MAC: Mines and Communities

Anglo American challenged at 2010 AGM

Published by MAC on 2010-05-01
Source: London Mining Network and others

Anglo American was challenged at its April 22 AGM in London on a range of issues including: a legacy of sickness among former miners in South Africa, removals of communities by subsidiary Anglo Platinum in South Africa and part-owned Cerrejon Coal in Colombia, a defamation case against the lawyer representing residents in some of the communities affected by Anglo Platinum, exploration activities in the Philippines, proposals for a massive copper-gold mine in Alaska, executive pay, lack of a dividend, and corporate governance.

Read on....

Anglo American challenged at AGM

London Mining Network

29 April 2010

Anglo American was challenged at its April 22 AGM in London on a range of issues including: a legacy of sickness among former miners in South Africa, removals of communities by subsidiary Anglo Platinum in South Africa and part-owned Cerrejon Coal in Colombia, a defamation case against the lawyer representing residents in some of the communities affected by Anglo Platinum, exploration activities in the Philippines, proposals for a massive copper-gold mine in Alaska, executive pay, lack of a dividend, and corporate governance.

Outside the AGM, War on Want staged a protest - see report and photo at For the information handed to shareholders as they entered the meeting, see the end of this report.

Report on the Anglo American AGM

22 April 2010


This was the first AGM chaired by Sir John Parker, who became Chairman of the company in September 2009.

The presentations given by Sir John Parker and Chief Executive Officer Cynthia Carroll are reproduced in full at

Below are some extracts from their speeches, with comments.

Sir John Parker was obviously worried about the impact of protests against the company's joint venture with Northern Dynasty around Bristol Bay, Alaska, from Indigenous communities and commercial and sport fishing organisations. A critical article had appeared in British newspaper The Observer the previous Sunday (See and a large advertisement criticising the project in the Financial Times the morning of the AGM. (However, a delegation from Alaska had been unable to travel to London because of the eruption of the volcano in Iceland which had led to flight cancellations, and in fact only one Indigenous representative from Alaska, already in Europe before the eruption, had been able to come to the AGM.) Sir John Parker finished his opening remarks with the following comment.

"Finally, to any visitors from Alaska... ... Your concerns involve a very early-stage project in which Anglo American has an interest. I'm sure there will be questions that you will wish to pose, but I would like to say now that, although I have not yet had the chance personally to visit the project, I do understand the concerns and interests that the Pebble project arouses and appreciate the different points of view presented. We have made it clear that the project will work on the basis of world class scientific and engineering skills and that we will use inclusive and innovative stakeholder engagement. Our bottom line remains that, if the project cannot be designed in a way that provides the proper protections for Alaska's fisheries and wildlife, or to the livelihoods of Alaskan communities, then it shouldn't be built. It is on that basis that we will continue to evaluate the project in full compliance with the prescribed regulatory processes in Alaska and the United States."

[NB Rio Tinto is a minority shareholder in Northern Dynasty Minerals.]

Cynthia Carroll boasted of success in cost-cutting, including cutting the company's total work-force by 23,400, which will not be good news to those workers or their families.

She also said: "The strategic review also identified businesses no longer core to our future: we will divest our zinc assets, Scaw Metals, and phosphates and niobium businesses, together with Tarmac. ...The target we set was $2 billion of savings by 2011. We are on track for that, and have in fact restated our target upwards. We will now deliver that $2 billion just from our core portfolio - so it doesn't take into account any contribution from businesses to be divested. In 2009, we generated more than $1.6 billion of savings, ahead of expectations."

But she also spoke of new investment: "We've provided strong support to the re-capitalisation of both Anglo Platinum and De Beers in recent months. ... We will invest $4.2 billion in new projects this year, out of a total planned capital expenditure for 2010 of $6.0 billion. To mention just two of these: the Barro Alto project in Brazil will produce around 40,000 tonnes per year of nickel, starting in the first quarter of 2011. It's on budget, and it's on schedule. Life of mine production costs will be around $3.70 / lb, and that compares to today's nickel price of close to $12 / lb. In Chile, the Los Bronces copper expansion project is also on track and on budget and will start production in the fourth quarter of 2011. It will produce 370,000 tonnes per year of copper at the outset, and the cost per pound will be 80 cents over the life of mine - compared to a current copper price of over $3.50 / lb."

On worker safety, she said: "In 2009 we achieved a 55% reduction in fatalities compared to the start of 2007. And we reduced our lost time injury frequency rate by 52% over the same period. In the first quarter of 2010, fatalities were 67% lower than the same period last year. We shall work to reduce accidents still further and we are relentless in striving to achieve our goal of zero harm. This is a priority in Anglo American. ...

She stated that the company is "committed to environmental stewardship and minimising the environmental impact of our operations. Our sustainable development agenda progressed on several fronts during the year. One of the key elements of our strategy is the management of water: we have to find ways of using water more effectively in the communities and catchment areas where we operate. Effective water management systems are now in place across all of our operations. ... Last March, we launched the Anglo Environment Way (AEW). It sets out a consistent approach to responsible environmental management, supporting our vision for minimising harm to the environment by designing and operating all of our operations in an environmentally responsible manner."

Finally, on worker health, she said: "As for health, we've been dedicated to the issue of fighting HIV and AIDS since the 1990s - over 80% of permanent workers in South Africa now regularly test for HIV each year - and in 2008 we extended our policy commitment to include the dependants of our employees."

Commitment to the health of workers and their families is to be expected as a minimum rather than applauded as a particular gesture of good will on the part of the company. But the commitment does not appear to extend to the health of former workers who have developed silicosis or tuberculosis as a result of their work and as a result are no longer working for the company. This issue arose in the first of the questions on the annual report.

Silicosis and tuberculosis among former gold miners in South Africa

The first question was from former gold miner Alpheos Blom, from South Africa. Speaking through his interpreter, he presented the following statement.

"My name is Alpheos Blom. I arrived in London at 5am this morning. This is the first time I have been out of South Africa. It was my first trip on a plane. I am 48 years old. I am a former gold miner. I worked at Anglo's President Steyn mine in the Free State for 17 years from 1984 to 2001. I worked as a loader and a loco driver. I loaded freshly blasted rocks onto a machine and drive them through the mines. I have a very serious form of silicosis called Massive Fibrosis. I also contracted TB because of this. I developed this disease because of breathing too much dust from the mine.

"Silicosis is an incurable lung disease. I feel breathless all the time, I get tired easily and am in pain.

"The gold mining industry knew that thousands of gold miners were contracting silicosis each year. They knew that there was too much dust. Myself and the other miners I worked with were never given masks despite asking. Instead we would make our own by stealing bandages, these obviously did not work. We should have been able to wash our overalls every night and use showers in order to reduce the amount of dust we inhaled. But although white miners were given access to onsite showers and change rooms black miners were not provided with either of these things.

"As a result of my bad health I am unable to work and yet I have received no help from Anglo American South Africa, a company you own and for which I worked for 17 years. I am one of thousands of former miners in the same situation. Black miners were exposed to much higher levels of dust and therefore have a much higher risk of contracting silicosis. It is estimated that 25% of black miners from President Steyn mine contracted silicosis; this percentage applies to black miners in other gold mines. The industry employed half a million South African miners. This might give you some idea of the scope of this disaster.

"Miners who have silicosis also have a much higher risk of contracting TB because their lungs are damaged. Many miners have returned to their homes in places such as Eastern Cape and Lesotho where there are no clinics to diagnose and treat silicosis. They become very sick and many have died. Communities in these areas have been devastated. The industry knew about this for decades but simply washed its hands of ex-miners.

"I am part of a group of former miners who are suing Anglo American South Africa for failing to advise its gold mines on how to protect miners against excessive dust exposure. If our claim is successful it could lead to thousands more people coming forward. This case could help my quality of life however I worry that I may die before it is over. I would like to see a compensation scheme put into place now for silicosis victims, I would also like to see your company put into place a system for monitoring silicosis and TB and treating it promptly. Will you help us?"

Sir John Parker thanked Alpheos' interpreter, mistaking her for his wife and referring to her as "Mrs Blom". He said that the company is very sympathetic to the plight of the former miners but that as there is a case against Anglo American South Africa the proper place for comment is in the court in South Africa. He said that Anglo American is working with unions, government and industry to find practical solutions to the problems former miners in rural areas find in accessing medical care.

Sir John Parker did not comment on why it was that so many decades have passed since the mining industry has been fully aware of these problems, without effectively addressing them, or why it is that a company able to pay its executives and managers so generously is unable to compensate the miners whose work has created its enormous wealth and whose health has been wrecked in the process.

Anglo American has lost its way

A Mr Franklin, who said that he had been a shareholder for 44 years, said that the company had lost its way, unable to pay a dividend to shareholders while other big mining companies had been able to do so. It had slipped from number two on the list of world mining companies to number four.

Anglo American's withdrawal from the Philippines

Andy Whitmore, of LMN member group PIPLinks, congratulated the company on quitting the Kalayaan project in the Philippines, partly as a result of community resistance. But he said that the company still appeared to be proceeding with the Connor Apoyo Project, despite community opposition. Two Philippine representatives had attended the 2007 AGM to voice this opposition. The company had agreed to an open meeting with the community but nothing had happened since.

Sir John Parker said that criticism had indeed been voiced in previous AGMs, that the company was currently not involved in any exploration activity in the Philippines and that it was in the process of exiting all its projects there. He asked Hugh Elliott, International Government Relations Manager, to confirm this, and Hugh Elliott confirmed that the company was in the process of exiting all its projects there.

Free Prior Informed Consent of Indigenous Peoples

Andy Whitmore asked a further question about Indigenous rights. He welcomed the fact that company policy recognises the special status of Indigenous Peoples but pointed out that the bottom line established by the UN Declaration on the Rights of Indigenous Peoples is Free Prior Informed Consent (FPIC). He offered to arrange a meeting between the company and representatives of Indigenous Peoples to discuss making FPIC operational. Sir John Parker thanked him for the "civil request" and invited him to speak to Hugh Elliott about it.

"The unacceptable face of capitalism"

A shareholder said that Anglo American represented the "unacceptable face of capitalism" because its CEO had received a significant bonus while shareholders had received no dividend. He noted that page 85 of the company's annual report stated that Cynthia Carroll's bonus had increased to £372,000 and her total compensation package had increased to £1.6 million. She was also able to keep her earnings as a non-executive director of BP. This, he said, was different from Legal and General [which in August 2009 was the second biggest investor in Anglo American], which had cut but not abolished its dividend, and where no executive had received a bonus in the past year. Sir John Parker defended Anglo American's levels of executive pay as being necessary to retain the services of effective people. He said it was important to "reward executives on a proper basis". The company was committed to restoring the dividend as soon as possible. The company had not asked shareholders for more money, as other companies had done, and which had enabled them to hand part of it back as a dividend.

Communities and workers around the world affected by Anglo American's operations might perhaps take the view that if Anglo American is "the unacceptable face of capitalism" it may primarily be for reasons other than the current lack of a dividend for shareholders, or even the level of executive pay and bonuses.

Share buybacks

A representative of the UK Shareholders' Association said that share buybacks had been illegal until 1987, with good reason. He criticised the company's continuing willingness to use them. He also attacked the company's expenditure on electronic voting devices at its AGMs while it served only water and fruit juice to shareholders after the meetings. It is interesting that, while shareholders had made no response to Alpheos Blom's harrowing account of suffering as a worker, there was applause at the suggestion that shareholders should receive better drinks after company AGMs. Sir John Parker defended the use of electronic voting devices as an aid to transparency.

Metallurgical coal in Australia

Another shareholder asked if the company would buy the McArthur Coal Mine in Australia. Sir John Parker said at present it would not. He said that metallurgical coal is core to the company's activities and that it would develop a number of other coal projects in Australia.

De Beers

The same shareholder asked whether De Beers would be made a non-core part of Anglo American's operations. Sir John Parker replied that it would not.

Merger with Xstrata

The same shareholder referred to Xstrata's proposed merger with Anglo American. Sir John Parker said that the board was very wary of big mergers, which were as likely to destroy value as to create it.

Commodity prices

Another shareholder suggested that volatile commodity prices were unhelpful. Sir John Parker agreed. Cynthia Carroll said commodity prices were being largely driven by Chinese demand, and gave a long talk noting that the company was very optimistic about prices in the short and mid-term.

Pebble Project, Alaska

Verner Wilson III, from Bristol Bay, Alaska, said that Bristol Bay is the world's largest remaining wild salmon fishery. He thanked Cynthia Carroll for coming to visit Alaska. He said that Anglo American is partnering in the proposed Pebble Project in the headwaters of salmon streams feeding the bay. The fishery is worth about $400 million and there is tourism as well. Verner Wilson said that his people depend on the fishery for income, food and the maintenance of a tradition dating back seven thousand years. He said that his people have concerns about the project. Pebble has already violated water permits during exploration. It is a very risky project. The fact that the company has violated permits during the exploration phase means that people cannot trust the company's assurances about the future. Verner said that his people would fight to protect this resource. The UK is the largest importer of canned wild salmon from Bristol Bay. Cynthia Carroll had made a promise last year that if local people did not want the project, the company would not go ahead with it. 80% of people in the area are opposed to the project and 100,000 Americans have signed a petition against it. The fight against it will be national. Verner urged Anglo American to divest from the project.

Sir John Parker said that he was sorry that rest of the Alaska delegation was unable to join Verner in London. He said that the Pebble project is a 50/50 partnership with Northern Dynasty Minerals. The partnership was formed in 2007 and is based in Anchorage, Alaska. The deposit is primarily copper, but other minerals are present. There is no operating mine. The project is at pre-permitting stage. It is not expected to apply for operating permits for some time. It is not located in a protected area (although, he said, from the statements of the project's opponents one could be forgiven for believing that it was). It lies on state land designated by democratic processes for mineral exploration and development. Alaska has designated land for mining and there have been two referenda about it. There are 174 million acres of protected area in Alaska. Bristol Bay covers 40,000 square miles, and the Pebble project would cover one twentieth of one per cent of this. But it does, he said, lie on land on which there is no current industrial activity. The Chief Executive of the Pebble partnership understands the significance of water and salmon. So over the past six years Anglo American and Northern Dynasty have invested $130 million in environmental and social studies, building up the largest database of facts on any project in Alaska's history. The permitting process will take three years and during this time local people will be able to check the facts and make their objections known, should they have any. It is not just a decision for Anglo American but also for the Alaskan authorities. The permitting process involves eleven different federal and state bodies. There is a huge process before a decision cane be made to mine or not to mine. People need to decide on facts, he said, not on rhetoric or misinformation. The Chief Executive John Shively is committed to working with local people, and not all local people are opposed to the project. Alaska has a huge and proud mining record. There are already three major mining operations in the state, and they have never had a major environmental incident. Anglo American is looking at the leaching risks of every tailings dam it owns across the world, and it has an excellent record. He said that both he and Cynthia Carroll intend to visit Alaska.

(See also the report in the Independent at

Corporate governance

One shareholder questioned the independence of two "independent" directors, who had been on the board for fully nine years each, the maximum permitted by the combined code of corporate governance. Sir John Parker pointed out that they were both retiring at this AGM. The shareholder said that the combined code said that where there were departures from recommended practice, they should be explained in writing to the shareholders. Although this matter had been explained at AGMs, there was no explanation in the annual report. Sir John Parker agreed that this was the case.

Expenditure on the Pebble Project

Another shareholder questioned why, if there was not a strong chance of the Pebble Project going ahead, $130 million had been spent on preliminary studies and asked the value of the deposit. Sir John Parker assured him that the company believed that the value of the deposit justified the expenditure and noted that it was not unusual to spend significant sums in advance when several billions may be invested in a project. This was simply part of doing business.

The Cerrejon Coal Mine in Colombia

Richard Solly, from LMN member group Colombia Solidarity Campaign, said that he was concerned that Cerrejon Coal, in which Anglo American has a one-third share along with BHP Billiton and Xstrata, had developed a kind of institutional ‘rigor mortis' with regard to community relocations. An Independent Panel of Inquiry into Cerrejon Coal's operations had made a number of recommendations, accepted by the company, about the treatment of communities required to move as the mine expands. Company officials continually assured critics of the company's good intentions, but community members continued to complain that the company was not negotiating with them in good faith. Planned meetings would be cancelled at short notice; some community members would be informed, others not, causing anger and divisions within the communities. Timetables for relocation would be published on the company's website without consultation with the communities. There was disagreement about the quantity of land and the design of houses in the relocated settlements. Cerrejon Coal was not even fulfilling the basic requirements of the World Bank's Operational Guidelines on Involuntary Relocation, which established that where small farming communities were relocated they should be provided with agricultural land of equal or greater value from that which they were being required to leave. What would Anglo American do to ensure that Cerrejon Coal lived up to its responsibilities to the communities facing relocation?

Sir John Parker noted that Richard had rightly referred to a third party investigation, which was commissioned partly because of the complaints that Richard had brought to the AGM. The third party panel had not found any evidence of direct abuses, but had made a number of recommendations to Anglo American as one-third shareholders in the project. The company had taken on board these points and would actively pursue the issues as it wanted to move forward on this as quickly as it can. As to more specific points he then linked up over the telephone with the operational manager responsible, speaking from the United States. The connection was a poor one, but as far as could be heard, he noted that the company shared the frustration at the slow pace of relocations. However, they were working as fast as they could while striving to maintain community relations. They had bolstered management to speed things up and to get it right on community relations. The obligations are being met in the main, and issues are either under discussion or in progress. Anglo American is committed to the process and working on relocations.

Richard responded that people were losing their livelihoods while these delays continued, including as a result of the recent impoundment and death of cattle within the mine lease area. Sir John Parker expressed concern about this matter.

Anglo Platinum in South Africa

Nick Hildyard of LMN member group The Cornerhouse said that it was right to stress the importance of good community relationships in developing growth, citing the Annual Report. He said that his question concerned Anglo Platinum in South Africa and that he understood that nine people in the community of Sekuruwe were in the process of suing Anglo Platinum, among others, challenging the alleged consent that was supposedly granted by the community for a lease agreement between Anglo Platinum and the Minister of Land & Rural Development for the Blinkwater Farm. This land was used for ploughing fields, grazing and burial sites for the Sekuruwe community and others. This is apparently the same land where graves were removed and reburied without proper consent. He said that he had been told that the South African Heritage Resources Agency is currently investigating the way graves were removed and the lack of remains in some of the new graves. Nick asked how the company, collectively, had allowed this conflict to spiral out of control in this way. How much confidence could people have that the company would get it right at Pebble Bay, as executives were claiming that they would? Rather than addressing the issues in this case, Anglo Platinum is suing the lawyer, Richard Spoor, who is representing communities in an attempt to get redress. This lawsuit, for defamation, is rooted in the company disputing some of the facts that Richard Spoor relies on. Will the company rely on lawsuits to attack those in Alaska with whom it disagrees on facts? Is it in the company's best interests to have a three week, high profile lawsuit in South Africa in which the facts are disputed? Has the company heard of the McDonald's libel lawsuit against campaigners in London?

At one stage, Sir John Parker invited Nick Hildyard to make his point more quickly, but Nick declined, saying that he preferred to go at his own pace.

Sir John Parker said that he would not comment on the defamation case. He said that if the company believes that someone has "engaged in defamatory behaviour" it is the company's duty to tackle it. He said that resettlement is difficult and that the company is committed to correcting any mistakes it has made. He said that the vast majority of people whom Anglo Platinum needs to relocate have moved to new villages. Only 64 families out of over 900 have refused to move. The company is working with the South African authorities to achieve a satisfactory outcome.

Mary-Jane Morifi, responsible for Anglo Platinum's community relations in South Africa, commented via a telephone link on the legal case brought by the Sekuruwe community. She spoke extremely rapidly, making accurate note-taking impossible. Anglo American has discontinued the practice of making transcripts of its AGMs available on its website, possibly because of the volume of criticism that it has attracted during those meetings. Readers are sadly thus deprived of the possibility of reading Anglo Platinum's defence of its relocation programme and its response to the legal case brought by members of the Sekuruwe community. It is interesting to note that although Sir John Parker was unwilling to comment on two of the three legal cases on which he was directly asked to comment, the Anglo Platinum spokesperson was happy to comment at some length on the third such case.

Anglo American plc



Anglo American's wholly owned subsidiary Anglo American South Africa Ltd is being sued in South Africa by former gold miners suffering from silicosis, on the grounds that the company negligently advised its gold mines with respect to protection of miners against excessive dust exposure.

Silicosis is lung disease caused by dust. South African miners were exposed to high dust without respirators. Black miners were exposed to higher dust levels than white miners. Between 250,000 and 500,000 miners were employed in South African gold mines during the 20th century. During apartheid mines relied on "migrant labour" from South Africa (e.g. Eastern Cape and Free State), Lesotho and neighbouring states e.g. Botswana and Malawi. The test case claimants are from the Free State, Eastern Cape & Lesotho.

A 2008 study focused specifically on former miners from Lesotho who had worked at the President Steyn mine found a rate of silicosis of 24 percent. The rate of TB was also very high. This was consistent with previous studies on black gold miners, which found rates of around 25 percent. Experts estimate that tens of thousands of miners contracted silicosis in South African gold mines. Miners with silicosis also have a much increased risk of contracting TB for the rest of their lives. This additional risk has been recognised for decades. Silicosis can take from 10-30 years to develop after exposure. A large proportion of miners only develop silicosis and TB after they have left the mines and returned to their communities. Because of rudimentary or non-existent medical services in rural areas, ex-miners frequently contract silicosis and TB which is undiagnosed and untreated, resulting in serious lung damage and death in numerous cases. Ex-miners in Eastern Cape and Lesotho, for instance, have been decimated by dust-related lung disease from gold mining.

The industry has been well aware of this for many years but washes its hand of ex-miners, and makes no medical or financial provision for them. Anglo American was the largest gold mining group. Anglo American PLC was formed in 1999, whereupon it acquired the Anglo gold mining business formerly headed by Anglo American South Africa Ltd. The claim alleges that Anglo American South Africa Ltd negligently failed to advise the mines properly to take measures to protect miners against excessive dust exposure.

The primary object of the test cases is to establish the legal principles on which miners should be compensated for silicosis and silico-tuberculosis. A further objective is that the industry should establish a medical monitoring scheme to ensure that ex-miners are diagnosed and treated for TB speedily and effectively. This could be achieved by injection of resources into the existing state system.

If Anglo American plc is committed to corporate social responsibility, it should (a) establish a compensation scheme for silicosis victims; (b)co-operate in alleviating further suffering by ensuring that ex-miners are monitored for silicosis and TB and treated promptly.

Elsewhere in South Africa....

· Anglo American is benefitting from 'sweetheart' deals with power generator Eskom which threaten to cause hardship for low-income citizens. (1)
· Despite the company's efforts to reduce worker deaths, especially at its South African deep mines, it still has a high rate of work related fatalities. (2)
· Communities in Limpopo are in conflict with Anglo American over its subsidiary Anglo Platinum's programme of removal of villages for mine expansion. Conflicts include complaints over loss of agricultural livelihood through inadequate access to good quality farmland without creation of sufficient mining jobs to compensate, and allegations of desecration of ancestral graves. Lawyer Richard Spoor, who has represented some of the communities involved, is being sued for defamation by Anglo Platinum. (3)

Elsewhere in the world ...

· Anglo American has a 50% stake in the Pebble Mine copper gold and molybdenum project in Alaska, which is opposed by a coalition of Native communities and commercial and sports fishing organisations. (4)
· Anglo American's De Beers subsidiary has been criticised for the level of influence it has over government and economy in Botswana, its environmental record and its attitude to Indigenous Bushmen communities. (5)
· Since 2000, Anglo American has been involved in the massive opencast Cerrejon coal mine in northern Colombia. Since early 2002, Anglo American has been a one-third owner of the mine (along with London-listed BHP Billiton and Xstrata). The mine has a history of forced relocation of communities. The current owners have pledged to address this legacy and improve the handling of involuntary relocations. But an agreement made in December 2008 with residents of one destroyed village, Tabaco, remains stalled, and negotiations with other communities facing relocation drag on while communities suffer loss of livelihood and complain of health problems caused by coal dust. Community leaders allege that the company is not even fulfilling the basic guidelines laid down by the World Bank and that its critics have received death threats from persons unknown. Workers at the mine complain that the Cerrejon Coal company avoids paying adequate social security contributions to compensate for the dangerous nature of their work and that subcontracted workers are denied basic union rights. (6)

For further information, contact:

London Mining Network:,, 07929 023214

War on Want:,, 020 7549 0555


(1) See
(2) See
(3) See
(4) See

(5) See
(6) See (notes involvement of BHP Billiton, owner of another one-third of Cerrejon Coal, but applies equally to Anglo American)


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