Anglo American faces image challenge

Posted: Thursday, August 02, 2007

Anglo American plc, the company partnering with Northern Dynasty Minerals to develop Pebble Mine, claims a good environmental and social record for its worldwide operations, but a Web search showed the London-based major mining resource group is not without detractors and harsh criticism.

It also is apparently attracting some attention from other major mining firms who could be contemplating takeover bids, raising questions about what that might mean for contractual arrangements Anglo now has with NDM.

According to news items found on the Web, one of Anglo's more profitable subsidiaries, AngloPlatinum Ltd. is on the hot seat in South Africa for a poor safety record. Company operations there have seen dozens of fatalities in the last few years. Last week, AngloPlatinum's CEO reportedly announced his resignation, reportedly stating the company needed to make a "real step-change in safety."

It also has been alleged that AngloPlatinum moved communities from ancestral lands, appropriated resources and gagged voices of resistance.

Community representatives from South Africa and the Philippines attacked Anglo's policies and practices at the resource group's April annual shareholder's meeting.

In 2005, the group Human Rights Watch alleged AngloGold Ashanti, an Anglo subsidiary, had "developed links" with an armed group alleged to have committed atrocities in the Democratic Republic of Congo (the Nationalist and Integrationist Front), that led to them acquiring access a gold-rich site. According to Human Rights Watch, AngloGold denied any working relationship with the front, but acknowledged making payments to the group under protest and duress.

AngloGold has interests and operations in the United States, specifically in Cripple Creek & Victor Gold Mining Co. in Colorado, and also owns Big Springs property in Nevada, currently in the final stages of reclamation and closure, according to AngloGold's Web site.

"Alaska will judge us by what we do here. That is the bottom line," said Paul Henry, spokesman for Anglo in Anchorage this week for the partnership announcement.

Addressing some of the news reports, Henry acknowledged the difficulties with AngloPlatinum, saying it was a direct reference to Anglo's safety record, something the corporation takes seriously.

"We are not happy with how we have performed," he said, adding the company already has shut down one of its five shafts while engaging in extensive worker training and applying other new safety measures. While saying it was no excuse, Henry did note that deep shaft mining is risky and statistically more likely to involve accidents than other forms of mining.

As to the challenges to Anglo's policies leveled by critics at April's annual general meeting, Henry said there is "always more than one side to a story."

Pointing to the controversy in the Philippines, he said it involved one faction in one of six communities affected by the Anglo operation. Regarding the criticism out of Colombia, he said Anglo is part of a joint venture there, but that grievances there pre-dated the corporation's involvement.

"There, we are part of the solution, not the problem," he said.

Whether or not Xstrata plc is eyeing Anglo American for takeover, as recently reported by Mining Weekly Online, there may be little Anglo can do regarding such business challenges. According to Henry, the contract between NDM and Anglo does not prohibit or preclude control of the ultimate parent company changing hands. It couldn't. Such a provision would be unenforceable, since the companies are publicly traded.

However, noting the Mining Weekly article, Henry said it was "all speculation" and the product of an imagination "more vivid than Desperate Housewives."

Here in Alaska, opponents of the mine say they will be looking very closely at Anglo's claims of environmental responsibility and measuring them by the facts.

"Up to now, we've only had a junior mining company with no development record to work against," said Art Hackney, a founding director of the conservative Renewable Resources Coalition.

Now comes a company seeking Alaska's trust that has a specific mining track record, something to educate the public about, Hackney said.

"Thus far, the only good science we've seen shows (Pebble) would not be developed safely," he said. "The nature of this organization — we're basically right-wing folks who say, 'Not this mine and not in this place.'"

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