Ramaphosa refutes the existence of a hostile business environment in South Africa.

Ramaphosa refutes the existence of a hostile business environment in South Africa. Image by Flickr.

Ramaphosa rejects notion of hostile business environment in South Africa

The Presidency responds to claims of a hostile business environment in South Africa amidst mining sector concerns.

Ramaphosa refutes the existence of a hostile business environment in South Africa.

Ramaphosa refutes the existence of a hostile business environment in South Africa. Image by Flickr.

The Presidency is countering speculation that BHP Billiton’s bid to acquire Anglo-American assets outside South Africa reflects hesitancy to invest in the country because of the ANC government’s economic policies.

Ramaphosa refutes claims of unfriendly business environment

Vincent Magwenya, spokesperson for the Presidency, certain analysts and media outlets have characterised recent market activity as a lack of confidence in South Africa,” stated Magwenya during a media briefing on 29 April.

Magwenya emphasised, “The Presidency does not agree that BHP Billiton’s commercial actions indicate a hostile environment for investors.”

He further mentioned that through collaborations with the private sector, “priority areas undermining investor and societal confidence” are “being addressed.”

According to BusinessTech, on 24 April, Anglo American, a mining company specialising in diamonds, Platinum Group Metals (PGM), and iron ore, received an unsolicited all-share merger proposal from BHP worth $42.6 billion.

The proposal required Anglo American to conduct two separate demergers, transferring its shareholding in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders.

The proposed merger between Anglo American and BHP was the most significant change in the mining sector in more than ten years. 

Critics argued that BHP’s attempt to separate Anglo America’s South African assets as part of its takeover bid indicated a lack of confidence in the country’s economic policies under the ANC government.

Magwenya dismissed assertions that omitting South African assets from the merger deal signalled a lack of confidence in the country’s policies, which might deter investors.

He emphasised that issues impacting investors and public trust, such as load shedding, logistical hurdles, and crime and corruption, are being addressed through collaboration and cooperation with private businesses.

“While much still needs to be achieved to turn the tide around completely, the significant steps taken to rebuild credible institutions have begun to bear fruit and set the stage for further progress,” said Magwenya.

“This partnership [between the public and private sector] should reassure both local and foreign investors that considerable resources and expertise are being leveraged in government and in the private sector to curtail crime, continue improving the functionality of our ports and enable an investor and societal environment that fosters inclusive economic growth and prosperity,” added the spokesperson.

BHP makes bold move: Launches bid for Anglo American takeover

Anglo American, a prominent British mining company, acknowledged that it was “reviewing” a takeover offer from BHP, its larger Australian competitor, in what could be one of the mining sector’s most significant deals in recent years.

According to IOL,Anglo-American did not reveal the value of the “unsolicited” bid, which must be finalised by 22 May, potentially making it the year’s largest deal.

BHP’s proposal is contingent on Anglo American divesting its platinum and iron ore businesses in South Africa.

BHP, headquartered in Australia, boasts a market capitalization of roughly $148 billion (approximately R2.8 trillion), whereas Anglo American, based in London, has a market capitalization of about $36 billion.

Anglo American stated, “The board is assessing this offer with the assistance of its advisors.”