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Most business eyes this autumn are focused on October 30 and Labor’s first budget.
At Anglo American’s headquarters on the outskirts of the City and in Pretoria, South Africa, the month of November is clearly looming.
By then it will have been half a year since May, when Sydney-listed mining giant BHP attempted to take control of Anglo, and in particular its copper assets, with an opportunistic £34bn bid.
Under the city’s procurement rules, BHP will be free to try again. Anglo showed nerves of steel and fought BHP with a self-help plan.
Diamond cut: Anglo American has agreed to spin off its most prominent asset: diamond miner De Beers
That involved easing the financial burden of Woodsmith’s polyhalite fertilizer scheme in North Yorkshire, demerging De Beers, selling its stakes in South African-listed mining interests and divesting coking coal assets to make steel.
Chinese co-investors have been found for the fertilizer scheme and the group has been selling its stake in Anglo American Platinum.
It’s been a tense ride for shareholders, but it’s been worth it as the shares are up 23.8 per cent so far this year, although there was a nervous moment in August when the shares briefly fell below 2,000p before going back up.
Speculation about a return offer from BHP boss Mike Henry is misplaced. Advisers have explored various ideas to leverage BHP’s advantage, such as removing preconditions for the sale of listed South African assets.
There should be relief at Anglo that the threat from BHP is easing for the moment.
That should not be an excuse for Anglo not to execute the plan that chief executive Duncan Wanblad promised investors.
A big part is to offload the high-profile De Beers asset with a possible split and listing among existing shareholders.
Mined diamonds have been threatened by nearly indistinguishable laboratory copies. That shouldn’t be a problem.
After all, cultured pearls have not proven to be a substitute for the real thing.
Nuclear winter
Government is all about the process and when it comes to nuclear energy, given the history of the industry, it is understandable that there is a degree of caution.
However, it is embarrassing how long it is taking to launch a fleet of British-designed small modular reactors (SMRs), using technology pioneered by Rolls-Royce in nuclear-powered submarines.
The word nuclear has barely left Energy Secretary Ed Miliband’s lips, despite it receiving a desultory mention in Great British Energy’s launch document. It is fantastic that the Government has finally chosen four companies to move to the next stage of negotiations, including Rolls.
The difficulty is that each passing day erodes Rolls’ “first-mover advantage” in terms of regulation and design, an advantage for competitors.
When Rolls first introduced the designs there was no one else in the race. Now a joint venture between GE and Hitachi is hot on its heels.
Westinghouse, one of the other candidates, previously owned the UK, but Gordon Brown sold it to Toshiba for £3.4bn in 2006. That appears to have been another industrial sabotage.
Rolls has invested £280 million in the company alongside partners including Qatar.
It also received £210m of government support from the Conservatives.
Keir Starmer and Rachel Reeves would have to get through the auction process and be licensed for the work. SMRs represent the best opportunity to create those new, greener jobs in the UK that the Labor Party is talking about.
going down
As the West recovered from Covid and confronted Russia after Ukraine, Saudi Arabia sought to maximize its oil revenues by limiting supply in the belief that it would keep prices high.
It hasn’t worked at all. The decline in Chinese demand and energy surpluses from fracking in the United States have turned the market upside down.
Not even a major conflagration in the Middle East could stem the tide of falling prices, currently at $70 a barrel.
The Kingdom needs revenue to finance its transformative megaprojects.
It now plans to pump more oil to spur foreign demand and boost revenues. This is encouraging for motorists and industrial users, if not terribly environmentally friendly.
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