer 1930s. By that time, Sir Ernest had the world’s largest gold producer. also acquired a substantial interest in Harry Oppenheimer’s business career 1908 - 2000 De Beers, and had become its chair- was then joined by one in politics, with man, thus establishing the twin pillars his election as the Member of Harry Oppenheimer, former chairman of the family mining interests that Parliament for Kimberley in 1948 rep- of the Anglo American and De Beers endure to this day. resenting the opposition United Party. groups, died last Saturday at the age of Following active service in the South However, following the death of Sir 91. Harry Oppenheimer was born in African army during the Second World Ernest in 1957, Harry Oppenheimer Kimberley in 1908, son of Ernest (later War, Harry Oppenheimer became gave up his career in politics to devote Sir Ernest) Oppenheimer, who founded managing director of Anglo American himself to business (Comment, p.146). Established 1835 Anglo American Corp. of South Africa in 1945. He oversaw the development Continued on p.149 ISSN 0026-5225 http://www.mining-journal.com COMMENT Editor Roger Ellis B.Sc., C.Eng. Deputy and Finance Editor Family values Richard Morgan M.Sc., DIC, C.Eng. erhaps it is the selectivity of the The Zambian copper investment illus- Assistant Editor: Mineral Markets media, but those born into privilege trates some of the dilemmas inherent in the Andrew Thomas M.Sc., DIC Pseem generally to tend to one of two Oppenheimer philosophy. Critics may argue extremes: squandering the wealth and posi- that Anglo American is seeking to profit Assistant Editor: Industry in Action tion they inherit, or regarding these advan- from cheap labour in Zambia, just as it has Dominic Mercer M.Sc., DIC, FGS tages as carrying an inherent duty to use benefited elsewhere in Africa (and profited them wisely and constructively. Harry in the past from the unjust labour practices Production Oppenheimer (this issue, p.145) definitely required by apartheid law). This ignores the Susan Roberts fell into the latter category, continuing the realities of Africa: to pay Western wage Eileen Smith work of his father, Sir Ernest, and building rates would distort local economies, and Advertising Anglo American into South Africa’s domi- make projects uneconomic at African pro- Michael Bellenger nant mining and industrial group (where he ductivities. Frank Gordon was referred to by colleagues as ‘HFO’). Conversely, some investors, knowing Shelley Hannan HFO’s desire to serve the wider communi- Anglo American’s history, may regard the ty was evident from his time in politics, Zambian investment as an example of Marketing which was spent as a member of parliament shareholders’ returns being subordinated to Gareth Bowers for the opposition United Party. The domi- philanthropic aims. However, Anglo Carole Hoy nance of the National Party at that time American’s move to London in 1999, which Executive Director (just after the Second World War) meant HFO supported as a means of gaining that HFO had little hope of participating in access to the necessary international capi- Chris Hinde Ph.D., C.Eng. government, but his seat in parliament gave tal, has arguably increased the investment Mining Journal, published weekly, is available only as part of a him the opportunity to speak out against the disciplines within which that money can be subscription with Mining Magazine and Mining Annual Review. apartheid system of rigid racial segregation. spent. London is a more demanding investor Annual Subscription: Following the death of his father in 1957, environment than the Johannesburg that £247 (US$440) HFO opted for a full-time career in business, Anglo dominated, and this should help © Mining Journal Ltd 2000 judging that he could make a greater contri- ensure that both Sir Ernest’s aims are met. bution to the development of South Africa HFO’s opposition to the apartheid system Member of the Audit Bureau of Circulations through Anglo American and De Beers than placed him in a somewhat equivocal posi- as an opposition MP. However, he retained a tion, as a major beneficiary of South Africa’s WORLD GOLD political dimension to his business strategy, economy. He argued, quite rightly, that Paul Burton ACSM, M.Sc., MBA Helen Payne M.Sc., DIC such as the deliberate sale of General apartheid held that economy back, and that Mining to Afrikaner-owned interests in the all would benefit economically from its aboli- MINING MAGAZINE 1960s, which has been echoed by the tion. He also devoted a great deal of his own John Chadwick B.Sc. Des Clifford B.Sc. recent ‘black empowerment’ initiatives of wealth to charitable causes. In a warm trib- his successors. ute to HFO made this week, Julian Ogilvie SUPPLEMENTS/REPORTS HFO’s approach to combining his wider Thompson, chairman of Anglo American, Austin Wheeler B.Eng. ideals with running a company was best conceded that “there will always be those MINING ENVIRONMENTAL MANAGEMENT summed up by his repeated quoting of his who say he could have done more”. Tracey Khanna M.Sc., MCSM father that the aim of Anglo American is “to The choice was that faced by many others: CONSTRUCTION PUBLICATIONS make profits for its shareholders, but to do coexist with the system and try to change it Ian Clarke B.Sc. so in such a way as to make a real and per- and to ameliorate its effects, or intransigent Alan Kennedy B.Sc. manent contribution to the welfare of the opposition which may benefit those in the Mike Smith HND (Min.) countries in which it operates”. This ideal future but which may ultimately achieve RESEARCH SERVICES was pursued not just in South Africa, but nothing. The tributes from President Thabo Iris Moncrieff also in many other countries in southern Mbeki and other members of the African Editorial Consultant & Chairman Africa, later under the difficult circum- National Congress Party, which took the lat- Michael West B.Sc., F.Eng. stances of the isolation that apartheid ter course, have been more generous than Managing Director & Publisher brought to South Africa. HFO just lived to protocol demanded, suggesting that HFO Lawrence Williams B.Sc., C.Eng. see Anglo American return to Zambia earlier chose his own role wisely. They also demon- this year, where his father had first invested strate the political maturity of the modern in the 1920s. South Africa that he helped to create. MJ LEADING INDICATORS THE MINING JOURNAL LTD Change High- 52-week Change High- 52-week 60 Worship Street on week Low Max/Min on week Low Max/Min Share Indices Aug 23 (%) (%) HSBC Indices Aug 23 (%) (%) London EC2A 2HD FT 30 3,695 –0.7 31 4,087-3,521 (100 on 31/12/88 except*†) Tel: +44 (0)20 7216 6060 US Dow Jones 11,145 1.2 76 11,551-9,857 Global Mining 123 0.5 37 146-109 FTSE Gold Mines 732 –5.6