commdev workshop 19 june 2006 local business development - anglo american’s experience in south...
TRANSCRIPT
CommDev Workshop19 June 2006
Local Business Development
- Anglo American’s experience in South Africa
Edward BickhamExecutive Vice PresidentExternal Affairs
Anglo American: a brief profile
• Founded in 1917 in South Africa
• Moved primary listing to London in 1999
• One-third of assets in Southern Africa; two-thirds in
developing or transition economies
• FTSE UK top 20 company; FTSE Global 103
Anglo Platinum 75%
Base Metals 100%
Anglo American plc
Anglo Coal 100%
AngloGold Ashanti 42%
Ferrous & Industries
Mondi Paper & Packaging 100%
Industrial Minerals 100%
De Beers 45%
History
• 1989: founded as Small Business Initiative
• 2000: renamed ‘Anglo Zimele’
• 2003: Khula Mining Fund
Objectives
• Create access to mainstream business opportunities for
Historically Disadvantaged South Africans
• Create sustainable, commercially viable, enterprises driven
by people with passion and entrepreneurial spirit
• Contribute to the sustainable development of mining
communities
History and Objectives
Structure
• Business Development
• Junior Mining Fund
• Facilitation of BEE procurement
Status
• Invested in 30 companies – end 2005
• Supports over 2,000 direct jobs
• Turnover in 2005 $88.1 million (2004 $41 million)
• Assisted Anglo American to increase its 2005 Black Economic
Empowerment spend to $1.4 billion
• Evaluation carried out in 2005 showed a survival rate of 72% over 8 years
Anglo Zimele – Structure and Status
Business Development
• Minority (20%-30%) equity stake
• Loan finance on ‘commercial’ terms
• Shareholder and loan agreements
• Entrepreneur(s) must also make commitment
(time and financial)
• Board representation
• Skills transfer and mentoring
• Business planning and corporate governance
support
• Performance requirements on corporate
responsibility issues
• Clear exit strategy (3 year time horizon)
Anglo Zimele – the Model (1)
Procurement
• Identifies procurement opportunities with Anglo
divisional supply chain personnel
• Helps to source BEE suppliers based on
commercial principles
– Quality
– Price
– Service and delivery
– Cost savings
• Hands-on support/coaching for access to tenders
• Encourages diversification to supply other
businesses
Anglo Zimele – the Model (2)
• Focus on commercial principles
• Talent, motivation and commitment of entrepreneurs is
key
• Closeness to core business gives better feel for credit
risk
• Aim to diversify as quickly as practicable from sole
dependence upon Anglo supply chain
• Mentoring and support a crucial and flexible element
Lessons Learned
• Contributes to realisation of requirements of South African
Mining Charter
• Increasing involvement in facilitation of BEE deals with pre-
existing ‘non-empowered’ suppliers
• Not involved in micro-finance or sustainable livelihoods initiatives
• Community enterprises handled by division
• Seeking to export model to South America, China and Eastern
Europe
Anglo Zimele – How it fits in