Anglo takeover attempt triggers corruption claims against South Africa’s ruling party

The Democratic Alliance said ANC's poor mining policies had left Anglo vulnerable to a takeover bid - Nadine Hutton/Bloomberg

BHP’s attempt to buy Anglo American has triggered corruption claims against South Africa’s ruling African National Congress (ANC).

The Democratic Alliance, the official opposition, said Anglo, which has significant operations in South Africa, had been left vulnerable to a takeover bid as a result of the ANC’s poor mining policies.

Mineral resources shadow minister James Lorimer said “violent mining mafias” and “corruption” had flourished in the strategically important sector under the ANC government. He said the sector was now “toxic”.

Mr Lorimer said: “BHP’s attitude reflects how mining companies and mining investors worldwide view the way the ANC has made doing business in South Africa extremely difficult.

“The ANC’s greed, incompetence and obstructionism has corroded an industry which should be a world leader and a South African champion.

“South African mining assets are now seen as toxic. That is why investment is so low in what should be one of the world’s mineral resource treasure houses.”

Vincent Magwenya, spokesman for South Africa’s president Cyril Ramaphosa, said: “The Presidency rejects the notion that a commercial approach by BHP Billiton equals a hostile environment for investors.”

London-listed Anglo rejected BHP’s £31bn takeover approach last week, saying the “opportunistic” bid undervalued the company. Australia’s BHP is widely expected to return with an improved offer.

As part of the complex proposed deal, BHP wants to spin off Anglo’s South African subsidiaries, Kumba and Amplats.

The move is a signal of BHP’s reluctance to re-enter the country, having sold off most of its South African assets in 2014 through the demerger of South32.

Minerals resources minister Gwede Mantashe last week said the country’s experience with BHP was “not positive”.

South Africa is heading to the polls for a general election on May 29, with Mr Ramaphosa standing for his second term. The Anglo takeover is emerging as a key political battleground.

Anglo’s top shareholder is an arm of the South African government.

Mr Magwenya said the President was seeking to rebuild confidence in the South African economy by battling crime and corruption, which are undermining investor confidence.

The government is trying to get South Africa off the US Financial Action Task Force’s greylist, which identifies countries under increased monitoring for problems with money laundering.