Golden goodbye

26 October 2005 By Edward Hadas

The UKlisted miner is rethinking the future of assets that currently deliver a quarter of its profits. The shift is overdue, but welcome. If Anglo American can actually live up to its potential, the initial positive share price reaction doesn t go far enough.

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Anglo American announced on Wednesday that it will increase its focus on core mining businesses. It will reduce its 50.1% holding in AngloGold Ashanti, consider the future ownership structure of the Mondi paper and packaging business and improve the returns in the Tarmac industrial minerals business through a careful operating review. The three businesses accounted for 24% of 2004 operating profits.

The company announced the intention to sell its 80% interest Highveld Steel and Vanadium. Vanadium prices are close to an alltime high.

The company also announced that it will return up to $1bn to shareholders in 2006, through either a share buyback or a special dividend.

Anglo American shares rose 5%. AngloGold Ashanti shares were flat. Highveld shares rose 11%. Shares of Angloplat, a platinum producer 75% owned by Anglo American, were up 7%. Traders credited the possibility that Anglo American would increase its interest.

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