JOHANNESBURG (I-Net Bridge) -- The Minister of Minerals and Energy, Buyelwa Sonjica, said part of the discussions between her and the new Anglo American [Nasdaq:AAUK] chief executive was over the "stand-off" between the ministry and AngloPlat's subsidiary, Anglo Platinum [JSE:AMS].
"We thought it would be important to discuss the philosophy behind the act. We think this is important given the misunderstanding, distortions or maybe different understanding between ourselves the ministry and the industry," Sonjica told the media following the lunch meeting.
"And I am sure you will appreciate that one of the companies that falls under Anglo American is Anglo Platinum and that kind of misunderstanding and distortion has been happening between ourselves and Anglo Platinum," added Sonjica.
Jacinto Rocha, chief director for licensing at the minerals and energy department, said after the media briefing that the department has been discussing conversion of mining rights with Anglo Platinum for three years, compared to discussions with Xstrata [LSE:XTA] and Lonmin [LSE:LMI], which took less than a year before new order mining rights were converted from old ones.
The deadline for conversion is still two years away, with 15% ownership required by 2009 and 26% empowerment ownership by 2014. This ownership is worked out on production.
The minister said further meetings would be required between the DME and Carroll to discuss the department's relationship with Anglo Platinum which according to the minister is "not as good as we would want it to be."
The matters being disputed relate to compliance issues, social and labour development and BEE compliance, according to Rocha.
"We have not at this stage come up with a solution how best we are going to deal with those problems, but we have agreed that we need to meet again to deal with these issues," said Sonjica.
Anglo Platinum has previously indicated that it has submitted its conversion applications, and considering Rocha's insistence that the company will eventually receive its rights, it seems the matter comes down to insufficient detail from the world's largest platinum miner on its transformation commitments.
Rocha said the DME would even consider proposals of including future production ounces in the estimation of empowerment ownership.
"The DME would not just say no," said Rocha. "We would say to Anglo Platinum, make us understand it and make us accept it."
An example of further detail would be Anglo Platinum's recently announced Bakgatla Tribe transaction, where the tribe exchanged an annual royalty and cash for 15% equity stake in its Union mine. At the time, Anglo Platinum said it estimated that the deal had added 2%-3% towards its ownership participation targets.
In its 2005 annual report Anglo Platinum said it believed it had, by then, satisfied the 15% ownership level.
Carroll failed to address the Anglo Platinum issues in her summary of the discussions, and Anglo Platinum spokesman, Trevor Raymond, declined to comment when contacted by phone.
The new chief executive will also be visiting various Anglo American operations on her visit, including mines producing iron ore, platinum and coal.
On Friday, South Africa's National Union of Mineworkers (NUM) said as many as 3,000 members out of a total workforce of 5,000 stayed away from AngloPlat's Modikwa on Friday after negotiations had broken down over benefits.
The mine is jointly-owned by Anglo Platinum and African Rainbow Minerals [JSE:ARM]. The Modikwa mine produced 293,313 ounces of platinum group metals during 2006.
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