AngloGold Ashanti Ltd. is speeding its retreat from South Africa, where the gold miner was formed more than a century ago, with plans to list in New York and make London its new headquarters.
AngloGold sold its last mine in the country in 2020, marking an exit from South Africa for a company that emerged from a mining empire created by Ernest Oppenheimer. By shifting its primary listing to New York, AngloGold will be at the epicenter of the gold industry, making it easier to tap capital and narrow the discount its shares trade at to larger rivals Barrick Gold Corp. and Newmont Corp.
The move by AngloGold is a fresh blow to South Africa in a week when the rand slumped to a record low amid allegations the country supplied weapons and ammunition to Russia. AngloGold has mulled a new primary listing for years, but faced pressure from the government while it still had assets in the country.
AngloGold Chief Executive Officer Alberto Calderon said the company had already had extensive talks with the South African government.
“They understood that there is a moment in time for companies when it’s time to invest in countries and then there’s a moment for strategic reasons to divest and move elsewhere,” he said.
AngloGold, the seventh-largest weighting in the benchmark FTSE/JSE Africa All Share Index, fell as much as 7.9% in Johannesburg. RBC Capital Markets said the valuation upside projected by the company’s management was “questionable,” while securing the backing of 75% of shareholders — with about 40% being South African investors — was a “key hurdle” for the move.
The shift comes during a tumultuous time for the wider gold industry. A series of mega deals has created two industry behemoths in Barrick and Newmont that now dwarf one time rivals like AngloGold.
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AngloGold hopes that by listing in New York, where many of its investors are already based, the company will be more easily able to tap capital. It also sees a primary listing there as a way to narrow the discount that the company’s shares trade at to larger rivals such as Barrick.
“The changes announced today will complement the work already underway to reduce our cost of capital, enhance our cost competitiveness versus our peers and optimize our portfolio by providing improved access to the world’s largest capital markets and pool of gold investors,” Calderon said in a statement Friday.
Anglo’s creation in 1917 by Ernest Oppenheimer and the subsequent development of what was for decades the world’s biggest gold industry underpinned the development of South Africa into the continent’s preeminent economy. Yet the end of apartheid allowed South African miners to invest overseas into untapped gold bodies, and AngloGold accelerated its expansion outside the country in 2004 when it acquired Ghana’s Ashanti Goldfields Ltd.
Today AngloGold operates mines on four continents, after shifting its focus to more profitable operations elsewhere in Africa, Australia and the Americas. At the same time, the sector in its home country has dwindled due to the challenges of mining the world’s deepest gold deposits.
The South African gold industry is less than a fifth of the size it was at its peak and its importance to the economy is rapidly diminishing. Since selling its last mines, AngloGold employs just 280 of its 30,000 workers in the country.
The announcement comes as South Africa’s biggest miners are being hamstrung by power outages and infrastructure breakdowns that are preventing them from both mining and then exporting their products.
“This is not about South Africa,” Calderon said. “We are proud of our heritage.”
The total costs of AngloGold’s move are estimated at around 5% of its market capitalization, mostly to cover taxes payable in South Africa, the company said.
AngloGold fell 6.3% as of 1:05 p.m. in Johannesburg, paring this year’s gain to 46%. The shares have outpaced an index of precious-metals miners, which is up 17%.
While the company’s costs surged in the first quarter, AngloGold maintained its full-year guidance on expectations of an improvement in the second half.
AngloGold said it will have secondary listings on the Johannesburg Stock Exchange, South Africa’s A2X market and on the Ghana Stock Exchange, following a “comprehensive review of its domicile and listing structure.
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--With assistance from Renee Bonorchis.
(Updates with comment from analyst in sixth paragraph)
