Miningweb Weekly: Peter Major on Anglo American; DRD; SA exploration, rare earths and bad governance

In the debut episode of Miningweb.com’s flagship show featuring inimitable Peter Major, the conversation covers topical developments of interest to investors. This week’s menu kicks off with Anglo American’s results and an aborted coal sale to Peabody and accelerates. Major spoke to BizNews editor Alec Hogg.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.BizNews Reporter.There are very few voices in mining that command attention the way Peter Major does. For decades he has been a straight-talking analyst of an industry that remains the bedrock of South Africa’s economy even as it struggles with political meddling and structural decline. In the launch episode of Miningweb Weekly, hosted by BizNews, Major sat down with editor Alec Hogg to take stock of Anglo American, the gold sector, the state of exploration, and the rare earths conundrum.Anglo American’s long shadowMajor admits he has skin in the game. He still holds Anglo American shares, not out of nostalgia, he says, but because the company retains world-class assets. The Anglo name once towered over South African business. Today it is global in footprint but far removed from its historic dominance in Johannesburg.For Major, Anglo’s legacy is one of leadership and vision. The Oppenheimer dynasty turned the company into a benchmark for generations. Ernest and Harry Oppenheimer delivered returns that outperformed global indices for 90 years. But times have changed. Duncan Wanblad, the current CEO, faces pressures his predecessors never did. Investors, analysts, even hedge funds lean on management in ways unthinkable in the past.“Timing is everything,” Major notes. Anglo shed its coal assets through the creation of Thungela at just the right moment. Hedge funds mocked the spin-off as worthless, yet Thungela went on to surge above R200. By contrast, Anglo’s aborted coal sale to Peabody risks becoming another case study in poor timing. If the dispute ends up in court, Major reckons Anglo may have the upper hand provided it can prove the mine’s damage has been overstated.Cycles and opportunitiesThe commodity cycle remains unforgiving. Copper, Anglo’s crown jewel, sits at $4.50 a pound — strong by historical standards but vulnerable to correction. Iron ore is holding above $100, a level that keeps miners profitable but leaves little upside. Diamonds through De Beers remain a wild card, with demand unlikely to lift in the near term.In Major’s view, Anglo will remain cash generative but not exciting unless copper and iron ore prices climb further. Investors should temper expectations. The Anglo story, once about endless expansion, is now one of cautious survival in a market dictated by sentiment as much as fundamentals.DRD Gold: the art of survivalTurning to gold, Major points out that DRD Gold has carved a reputation for discipline. Its results showed operating profits up 60 percent thanks to a stronger gold price, and Major believes its conservative capital allocation sets it apart. DRD works the world’s most marginal ore body — billions of tons of low-grade dumps around Johannesburg. That forces management to plan for downturns, continually refining processes and squeezing efficiencies.By contrast, larger peers like Harmony or Gold Fields often rely on acquisitions. “Nobody beats the index by buying ore bodies,” Major says. Success comes from nurturing assets and extracting value over decades. DRD’s long-serving CEO Neil Pretorius has followed that path, ensuring the company survives where others stumble.Exploration: South Africa’s missing engineHere the conversation turns bleak. South Africa’s exploration pipeline is almost dead. The reason, Major argues, can be summed up in three letters: ANC. Uncertainty, kleptocracy, and heavy-handed policy have drained confidence. Investors know South Africa is geologically rich, but without legal stability and efficient licensing, money goes elsewhere.He contrasts South Africa with Namibia, where exploration has flourished. Namibia’s oil and gas industry is now on the cusp of a breakthrough after 20 years of steady promotion. South Africa, by freezing shale gas exploration and debating how much the state should seize, squandered its moment. The result is that no one wants to spend risk capital in a country where permits can be delayed indefinitely or revoked at the minister’s whim.Rare earths: a wasted advantageIf one theme encapsulates South Africa’s squandered potential, it is rare earths. The country has exploitable deposits, from the phosphates of Palabora to the famed Steenkampskraal project in the Northern Cape. At one time Steenkampskraal was considered among the richest rare earth deposits on earth. Yet decades later it lies dormant, wrapped in uncertainty about whether the state will allow development.Major reminds us that China has cornered not just mining but also refining of rare earths. While South Africa dithers, Beijing dominates the supply chain. Investors who might once have bankrolled Steenkampskraal now stay away, fearful of policy shifts and the heavy hand of the state. “We have rare earths,” Major says, “they’re just not being developed”.Governance and missed chancesThroughout the discussion, Major returns to governance as the Achilles heel. South Africa has the skills, the geology, and the engineering pedigree to thrive. It proved as much in the 1950s and 60s when operations like Sasol pioneered coal-to-liquids and Anglo’s technologists turned complex ores into new industries. But beneficiation, the holy grail of adding value to minerals, requires capital and policy certainty. With neither in place, the industry treads water.Mining is often described as a hole in the ground into which money is poured. Done well, it generates prosperity and jobs. Done badly, it becomes a black hole sucking in capital and hope alike. For Major, South Africa is perilously close to the latter.A sobering conclusionThe debut of Miningweb Weekly is both a reminder of mining’s enduring centrality to South Africa and a warning about what is being lost. Major’s analysis blends nostalgia with hard-headed realism. Anglo American may still be a giant, DRD Gold may still squeeze life from tailings, but exploration is gone, rare earths are wasted, and governance is rotten.For investors, the lesson is stark. South Africa remains rich in rocks but poor in policy. Until that changes, the country will watch neighbours like Namibia pull ahead, while it continues, as Major put it, to shoot itself in both feet.

Miningweb Weekly: Peter Major on Anglo American; DRD; SA exploration, rare earths and bad governance

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