In its heyday, before the 1994 election that brought Nelson Mandela to power, the Anglo American conglomerate accounted for 54 per cent of the South African stock exchange value and was the world’s largest mining company.
It was involved in every part of the economy, from banking to manufacturing, and even owned the country’s biggest newspaper company.
Then it moved its domicile to London, sold large chunks of its South African assets and set off on a diversification spree, including a massive iron ore mine in the Brazilian jungle, mostly financed by bank debt.
The result has been disastrous for shareholders. Anglo shares were the worst performer in the FT100 last year with a drop of 75 per cent and in the financial turmoil and commodity price collapse earlier this year, they stood at 221p in January, capitalising the group at just £3 billion (currently Dh14.2bn), its lowest level in 30 years.
That clearly was the point to buy them because they have since increased almost four-fold to 860p as the chief executive, Mark Cutifani, has accelerated his programme to sell off another US$6bn of assets and reduce the company’s bank debt.
But there is more to it than that.
While other investors were fleeing for the hills, South Africa’s Public Investment Corporation (PIC), which is basically a wing of President Jacob Zuma’s government, has increased its shareholding from 8.3 per cent a year ago to 13 per cent now and is still buying more.
Over the weekend it became apparent that PIC has a more powerful motive than simply spotting a bargain – it is now demanding that Anglo bundle its South African assets into a new company and spin it off as a new “national mining champion”, in which the government would be the biggest shareholder.
The proposal has been greeted with dismay in London by the Anglo board, which is said to be resisting it ferociously.
The loss of its South African operations would leave Anglo as a truncated and lopsided medium-sized mining corporation with not much more that its copper mines and the De Beers diamond miner.
The Sunday Times, on Sunday, quoted a mining source saying: “If they did this, it would be the end of Anglo.
“There would be a queue of bidders for copper, offering big numbers that they would find it very hard to turn down.
“That would leave it with De Beers.”
PIC, which is ostensibly a pension fund managing $100bn of government workers’ savings, has become more and more an arm of the African National Congress (ANC), which exercises an alarming degree of control over its investment policies.
In the past few years, it has taken stakes in businesses ranging from mining to newspapers, which make little commercial sense but are seen by its growing band of critics as politically driven.
Analysts reckon that up to 10 per cent of its portfolio, and maybe more, is invested in assets that the ANC has instructed it to buy for its own strategic reasons.
After its disastrous showing in the recent elections, the ANC is desperately hunting for a sop for its dissatisfied left wing and trade union membership, and a national mining company might do the trick.
It seems to be disinterested in the risks to pensioners’ funds.
At its peak, Anglo was the biggest producer of gold and platinum in the world and its huge mining interests included coal, copper, chrome, iron ore diamonds and just about every mineral worth mining.
It employed more than 500,000 people, a number which is now down to 52,000 workers, but its mining interests, particularly its platinum mines, still form the heart of the country’s mining industry.
Nothing, other than farmland, has the same emotive public appeal as mining assets, which many ANC members have always believed belong in public ownership.
In the case of Anglo, PIC is showing a decent profit, so no one can complain about that.
But if it succeeds in prising out Anglo’s key platinum, coal and other South African assets into what would basically be a state-controlled mining group, the message will change.
There are widespread complaints already that awards of mining licences and permissions by the ANC government unfairly benefit its friends and supporters, including the Indian-born Gupta brothers and Mr Zuma’s own family.
If it gets boardroom control of Anglo American, the symbol of South Africa’s mining industry, the damage done to South Africa’s reputation as a destination for international mining finance would be considerable.
Ivan Fallon is a former business editor of The Sunday Times