<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-820x547.jpg" alt="" class="wp-image-481198" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-2150650304-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">NAIROBI, KENYA &#8211; APRIL 29: Ajay Banga, President of the World Bank, speaks to the audience during the IDA for Africa Heads of State Summit on April 29, 2024 in Nairobi, Kenya. (Photo by Patrick Meinhardt/Getty Images for Global Citizen)</figcaption></figure>



NAIROBI, April 29 (Reuters)&nbsp;&#8211;&nbsp;African leaders on Monday called for rich countries to commit record contributions to a low-interest World Bank facility for developing nations that they rely on to help fund their development and combat climate change.



Donors will make their cash pledges to the International Development Association (IDA), a World Bank institution that offers loans with low interest rates and long tenures, at a conference to be held in Japan in December.



&#8220;We call on our partners to meet us at this historic moment of solidarity and respond effectively by increasing their IDA contributions&#8230; to at least $120 billion,&#8221; Kenya&#8217;s President William Ruto told a meeting of African leaders and the World Bank to discuss IDA funding.



African economies were facing a &#8220;deepening development and debt crisis that threatens our economic stability, and urgent climate emergencies that demand immediate and collective action for our planet&#8217;s survival,&#8221; Ruto said.



He cited Kenya&#8217;s own devastating floods and a severe drought affecting Southern African nations such as Malawi.



If the donors pledge the minimum amount suggested by African leaders, it will be a new high after the last round of fundraising in 2021, which raked in $93 billion.



IDA lending operates on a three-year cycle, which is usually preceded by donors making their contributions at a global meeting.



IDA offers low interest rates loans to 75 developing nations around the world, the World Bank said, with more than half of them in Africa.



The funding is used by governments to boost access to energy and healthcare, invest in farming and also build critical infrastructure such as roads.



Ajay Banga, the president of the World Bank, promised to cut down &#8220;burdensome&#8221; rules that govern lending to nations under the IDA, to make it more efficient and to deliver funds to borrower nations faster.



&#8220;We believe a simpler and reimagined IDA can be deployed with more focus to make meaningful impact,&#8221; he said.



(Reporting by Duncan Miriri; Editing by George Obulutsa and Alex Richardson)

IDA for Africa Heads of State Summit

African leaders seek record World Bank financing to combat climate change

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-820x461.jpeg" alt="" class="wp-image-481182" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024.jpeg 1600w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Borge Brende, president of the World Economic Forum (WEF). Bloomberg | Bloomberg | Getty Images</figcaption></figure>



Borge Brende, president of the World Economic Forum, gave a stark outlook for the global economy saying the world faces a decade of low growth if the right economic measures are not applied.



Speaking Sunday at WEF’s “Special Meeting on Global Collaboration, Growth and Energy for Development” in Riyadh, Saudi Arabia, he warned that global debt ratios are close to levels not seen since the 1820s and there was a “stagflation” risk for advanced economies.



“The global growth [estimate] this year is around 3.2 [%]. It’s not bad, but it’s not what we were used to — the trend growth used to be 4% for decades,” he told CNBC’s Dan Murphy, adding that there was a risk of a slowdown like that seen in the 1970s in some major economies.



“We cannot get into a trade war, we still have to trade with each other,” he explained when asked about avoiding a period of low growth.



“Trade will change and global value chains — there will be some more near-shoring and friend-shoring — but we shouldn’t lose the baby with the bathwater &#8230; Then we have to address the global debt situation. We haven’t seen this kind of debt since the Napoleonic Wars, we are getting close to 100% of the global GDP in debt,” he said.



He said governments needed to consider how to reduce that debt and take the right fiscal measures without getting into a situation where it kicks off a recession. He also motioned persistent inflationary pressures and that generative artificial intelligence could be an opportunity for the developing world.



His warning chimes with a recent report from the International Monetary Fund which noted that global public debt had edged up to 93% of GDP last year, and was still 9 percentage points higher than pre-pandemic levels. The IMF projected that global public debt could near 100 % of GDP by the end of the decade.



The Fund also singled out the high debt levels in China and the United States, saying loose fiscal policy in the latter puts pressure on rates and the dollar which then pushes up funding costs around the world —exacerbating pre-existing fragilities.



Earlier this month, the International Monetary Fund raised its global growth forecast slightly, saying the world economy had proven “surprisingly resilient” despite inflationary pressures and monetary policy shifts. It now expects global growth of 3.2% in 2024, up by a modest 0.1 percentage point from its earlier January forecast.



WEF’s Brende said Sunday that the biggest risk for the global economy is now “the geopolitical recession that we are faced with,” highlighting recent Iran-Israel tensions.



“There is so much unpredictability, and you can easily get out of control. If Israel and Iran escalated that conflict, we could have seen an oil price of $150 overnight. And that would of course be very damaging for the global economy,” he said.

107407269-1714293090268-gettyimages-1931121428-DAVOS_WEF_2024

WEF president: ‘We haven’t seen this kind of debt since the Napoleonic Wars’

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="510" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-820x510.jpg" alt="" class="wp-image-481179" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-820x510.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-300x187.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-145x90.jpg 145w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-768x478.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-1536x955.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/J4H2NTSDSNLWZN4ASKFPW2A6IA-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Workers talk on their mobile phones, as a Maersk container is transported by a train, near a port of Barcelona, Spain April 26, 2024. REUTERS/Nacho Doce/File Photo</figcaption></figure>



ABUJA, April 28 (Reuters)&nbsp;&#8211;&nbsp;Nigeria secured a $600 million investment in seaport infrastructure from Danish shipping company A.P. Moller-Maersk&nbsp;MAERSKb.CO, the presidency said in a statement on Sunday.



The investment was secured during a meeting between President Bola Tinubu and Moller-Maersk Chairman Robert Maersk Uggla on the sidelines of a World Economic Forum meeting in Saudi Arabia.



&#8220;We believe in Nigeria, and we will invest $600 million in existing facilities and make the ports accommodating for bigger ships,&#8221; the Nigerian presidency quoted Uggla as saying during the meeting.



Nigeria has promised to revamp its ports, including in the commercial capital Lagos, to ease congestion that frustrates businesses.



Tinubu said during the meeting that his government would support the modernisation and automation of its ports to improve trade, reduce corruption and boost efficiency.



&#8220;A bet on Nigeria is a winning bet. It is also a bet that rewards beyond what is obtainable elsewhere,&#8221; he said. &#8220;We need to encourage more opportunities for revenue expansion and minimize trans-shipments from larger ships to smaller ships.&#8221;



(Reporting by Felix Onuah in Abuja and Kanjyik Ghosh in Bengalulu, Writing by MacDonald Dzirutwe; Editing by Lisa Shumaker and Matthew Lewis)

FILE PHOTO: Workers talk on their mobile phones as a Maersk container is transported by a train near a port of Barcelona

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Africa needs to create a new development model that better connects its businesses with local communities in order to escape the current system which has left as it burdened by high unemployment and underdevelopment.



Current development models are a product of colonization and were designed to extract its resources with the bulk of the value realized abroad, Hippolyte Fofack, a former chief economist and director of research at the African Export-Import Bank, is a research associate at the Harvard University Center for African Studies says in a research paper.



&#8220;Connecting with history and bridging the philosophical and cultural discontinuity between Africa’s past and present is fundamental to closing the gap between actual output and potential and setting the region on the path to lasting prosperity,&#8221; he says. &#8220;More than any other region of the world, political and economic management in Africa has been underpinned by a highly extroverted model of institutional governance, by institutional models that are largely alien.&#8221;



Africa has some of the highest unemployment and poverty rates in the world led by its largest economies, Nigeria and South Africa with rates above 30 percent. Fofack says poverty is now an African problem whereas in the 1970s it was an Asian problem because Asia was able to largely preserve its philosophical and cultural heritage.



While in 1970 over 80% of the world’s poor lived in Asia, by 2000, 75% of the world’s poor lived in Africa, he says. Recent estimates would probably be higher, he adds, citing his own research and that of Tetteh Baah, an economist with the Global Poverty and Inequality Data team at the World Bank.



&#8220;This stickiness of the colonial development model amid shifting geographical patterns of trade raises serious obstacles in the quest for a more prosperous and climate-resilient future for Africa,&#8221; Fofack says.



The International Monetary Fund says sub-Saharan growth will reach 3.8 percent this year, slightly higher than the 3.4 percent attained last year, with nearly two thirds of the region anticipating higher expansion. But it still faces high borrowing costs, climate change and global external shocks it can do little about.



While the fund suggests the continent needs more support from international partners and further implementation of structural reforms to diversify funding sources and economies, Fofack argues should fundamentally rethink its reliance on multinational companies for its development.



&#8220;Only in that way can Africa’s business model be sustainable and find success in resolving our debilitating development paradox, wherein the world’s most resource-rich continent has been made to believe that it is the poorest,&#8221; he says.



&#8220;Insufficient emphasis on philosophy and intellectual leadership in Africa has caused policymaking across the region to be reduced to managing balance of payments crises, aggravated by the colonial development model of resource extraction, far removed from the desired projection into the future shaped by Africa’s history and foundational roots.&#8221;

Energy2-1

African philosophers must create new development model for continent

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-820x461.jpg" alt="" class="wp-image-480295" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/103389971-GettyImages-154793097.jpg 1920w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chris Ratcliffe | Bloomberg | Getty Images</figcaption></figure>



Elliott Management has built a roughly $1 billion stake in miner Anglo American in recent months, a person familiar with the matter told CNBC.



Anglo American shares were up 5% on the news Friday.



News of the activist’s position comes as the $43 billion, London-based miner faces takeover interest from BHP, a mining giant with worldwide operations. Anglo rejected BHP’s $39 billion takeover offer Friday morning, saying BHP’s offer “significantly undervalues Anglo American and its future prospects.”



Anglo American declined to comment. The company is one of the largest producers of copper in the world.



BHP’s bid would have called for the spinoff of Anglo American’s South African subsidiaries. The metal plays a critical role in the worldwide transition to clean energy, and is used in the manufacture of EVs and wind turbines.



Anglo American chairman Stuart Chambers noted in the company’s rejection that copper represented “30% of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products,” there was more value to be created for shareholders in the months and years ahead.



Elliott’s position was first reported by Bloomberg.



Elliott has extensive experience with mining companies, including at suitor BHP in 2017. The activist urged the company to spin off its petroleum businesses and ditch its primary listing in Australia in favor of one in London.



BHP initially rejected those proposals, before exiting the oil business in 2021. The Australian miner is one of the largest in the world, with a market cap of $145 billion and mining sales of $53.8 billion in 2023.



CNBC’s Karen Gilchrist contributed reporting.

103389971-GettyImages-154793097

Elliott takes $1 billion stake in Anglo American as miner faces takeover interest

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-820x547.jpg" alt="" class="wp-image-480263" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/KL2SFJ3TDJK6DJNAQFRO4GGFB4-1-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Nico Muller the CEO of Impala Platinum, attends the Platinum Group Metals (PGMS) Industry Day in Johannesburg, South Africa April 10, 2024. REUTERS/Ihsaan Haffejee/File Photo</figcaption></figure>



April 26 (Reuters)&nbsp;&#8211;&nbsp;Impala Platinum&nbsp;IMPJ.J&nbsp;could cut 3,900 jobs as it restructures its South African operations due to lower metal prices, the miner said on Friday, with the news likely to pile more pressure on the government weeks before a general election.



Mining companies in the world&#8217;s top platinum supplier are shelving expansion projects, closing some operations, and letting go of thousands of workers in a bid to preserve cash as some metal prices plunge.



Implats said it was resorting to jobs cuts as its cost savings, deferment of capital projects, and a voluntary severance scheme had &#8220;not sufficiently offset the impact of persistently lower prices&#8221; on the business.



Platinum is 7% down so far this year, while palladium is 10% lower since the beginning of the year.



&#8220;This has significantly undermined Implats&#8217; financial position, which in turn threatens future job security for the entire workforce,&#8221; Implats CEO Nico Muller said in a statement.



South African miners have also been impacted by a myriad of local challenges including power cuts and a crisis at the state port and freight rail company.



Job losses are hot-button issues in the lead-up to the May 29 election, where polls suggest the African National Congress could lose its parliamentary majority for the first time since the end of apartheid.



Implats&#8217; restructuring could potentially affect 9% of the miner&#8217;s workforce at its Rustenburg, Marula and the newly acquired Bafokeng operations. It also targets a 30% reduction in head office costs, the company said.



In February, Implats&#8217; rival Anglo American Platinum (Amplats) AMSJ.J announced plans to lay off 3,700 people, while Sibanye Stillwater SSWJ.J has said it will cut about 2,000 jobs in its platinum operations.



Amplats&#8217; parent company, Anglo American AAL.Lrejected rival miner BHP Group&#8217;s BHP.AX $39 billion takeover proposal on Friday, saying the bid significantly undervalued the London-listed miner and its prospects.



(Reporting by Felix Njini and Nelson Banya; Editing by Olivia Kumwenda-Mtambo and Mark Potter)

FILE PHOTO: Platinum Group Metals (PGMS) Industry Day in Johannesburg

Implats weighs 3,900 job cuts in South Africa as price rout takes toll

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="550" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-820x550.jpg" alt="" class="wp-image-480246" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-820x550.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-300x201.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-134x90.jpg 134w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-768x515.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-1536x1031.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/B25KXAJZWJJYDPDZ7LAMYMVWNE-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">File photo: Local residents walk past the Reserve Bank of Zimbabwe (RBZ) ahead of the launch of a gold coin, in Harare, Zimbabwe, July 25, 2022. REUTERS/Philimon Bulawayo/File photo</figcaption></figure>



HARARE, April 26 (Reuters)&nbsp;&#8211;&nbsp;Zimbabwe is arresting black market forex dealers they accuse of distorting exchange rates as the country prepares for its new gold-backed currency to enter circulation next week.



Two weeks ago, black market traders would openly solicit customers at street corners but constant police raids since have driven the thriving alternative forex market underground.



Zimbabwe, which launched a new gold-backed currency called Zimbabwe Gold (ZiG) in early April, dumping the troubled Zimdollar, fears that a black market which thrives on charging premiums will weaken the new currency.



While the ZiG has enjoyed stability on the formal market since its introduction, trading at ZiG 13.3 to a dollar, black market traders are already charging a 65% premium to the dollar.



Keen to establish trust in the new currency to bring down high inflation and secure a new IMF programme by demonstrating sound economic management, the government has threatened brute force to shut down the street currency traders.



&#8220;We wouldn&#8217;t want you to end up being crippled after being attacked,&#8221; Vice President Constantino Chiwenga said in a message to black-market dealers at a political gathering on Tuesday.



Secretary for finance George Guvamatanga said Zimbabwe&#8217;s treasury classifies any illegal forex dealing as money laundering.



More than 70&nbsp;black-market&nbsp;forex dealers arrested in the southern African country&#8217;s capital Harare last week have been refused bail.



&#8220;My colleague was taken in last week and that was the last we heard from him. I hear he was denied bail. It is no longer safe out here,&#8221; one dealer told Reuters.



&#8220;I don&#8217;t pick up unknown calls anymore, or entertain clients that I do not know. These police officers are coming here undercover and in plainclothes. If you entertain them, you will be gone in no time,&#8221; said another dealer.



However, economists questioned whether the police crackdown will be enough to restore confidence in the local currency.



&#8220;I think for a currency, its a matter of confidence. People need to be confident in that currency and also need sustained stability in order for them to accept it,&#8221; said independent economist Happiness Zengeni.



Zimbabwean authorities hope the new currency will help shore up an economy that has suffered severely from low commodity prices and the impact of the El Nino-induced drought.



The central bank will put new ZiG banknotes and coins into general circulation on April 30.



(Reporting by Nyasha Chingono; editing by Olivia Kumwenda-Mtambo and Mark Heinrich)

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Energy2

Africa’s future must stand on the shoulders of a new Afrocentric philosophy

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="515" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-820x515.jpg" alt="" class="wp-image-480200" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-820x515.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-300x188.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-143x90.jpg 143w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-768x482.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-1536x964.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/7TNHWIKYLBNBXEDY3W64AQTLIM-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: The Anglo American logo is seen in Rusternburg October 5, 2015. Picture taken October 5, 2015. REUTERS/Siphiwe Sibeko/File Photo</figcaption></figure>



MELBOURNE/LONDON, April 26 (Reuters)&nbsp;&#8211;&nbsp;Anglo American&nbsp;AAL.L&nbsp;rejected rival miner BHP Group&#8217;s&nbsp;BHP.AX&nbsp;31.1 billion pound ($39 billion) takeover proposal on Friday, saying the bid significantly undervalued the London-listed miner and its future prospects.



&#8220;The BHP proposal is opportunistic and fails to value Anglo American&#8217;s prospects, while significantly diluting the relative value upside participation of Anglo American&#8217;s shareholders relative to BHP&#8217;s shareholders,&#8221; Anglo Chairman Stuart Chambers said in a statement.



Reuters reported on Thursday, citing two sources, that Anglo&#8217;s management did not consider the proposal as attractive, as some investors and analysts dismissed it as opportunistic.



BHP, the world&#8217;s largest listed mining company, on Thursday offered Anglo&#8217;s shareholders 25.08 pounds per share, a premium of 31% to the market close on Wednesday, sending the London-listed target&#8217;s shares up 16%.



A condition of its proposal is that Anglo first distributes to shareholders its stakes in Anglo American Platinum&nbsp;AMSJ.J&nbsp;and Kumba Iron Ore&nbsp;KIOJ.J, both of which operate in South Africa where BHP has no assets.



Anglo on Friday said the structure on offer was &#8220;highly unattractive&#8230;given the uncertainty and complexity inherent in the Proposal, and significant execution risks.&#8221;



BHP had no immediate comment on Anglo&#8217;s rejection. Anglo shares were down 0.6% in early trading.



BHP&#8217;s shares closed 4.6% lower in Australia on Friday. The company&#8217;s Australian stock did not trade on Thursday as the country&#8217;s share market was closed for a holiday.



&#8220;With regards to a price, I think it&#8217;s pretty clear that the initial shot fired is just that. It’s just the first shot &#8211; it&#8217;s not their best and final,&#8221; said Todd Warren, a portfolio manager at Tribeca Investment Partners in Sydney, which holds shares in Anglo.



&#8220;We would need to see more money on the table before we sold our shares,&#8221; he said.



Questions about jurisdictional risks in South Africa and other regions, and concerns that Anglo American&#8217;s businesses are lower margin than BHP&#8217;s led to a share sell off, said RBC Capital Markets analyst Kaan Peker in Sydney.



&#8220;That uncertainty I think is resulting in a bit of a reduction on what investors are willing to pay for forward earnings,&#8221; Peker said.



South Africa is scrutinising BHP&#8217;s proposed offer for Anglo, a government spokesperson said, with the deal likely to concern officials the coming weeks before a general election where the governing party&#8217;s majority is at risk.



Some BHP investors also remained to be convinced over the merits of the deal.



&#8220;I am a bit surprised that the deal is not an agreed deal. It likely means BHP will need to offer more to win over shareholders and management and risks creating unhelpful animosity,&#8221; said Brenton Saunders, a portfolio manager at Pendal.



&#8220;The deal is complicated in that Anglo has a complicated structure with a number of moving parts like AngloPlats, Kumba and De Beers. It’s not clear how BHP adds value to the deal if it is required to offer considerably more.&#8221;



Consensus is growing that BHP will have to sweeten its offer to get the deal done. BHP has until May 22 to make a binding bid.



BHP CEO Mike Henry and executives including Chief Financial Officer Vandita Pant will be briefing investors next week, fund managers said. BHP did not respond to a request for comment on the meetings.



A deal, if successful, would be the largest mining takeover globally in 2024 and in the top 10 largest deals for the sector ever, according to LSEG data.



<h2 class="wp-block-heading" id="h-antitrust">ANTITRUST</h2>



Attention is shifting now to antitrust concerns, with industry sources citing regulators in key BHP customers China, for copper, and Japan and India, for steel-making coal, as potential hurdles for the deal.



&#8220;If MOFCOM acted on Glencore/Xstrata then surely it will act here,&#8221; said one resources lawyer, referring to China&#8217;s commerce ministry, who declined to be named because the subject was sensitive.



Glencore GLEN.L was forced to sell its interest in Xstrata&#8217;s Las Bambas copper project in 2013 to clear a final hurdle set by Chinese regulators for the $35 billion dollar deal.



BHP CEO Mike Henry has repeated many times in the nearly two years since Australia&#8217;s Queensland state hiked its coal royalties that the miner will not put fresh investment into its metallurgical coal business because of the lack of consultation.



That could fuel concerns around supply security for Japanese customers in particular, and cause regulators to take a close look, said Lloyd Hain of consultancy AME Group.



&#8220;The Japanese want to know long term that they are going to maintain security of supply and also volume.&#8221;



(Reporting by Melanie Burton in Melbourne, Scott Murdoch in Sydney and Clara Denina in London; additional reporting Archisma Iyer in Bengalaru; Writing by Miyoung Kim; Editing by Sonali Paul, Neil Fullick and Jamie Freed)

FILE PHOTO: The Anglo American logo is seen in Rusternburg

Anglo American rejects BHP’s $39 bln takeover proposal

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African leaders seek record World Bank financing to combat climate change

WEF president: ‘We haven’t seen this kind of debt since the Napoleonic Wars’

Nigeria secures $600 million Maersk investment in seaport infrastructure

Hotpot on the go? Why not, in these concept cars at the Beijing auto show

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Can anyone take TSMC’s chip making crown?

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African philosophers must create new development model for continent

Elliott takes $1 billion stake in Anglo American as miner faces takeover interest

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Zimbabwe pounces on illicit forex dealers ahead of new currency debut

This Dubai-based painter may have cracked the unpredictable art market

Africa’s future must stand on the shoulders of a new Afrocentric philosophy

Anglo American rejects BHP’s $39 bln takeover proposal

Why U.S. Cities Are Going Broke

News Tips

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