“In 2011, mining directly contributed 9.2% of South Africa’s GDP and helped to generate a total of 18.7% of GDP. In terms of jobs the mining sector directly employed over 500,000 people, and was indirectly responsible for a further 840,000 jobs. Based on a typical dependency ratio, this means that around 13.5 million people are dependent on mining- generated jobs.” Cynthia Carroll, chief executive, Anglo American plc.
OUR ECONOMIC CONTRIBUTION
The disclosure of our strategic approach on economic performance indicators is detailed on the front cover of the Integrated Annual Report.
Payments to Government
Tax revenues generated from our activities form an important element of our economic contribution to the communities and countries in which we operate and this understanding is reflected in our approach to our tax affairs. That approach is framed by the Anglo American Group Tax Strategy, our support for the principles of transparency and the nature of our approach to engagement with stakeholders. More information about the Anglo American Group Tax Strategy can be found in the Anglo American Sustainable Development Report www.angloamerican.com.
The mining industry operates in an increasingly financially constrained world. Mining is a high-risk, long-term business, and the capital investment and commitment we make to host countries reflects that. Governments also recognise that their countries exist in this globally competitive environment, competing for new and continuing long-term investment. There is a need to balance the risks and rewards of responsible investment and the development of non-renewable resources. For industry this means balancing high-risk, long-term capital investment with likely future returns. For government it means balancing the need to raise tax revenues with a competitive, attractive tax regime and other objectives such as employment and poverty alleviation.
That balance relies on the capacity of governments to administer the tax regime, and governance once those revenues have been collected.
There are a number of different initiatives aimed at building capacity, governance and transparency such as the Extractive Industry Transparency Initiative (EITI) of which we are founder members, and we believe that these are fundamental to ensuring that communities benefit from the significant value generated by companies like Amplats.
VALUE ADDED STATEMENT
for the year ended 31 December 2012
DIRECT VALUE ADDED TO SOUTH AFRICA
Total turnover in 2012 was R43,148 million, distributed as follows:
Anglo American Platinum Limited is primarily a platinum producer operating in South Africa. All other metals produced are by-products of the platinum process. The following analyses of the Company’s revenue are based on the end-use of metals sold, rather than on the location of primary customers:
for the year ended 31 December 2012
UNKI INDIGENISATION IMPLEMENTATION PLAN APPROVED
On 2 November 2012, Anglo American Platinum Limited (Amplats) announced the approval of the proposed 51% indigenisation implementation plan at Unki Mines (Pvt) Limited by the Zimbabwean Minister of Youth Development, Indigenisation and Empowerment. This transaction is the culmination of the originally envisaged process to develop Unki Mine in partnership with the people of Zimbabwe.
The proposed transaction will be facilitated through a notional vendor financing structure and includes the following shareholding structure:
- A 10% equity ownership transaction with a trust established for the benefit of the community neighbouring Unki’s operations.
- A 10% equity ownership transaction with a trust to be established for the benefit of all full-time employees at Unki.
- A 10% equity ownership transaction with a consortium of strategic equity partners.
- A 21% equity ownership transaction with the National Indigenisation and Economic Empowerment Fund.
The disposal of equity under the indigenisation implementation plan will be undertaken at a market-related valuation of Unki adjusted for debt, and is subject to the requisite Amplats board and statutory approvals, as may be required. The acquisition price will be repaid from future dividends and Amplats intends to implement the indigenisation plan by 30 June 2013. The expected economic cost to Amplats of the empowerment plan is US$59.3 million, which equates to 12.9% of the enterprise value of Unki Mine at the date of the transaction.
Speaking in response to the November 2012 development, the chairman of Unki Mines (Pvt) Limited, July Ndlovu, commented that “Anglo American Platinum continues to contribute significantly to the upliftment of its host communities and its employees in South Africa, and will leverage this experience to ensure the successful and seamless implementation of this transaction in Zimbabwe.”
The Government of Zimbabwe has also agreed to ensure that the Company will receive payment of the amount of US$142 million due to it for the cession, in March 2008, of the Kironde and Bougai mineral right claims. This payment will be in lieu of empowerment credits due to it as per the 2008 cession-of-claims agreement, and is in addition to the amounts that will be receivable in respect of the disposal of the 51% equity in Unki.
According to July Ndlovu, the final success of the Zimbabwean indigenisation transaction would be “dependent on further engagement and consultation with affected stakeholders”. Consequently, the transaction formed part of “an ongoing engagement programme with the Government of Zimbabwe, Unki’s host communities, employees and other key stakeholders”.