News24.com | STOCK TAKE | Actually, AngloGold's exit has everything to do with SA

OPINION

It's not me, it's you

AngloGold breaks up with SA

Disingenuous as it might be, it's really no wonder that AngloGold Ashanti has been at pains to say its decision to exit South Africa has nothing to do with the country itself.

Three years since selling off its SA assets, and after a year of negotiations, the government has opened the exit door and all AngloGold Ashanti needs do is make a run for it.

Well that, and pay some R11 billion in fees.

The company may say it has "nothing to do with SA", but in truth it has everything thing to do with it.

Despite roots going back more than 100 years, the company chose to sell off its final remaining SA assets in 2020. Those assets - which included Mponeng, the world's deepest gold mine – were clearly not spent as they are now being worked by Harmony Gold, which is enjoying strong revenues and is even considering extending the 4km deep mine down further.

For AngloGold, it wasn't worth the effort. And to be fair, they are not alone. The frustrating political, regulatory, labour and energy landscape is making it unattractive for companies to continue to invest here, let alone to explore for new resources.

While AngloGold's SA asset sale was hoped to rid the group of the undeniable discount that the market places on SA companies, it turns out it wasn't good enough.

The company has underperformed compared to its peers making, but there are SA reasons too.

By virtue of being headquartered in SA, AngloGold is subject to SA laws and regulations – and that puts investors on edge. And, as the group's CEO noted, its credit rating is also automatically tied to that of the junk-rated sovereign.

Now that the door is open, AngloGold is pretty much home free. All it now needs is for investors to agree that leaving SA is worth the hefty R11 billion price tag. They probably will.

If all goes smoothly, the exit will also set a precedent for other corporates mulling a similar move  - of which you can be assured, there are many.

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