Sunday Times (24/2/2008) — 02/24/2008
CABINET-LEVEL EFFORT TO REASSURE ANGLO AMERICAN
Moipone Malefane and Rowan Philip
Shift of Anglo American investment plans away from South Africa?
Deputy Finance Minister Jabu Moleketi dropped everything last week and flew to London to persuade investors not to abandon South Africa in favour of safer havens in Australia, Canada and the US. Moleketi told the Sunday Times that despite the pressure of Wednesday's Budget presentation, it was felt he and senior officials should attend the Anglo American results presentation in London and confront concerns about political and economic stability in South Africa. He said Anglo American chief executive Cynthia Carroll had signalled to the government that she was coming under pressure to shift investment plans from South Africa to Australia, Canada, the US and other countries.
 
Primary and secondary concerns of miners, bankers and analysts
After meeting miners, bankers and analysts at the results presentation and at an afternoon meeting at the South African High Commission on Trafalgar Square, Moleketi said the primary concern appeared to be about the stability of electricity supplies. The secondary concern was the stability of political and economic policy after next year's election. He said analysts had asked about SA mines declaring force majeure, saying they could not meet contractual obligations. They also posed questions about the government’s plans to restore stable energy supplies. "You could see it was leading to a question: 'Don’t you think it is time to be shifting to other destinations like Canada, Australia?'", he said. According to Moleketi, his reassurance, including a detailed Eskom presentation on plans to secure power reserves, had been well received. Sandile Nogxina, director-general of Minerals and Energy, provided a no-nonsense power point presentation, which stated: 'What we have done: Brought the Eskom system back into balance by restoring a workable reserve margin.'
 
Another Eskom 'cock-up': a missed meeting with investors
British guests polled by the Sunday Times said they were 'astounded' and 'impressed' that such a high-level group had been dispatched to address investors, which included Rio Tinto, Mitsubishi and Fidelity International. However, a planning mistake meant that senior Eskom officials missed the High Commission briefing, leaving some UK business leaders muttering in both annoyance and amusement. Other investors missed the event entirely because the invitation had announced the event as being held on March 20, instead of February 20, and the error was only noticed a day before Moleketi's briefing. Jeremy Metcalfe, CEO of Strategic Natural Resources, said: 'It was a brave effort to explain the remedies to the power situation to serious investors, although it was a shame the main people from Eskom, who we wanted to hear from, disappeared, having apparently cocked up their travel plans.' Metcalfe said his company would, however, fast-track its efforts to be listed on Johannesburg ’s Altex index on the strength of information provided at the briefing.
 
Investor confidence, so  long as government keeps its promises
John Battersby, head of the SA Marketing Council in Britain, said the message would hold investor confidence 'so long as we keep our promises'. He said: 'This is exactly what we need right now. Ministerial visits of this nature are very helpful in giving investors and opinion-makers the knowledge and the commitment they need to make major investment decisions.' Chris Mullard, honorary consul for South Africa in the UK, said: 'The message was received with a degree of interest and acceptance; I think it closed the gap between the negative media picture and the government's presentation.' Mullard said the mix-up in dates meant he had only 12 hours notice in which to rearrange his diary to come to the meeting, but said the presentation was 'competent and lucid'.
 
Report-back by Deputy Finance Minister Moleketi
Moleketi told the Sunday Times that the investors needed clarity on whether government's microeconomic policies would change, given that President Thabo Mbeki was no longer ANC president. 'They raised political economic management and in my message I explained that the current government is ANC and the microeconomic policies will not change. I emphasised microeconomic policies, fiscal stance of government and how we are managing the fluctuation of the rand. What I told them is a message that even our ANC president, Jacob Zuma, has said, that government is implementing ANC policies agreed and some reviewed in December.' Moleketi said he told investors that the prudent fiscal stance of government would not change, and on the same day Finance Minister Trevor Manuel projected a surplus going forward when he tabled the national Budget. 'That is a stance that the ANC, through its president and secretary-general Gwede Mantashe, welcomed. I also told them about the price stability. It speaks to the inflation target. These policies implemented by the current government are ANC policy and will not change. The inflation target is important to ensure that there is price stability. The investors look at numbers and say, Is inflation going to be like Zimbabwe, for instance, where their profits are eroding because of mismanagement of economy?' Moleketi explained.