Source: Zhitong Finance

South Africa's largest trade union federation urged local shareholders, including the powerful Public Investment Corp. (PIC), to oppose BHP.US (BHP.US)'s deal to acquire Anglo American Plc (Anglo American Plc).

The South African Trade Union Congress (COSATU), which includes the National Federation of Miners of South Africa (COSATU), said it was not in the national interest to reach an agreement. According to compiled data, South African shareholders hold about 26% of Anglo-American Resources's shares, and PIC holds 8.4% of the shares.

According to information, BHP Billiton's April 25 proposal to acquire British and American resources aroused the anger of South African Mining Minister Gwede Mantashe and other members of the government. In response, the Australian company sent a senior team, including the CEO, to South Africa to solicit support from government officials, regulators, and local Anglo-American resource shareholders.

BHP Billiton's proposals include plans for Anglo-American Resources to divest its Johannesburg-listed platinum and iron ore divisions before finally acquiring remaining assets. Anglo-American Resources was founded in 1917 in Johannesburg, and also owns manganese ore and diamond mines in South Africa. Although the mining company has been the cornerstone of the South African economy for decades, it moved its headquarters to London in the late 1990s.

According to earlier reports, Anglo-American Resources rejected the initial offer, but it is expected that BHP Billiton will make a higher offer. PIC, which is responsible for managing government workers' pensions, said it would evaluate any offer from BHP Billiton.

“COSATU is deeply concerned that Anglo-American Resources' assets in South Africa may be sold to BHP Billiton,” the trade union federation said in comments on Tuesday. “It is essential that South African shareholders, including PIC, ensure that these assets remain owned by South Africa.”

BHP Billiton said that according to its takeover offer, Anglo-American Resources' controlling interests in Kumba Iron Ore Ltd. and Anglo American Platinum Ltd., will be distributed to the company's investors. The company said it would allow Anglo-American Resources' shareholders to directly receive dividends and future value from these companies while allowing them to adjust their exposure to these businesses.

COSATU is an important ally of South Africa's ruling African National Congress, and President Ramaphosa is the co-founder of the National Federation of Miners of South Africa. The acquisition of BHP Billiton was proposed before the national election later this month, which could cause the African National Congress to lose its first majority of seats since it took office in 1994.

President Ramaphosa refuted the claim that BHP Billiton's acquisition was a vote of no confidence in South Africa. Earlier, the opposition party claimed that BHP Billiton's acquisition was a sharp accusation of the government's handling of the economy. South Africa has one of the highest global unemployment rates and deteriorating infrastructure.

“These companies were set up with the support of South African miners and pension funds,” COSATU said. The profits they generate are necessary to grow the economy and create decent jobs.”

BHP Billiton's target is Anglo-American Resources' copper mine in South America. If the acquisition is successful, this will make it the world's largest copper producer.

Due to strained labor relations, power outages, and the deterioration of the National Freight Railway Company, Anglo-American Resources' operations in South Africa have been hampered. Since there weren't enough trains to transport them to the port, the company's Kumba subsidiary had to stock up on steelmaking raw materials.