Friday, July 18, 2008

(TALKZIMBABWE) Anglo American staying in Zim despite E.U. sanctions

Anglo American staying in Zim despite E.U. sanctions
Tendai Nyatanga
Fri, 18 Jul 2008 09:55:00 +0000

Anglo American Chief executive, Cynthia Carroll, was formerly president and chief executive officer of Alcan Primary Metal, the largest division of the Canadian aluminium producer. Carroll holds an MBA from Harvard and an MSc in Geology (Kansas). She is strongly committed to improving safety in the workplace and has a track record of working with communities in addressing sustainable development challenges.

FOLLOWING media and government pressure in the United Kingdom, Anglo American reiterated that it will stay the course in Zimbabwe and will not pull out of its US$400 million investment as metal prices continue to soar.

“Anglo American has been an investor in Zimbabwe for 60 years,” said a statement issued by the company in response to the British and E.U. calls for the business giant to move its businesses from Zimbabwe adding that it has “has a clear responsibility to protect the wellbeing of its more than 650 employees and contractors, as well as their families and all those who depend indirectly on the activity around the project.”

More than 40% of Anglo American’s assets are located in Africa including all the mining and refining operations of Anglo Platinum, the world’s number 1 platinum producer; many of Anglo Coal’s mines; and the great majority of the mines of their associate De Beers, according to Anglo American CEO Cynthia Carroll.

Britain’s Prime Minister Gordon Brown has indicated that he will ask the E.U. to seek further stringent sanctions against Zimbabwe in defiance of a U.N. Security Council vote that failed to endorse a new sanctions package for Zimbabwe.

Britain and the U.S. had drafted a sanctions draft that sought to impose an international travel ban on President Robert Mugabe and 13 members of his government and an arms embargo on the country. It was vetoed but Russia and China, long term allies of Zimbabwe arguing that talks were the only way to resolve the situation in the country.

After failing to garner support at the UN Security Council, despite previously indicationg that sanctions were certain, Brown turned to the E.U. to impose further sanctions.

David Miliband, Britain’s Foreign Secretary said the extension of E.U. sanctions against Zimbabwe, which currently target 132 individuals, would be addressed at a meeting of European foreign ministers in Brussels on July 22 and 23. Press reports say a definite sanctions package has been drafted and will be adopted at that meeting.

Anglo American has indicated that although it was monitoring the situation in Zimbabwe very closely and reviewing all options, they will not be withdrawing from the southern African country despite E.U. and American pressure to do so.

The company argues that “livelihoods would be jeopardized should the company withdraw from Zimbabwe” adding that “Anglo American is in full compliance with all relevant national and international laws relating to its activities in Zimbabwe.”

It would be difficult for the E.U. to impose penalties of the mining giant as it runs a subsidiary company registered in Zimbabwe - Anglo American Zimbabwe (Amzim) – which would not be subject to E.U. laws.

Anglo American currently runs a multi-million dollar platinum project at Unki mine in Zimbabwe employing thousands of workers. Unki has an extensive underground deposit of platinum and palladium and Anglo American is unlikely to give this up. It is situated on Zimbabwe's Great Dyke which is the world's second largest repository of platinum group metals, after the Bushveld igneous system in South Africa.

Tenders were awarded for infrastructure projects at the mine as business is going on as usual. The first phase of the $90 million exploration was completed at the end of 2006.

Anglo America’s strategic plan indicated that the mine was expected to remain in operation for twenty years, and is forecast to produce 290 million tons of ore over that time. The mine will produce 58 000 oz of platinum and 40 000 oz of palladium a year with an estimated 1,300 jobs created over the period.

The plan also shows that a black empowerment scheme will ensure that 15 per cent of the mine's shareholding will be held by 'indigenous Zimbabweans' and a scheme is also being discussed to give certain employees a five per cent stake in operations.

Anglo American also holds a 37.2% stake in Tongaat-Hulett, a sugar and starch company, which has operations in Zimbabwe employing 16,000 people.

Zimbabwe has rich deposits of natural resources, including coal, chromium, platinum-group metals, gold, nickel copper and iron ore and many companies weathering the storm are set to benefit hugely, according to a mining CEO who refused to be named.

“Those companies moving out of Zimbabwe will only have themselves to blame if things start improving in Zimbabwe. We all know that sanctions are affecting the Zimbabwean economy, but if they are lifted many companies will benefit,” said the CEO adding that “Zimbabwe has excellent “infrastructure which needs minimum maintenance.”

“May companies should bank on the possibility that the country will very soon bottom out and things will be much better,” he said. “If the country can keep assets pretty cheaply right now, it can pay off later.”

President Mugabe reacted angrily to E.U. threats of pulling out their companies out of Zimbabwe.

"The British are threatening to withdraw their companies," President Mugabe said. "We say: The sooner you do it the better. Please Mr Brown, withdraw all your companies from Zimbabwe."

Anglo American said in February that its 2007 net profit jumped 18 percent to 7.3 billion dollars, boosted by high output and soaring metals prices.

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