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AngloGold Must Keep Local Listing to Sell Assets to Harmony Gold

South Africa blocked AngloGold Ashanti Ltd. from completely exiting the country by ordering it to keep its primary listing in Johannesburg in order to conclude the sale of its last remaining local assets.
Bloomberg
By Bloomberg
23 Aug
Russian Gold Bar Production At Ural Mining And Metallurgical Co. A 12.5 kilogram gold ingot sits at the Uralelectromed Copper Refinery, operated by Ural Mining and Metallurgical Co. (UMMC), in Verkhnyaya Pyshma, Russia, on Thursday, July 30, 2020. Gold surged to a fresh record Friday fueled by a weaker dollar and low interest rates. Silver headed for its best month since 1979. Photographer: Andrey Rudakov/Bloomberg

AngloGold Ashant's transfer of mining rights to Harmony Gold Mining Co. -- which is needed to close the sale of the Mponeng mine and surface assets in South Africa -- is also conditional on AngloGold keeping its headquarters in the country, the government said. The company has mulled moving its main listing, so the state’s move effectively keeps AngloGold tied to the country even if it concludes the assets sale.While the government didn’t give a reason, it indicates that South Africa is trying to maintain some control over an industry that’s been steadily declining. The company’s shares dropped as much as 4.7% in Johannesburg.

AngloGold announced the sale of the assets earlier this year in a $300 million deal, paving the way for an exit from South Africa for a company that emerged from a mining empire created by Ernest Oppenheimer a century ago. The miner has whittled down its presence in South Africa, focusing on more profitable operations in Africa, Australia and the Americas, as the sector in its home country dwindles amid challenges of mining the world’s deepest gold deposits.

Read More: South Africa’s Fading Gold Industry Has a New Champion

“AngloGold Ashanti Ltd. shall not disinvest from the South African economy by delisting from the Johannesburg Stock Exchange,” nor by relocating its head quarters from South Africa, the Department of Mineral Resources and Energy said by email. The delisting refers to the primary listing, it said.

Sale Approval

“AngloGold has not yet received all necessary approvals from the DMRE which are required to fulfil the conditions to the sale agreement for the sale of its South Africa assets to Harmony Gold,” an AngloGold spokesperson said by email. “We remain in dialog with the DMRE in relation to these, and will make the necessary disclosures once those engagements are concluded.”

AngloGold’s shares were down 4.5% by 2:05 p.m. in Johannesburg, but are still up about 50% this year. Harmony’s shares declined as much as 5.3%.

While the company has long mooted plans to move its primary listing from Johannesburg, that’s no longer a “priority” as the producer focuses on navigating the coronavirus pandemic, former Chief Executive Officer Kelvin Dushnisky said earlier this month.

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