The $140 billion Australian group’s ambitious swoop on rival Anglo American would see one of the Rainbow Nation’s most familiar companies largely withdraw from the country more than a hundred years after it was founded.

The question is whether the government in Pretoria can stop the $39 billion transaction, and whether it should.

South African officials have so far given BHP’s proposal a mixed reception.

Gwede Mantashe, the country’s Mining Minister, told Bloomberg, he “wouldn’t support” the deal.

But President Cyril Ramaphosa’s Spokesperson described the approach as “normal market activity”.

In reality, Pretoria has a host of reasons to be awkward.

SA mining is in decline: as a contribution of GDP it has fallen from 21% in 1980, to 7.5% in 2022.

The country’s platinum, diamonds, coal and iron ore are not integral materials to the all-important energy transition.

Corruption scandals at State utility Eskom and issues at freight carrier Transnet have led to frequent electricity blackouts and problems for miners trying to get shipments out of the country.

Anglo, which was founded in Johannesburg in 1917, has tended to be more of a help to the government than a hindrance in dealing with these challenges.

The London-listed group, currently run by Chief Executive Officer Duncan Wanblad, has invested $6 billion in its home country in the last five years, including in educational projects. It also acts as a reliable counterparty in the mining sector’s frequent labour disputes.

--Reuters--