Mining mogul Anil Agarwal has said he will not seek a board position on blue-chip British miner Anglo American Plc even after becoming its largest shareholder, and instead will support the management.
Mining mogul Anil Agarwal has said he will not seek a board position on blue-chip British miner Anglo American Plc even after becoming its largest shareholder, and instead will support the management. With over 21 per cent stake in the company that owns the iconic diamond brand De Beers, he wants to push for joint venture or technical collaboration between Anglo and his own companies for prospecting for diamonds, copper and coal in India. “It is a fantastic company. There cannot be any company better than that. It is a 100-year old company. We will support the management. We like the management,” he told PTI. The family trust of the chairman of diversified miner Vedanta has purchased about 9 per cent more shares, worth up to 1.5 billion pounds, on top of 2 billion pounds spent in March for acquiring a 12.43 per cent holding.
The stake has given him an indirect foothold in world’s largest diamond producer, De Beers. “It is a very big stake. I want to operate as a shareholder without a board position for now,” he said. Agarwal said he believes there is a synergy between Anglo and his firm Vedanta. “There can be joint ventures. They can work together,” he said. “They (Anglo) have technology and India offers opportunities for mining of diamond, copper, coal etc.” The mining baron said he would push for collaboration with Vedanta and Anglo for mining, particularly of diamonds in India. Last year, Agarwal had made an unsuccessful offer to merge part of his mining empire with Anglo American. Agarwal said he believes that Anglo American, a company founded by the Oppenheimer dynasty in South Africa a century ago, is capable of getting technology and skilled people to India which will help in increasing domestic production of metals like copper, diamond and gold.
Anglo American is one of the world’s top five mining groups, alongside BHP Billiton, Rio Tinto, Vale and Glencore and has copper mines in Chile, iron ore operations in Brazil and South Africa as well as De Beers, the iconic diamond producer. An indirect foothold in De Beers would increase Agarwal’s presence in one more commodity after zinc, aluminium, iron ore, copper, power, silver and lead. On an average, De Beers sells rough diamonds worth about USD 5.2 billion every year, half of which are purchased by Indian diamantaires based in Surat, Mumbai, Antwerp, Hong Kong, South Africa and Dubai. The diamonds sold by De Beers to its clients trickles down to the secondary market in Surat and Mumbai, where they are sold to small and medium diamantaires and even big companies. India’s diamond production is almost negligible and it is the largest consumer of rough diamond in the world, importing 80 per cent of total world production with an import bill of about USD 15 billion.
Recently Rio Tinto, world’s biggest mining company, exited from the Bunder Diamond mines in Madhya Pradesh due to delays in securing regulatory approvals. The Bunder mine has established diamond reserves. Vedanta has made significant progress on its strategic priorities over the last year, including completion of the Vedanta Ltd-Cairn India merger, ramping up production from its portfolio of low cost assets, increasing free cash flow, and optimising its balance sheet through two successful liability management exercises in January and August 2017, respectively. De Beers, the world’s leading diamond exploration, mining and marketing company, producing over 30 million carats of diamonds per annum, 35 per cent of global rough diamond production.
Anglo, which is listed on the London and Johannesburg stock exchanges, has revenue of USD 23 billion, EBITDA of USD 6.1 billion and market cap of USD 20 billion. Its operations extend across Southern Africa, North and South America, Australia, Asia and Europe and employs 113,000 employees worldwide. Its portfolio of mining businesses includes precious metals and minerals, base metals and minerals – copper, nickel, niobium and phosphates and bulk commodities – iron ore and manganese, metallurgical coal and thermal coal.