Indian industrialist Anil Agarwal has claimed he was behind mining giant Anglo American’s decision to retain its iron ore projects in South Africa.
Indian industrialist Anil Agarwal has claimed he was behind mining giant Anglo American’s (LSE:AAL) decision to retain its iron ore projects in South Africa.
The company’s major iron ore asset in South Africa, Kumba Iron Ore, produced 45 million tonnes of iron ore in 2017, making it a major economic driver for the African nation.
Agarwal, who is the founder and executive chairman of Vedanta Resources (LSE:VED), has an almost 20-percent stake in Anglo through his family trust, Volcan Investments.
“I always believed that South Africa has a lot of potential, and Anglo management may not have always believed that … and they wanted to sell some assets,” he told Reuters in an interview.
“When I became the biggest shareholder I advised them (not to sell). And I am very pleased that they have not sold those assets. And personally I was right because the share price is now up 50 percent and the profits are getting better.”
A turnaround in fortunes and rising commodities prices led the company to change its mind.
Anglo American was reported to be planning the sale of key South African assets, including Kumba Iron Ore, in early 2017 during a commodities slump before Agarwal swooped to purchase 20 percent of the shares in the company over the course of the year.
In Anglo American’s Q1 2018 production report, Kumba Iron Ore was reported to have produced 10.9 million tonnes of the metal in the three months ended March 31, up from 10.5 million tonnes in Q1 2017.
“We have 1.3 billion people in India … India is a huge market for (Anglo American), they can sell all the coal there, they can sell platinum there, they can sell iron ore there, they are selling 80 to 90 percent of diamonds there,” Agarwal explained.
“I can only facilitate them, I am not in the management, they have very good management,” he said.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.