Norman Mbazima. Picture: SUPPLIED
Norman Mbazima. Picture: SUPPLIED

There is no question of Anglo American "cutting and running" from SA in 2018, with the century-old company plotting its future in the country and developing a strategy for mines at which the hard work to return them to profit has largely been done, says Norman Mbazima, deputy chairman of Anglo American SA.

Tasked with restructuring Anglo’s South African portfolio — which includes thermal coal mines for Eskom and export sales, iron ore, manganese, platinum group metals and diamonds — and defining the company’s identity in the country, Mbazima has overseen the R2.3bn sale to Seriti Resources of three coal mines that supply Eskom.

The next sale is likely to be the undeveloped New Largo colliery, which will also supply the state-owned power utility. Fewer than five contenders are bidding for the mine, one of which is Seriti. One of the most critical conditions in completing the sale of the collieries to Seriti, which will become the second-largest source of coal for Eskom, is Eskom’s transfer of the coal supply agreement from Anglo to the black-owned company.

Eskom has been dogged by management issues, with changes in the CE role and with its chief financial officer, Anoj Singh, suspended for his role in controversial deals involving the Gupta family, which is close to President Jacob Zuma. Former acting CE Matshela Koko faces disciplinary action.

Despite these ructions, Mbazima said he was confident Eskom would approve the transfer of the sales agreement to Seriti before the end of 2017.

Asked in an interview what gave him that confidence, he said: "The underlying deal can withstand any scrutiny…. My current experience with Eskom is an improving one. We have come from a more difficult area to a much better area.

"They’ve done a lot of their own clean-up and some people have been mandated to get on with things and we are making progress," he said. When it came to considering what to do with the bulk mining assets in export coal, iron ore and manganese, Anglo was in a "much happier place" than it had been in 2015 when it began the process of selling assets to reduce its $13bn debt in a low point in the commodity cycle.

Prices had improved, the assets were generating cash and the restructuring of the mines had been largely completed, Mbazima said.

Anglo CEO Mark Cutifani said the company would make big decisions on its assets once the ANC had held its December conference and decided on the party’s presidency.

"Anglo is 100 years old. It was here before apartheid, through apartheid, it’s here now and it will be here through whatever it is now. We are not cutting and running. We have to have long-term strategies that recommit to this country. There is good money to be made in SA," Mbazima said.

seccombea@bdfm.co.za

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