By Bhargav Acharya and Lehlohonolo Lehana.
South Africa views BHP Group’s proposed bid for Anglo American as “normal market activity” and is following the process as it unfolds, President Cyril Ramaphosa’s spokesperson said on Monday.
BHP is considering making an improved offer for Anglo American after its $39 billion initial proposal was rejected by the London-listed miner, a source told Reuters last week.
“It is still early days in terms of the proposal that BHP has submitted to Anglo,” spokesperson Vincent Magwenya told a media briefing.
“We will follow like everybody else the process as it unfolds. We don’t as a country go out of our way to block market activity,” Magwenya added.
BHP has until May 22 to make a binding bid. A deal, if successful, would create the world’s biggest miner of copper, a metal central to the clean energy shift.
A condition of the miner’s proposal is that Anglo first distributes to shareholders its stakes in Anglo American Platinum (Amplats) and Kumba Iron Ore, both of which operate in South Africa.
Any exit by Anglo – founded in South Africa in 1917 – would be an economic blow to the country, whose miners have been cutting jobs and investment in response to weakening metals prices and a slew of local challenges exacerbated by the state port and freight rail company.
BHP’s bid comes weeks before a general election in which voter anger about a stagnant economy and high unemployment could cost the long-governing African National Congress (ANC) its majority.
Meanwhile the Democratic Alliance (DA) says BHP bid to spin off Anglo America’s South African assets as part of a takeover proposal shows how the economic policies of the ruling ANC have undermined investor confidence in the country.
“You cannot force a business to do business with you or stay in your country or in your jurisdiction,” Dion George, shadow minister of finance for the Democratic Alliance, said at a briefing in Johannesburg on Friday. “This a very sorry indictment of what we have under the ANC government’s failed and misguided economic policy.”
Magwenya pointed towards the success of the SA Investment Conference which, over five years, reached R1.5 trillion in investment pledges as an indicator of investment appetite in South Africa.
“Ramaphosa also finds it satisfying that both domestic and international investors continue to demonstrate confidence towards South Africa through their continued investments as evidenced in the last few years and in exceeding the investment targets set at the beginning of the term.Ramaphosa is confident that the rebuilt capacity of the state remains firm and focused on responding to crime and corruption.
“The Presidency would implore the investor community to note the optimism expressed by the business community in various publications and platform on the progress achieved across the three focal areas. This should reassure investors that momentum is building and will be maintained to reduce crime and corruption, continue improving energy supply and resolve logistic backlogs,” Magwenya said.