Anglo willing to sell 15% of mining assets

Anglo American, the mining giant, is prepared to sell 10 to 15 per cent of its South African mining assets to black businesses to meet the nation's aim of boosting black influence in the industry.

Reporting half-year earnings, Anglo's chief executive, Tony Trahar, criticised a recent leaked government policy paper on "black empowerment" in the mining industry. The document proposed that the black community own up to 30 per cent of the country's developed mining assets.

South Africa's ANC government is under pressure to redistribute wealth from the traditionally white-dominated sectors of the economy to the black majority. The government has said that the document was a draft plan and not official policy. Anglo has since been in talks with ministers.

"The leaked draft Mining Charter has done great damage to investor confidence in South Africa. This damage can only be repaired when a final Charter and the related Money Bill are publicly available," Mr Trahar said.

"The imperative is to achieve black economic empowerment in a way that enhances rather than undermines investment sentiment towards the mining sector, which has always been a major vehicle for international capital inflows into South Africa."

Mr Trahar said that with "political wisdom" it was possible to create a mining industry in South Africa that "benefits all" – the black population and the sector's competitiveness. He said that, over the next 10 years, Anglo would be comfortable with up to 15 per cent of the mining industry passing into black ownership. The assets would be transferred on a "fair value" basis, with black groups having to raise the finance to purchase mines. Anglo would offer some black groups help with setting up these businesses and take equity stakes in them, the company said.

"One size doesn't fit all," Mr Trahar said. "We hope we can achieve values of 10-15 per cent on existing operations, and 25 per cent and beyond on new projects where the value has not been created yet."

Anglo's offer to sell 25 per cent or more of the equity in new mining projects to black interests compares with the initial draft proposal for 51 per cent black ownership of new operations within 10 years.

The company, whose operations span precious metals to paper mills and gravel quarries, reported a 1 per cent fall in net profit before exceptional items and goodwill amortisation to $840m (£542m) for the six months ended 30 June, helped by an additional $133m of cost savings. This was well ahead of City expectations of $785m. The company's shares closed up 6 per cent at 817p.

Anglo said that it remained "cautious" about the outlook for commodity prices, which are heavily dependent on the "uncertainties" surrounding global economic growth.