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AngloGold must keep local listing to sell assets to Harmony Gold

AngloGold shares drop.
Image: Bloomberg

South Africa blocked AngloGold Ashanti from completely exiting the country by ordering it to keep its primary listing in Johannesburg in order to conclude the sale of its last remaining local assets.

The transfer of mining rights to Harmony Gold Mining Co — which is needed to close the sale of the Mponeng mine and surface assets in South Africa — is also conditional on AngloGold keeping its headquarters in the country, the government said. The company has mulled moving its main listing, so the state’s move effectively keeps AngloGold tied to the country even if it concludes the assets sale.

While the government didn’t give a reason, it indicates that South Africa is trying to maintain some control over an industry that’s been steadily declining. The company’s shares dropped as much as 4.7% in Johannesburg.

AngloGold announced the sale of the assets earlier this year in a $300 million deal, paving the way for an exit from South Africa for a company that emerged from a mining empire created by Ernest Oppenheimer a century ago. The miner has whittled down its presence in South Africa, focusing on more profitable operations in Africa, Australia and the Americas, as the sector in its home country dwindles amid challenges of mining the world’s deepest gold deposits.

“AngloGold Ashanti shall not disinvest from the South African economy by delisting from the Johannesburg Stock Exchange,” nor by relocating its head quarters from South Africa, the Department of Mineral Resources and Energy said by email. The delisting refers to the primary listing, it said.

Sale approval

“AngloGold has not yet received all necessary approvals from the DMRE which are required to fulfil the conditions to the sale agreement for the sale of its South Africa assets to Harmony Gold,” an AngloGold spokesperson said by email. “We remain in dialog with the DMRE in relation to these, and will make the necessary disclosures once those engagements are concluded.”

AngloGold’s shares were down 4.5% by 2:05 p.m. in Johannesburg, but are still up about 50% this year. Harmony’s shares declined as much as 5.3%.

While the company has long mooted plans to move its primary listing from Johannesburg, that’s no longer a “priority” as the producer focuses on navigating the coronavirus pandemic, former chief executive officer Kelvin Dushnisky said earlier this month.

© 2020 Bloomberg

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Hello SA government — Forcing a hollowed out shell of a former great company to keep its JSE listing ???

Everyone will jump in to buy the leftover trash ne !!!!!!!!!!!!!!!

How did we end up with such a bunch of incompetent, thieving imbeciles in charge of a country.
They just cannot grasp the fact that you will not attract or keep investors in this country if they keep on making idiotic laws etc. You cannot FORCE companies to stay in SA if they want to leave. Eventually they will be gone.
The DMRE should maybe spend some time analyzing why these companies want to leave our shores.

This is very funny. What exactly will be the penalty if AngloGold decides to abandon it’s primary JSE listing a year from now? Will SA force them to buy back Mponeng and ask Harmony to give it back. As laughable as many of the covid regulations…

In the end people will just nod when given idiotic rules to apease the idiot and then still do what common sense dictates

The ANC destroyed mining in South Africa. Any mining company is squeezed between militant unionism, unproductive labour, BEE, a repressive regulatory regime, sovereign risk and expensive capital.

In effect the ANC slaughtered the cash cow. Now they cannot handle the thought of it relocating to greener pastures. Hubris, amorality and rank incompetence are a the worst character traits for “leaders”.

It appears that the proceeds of any local asset sales to any local company are being locked down and the company itself is being locked down. This appears to be a case of official lock down fever spreading like a virus.

Now you want wmc?…do make up your marxist minds, anc!

End of comments.

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