€43bn mining giant to break up

Mining giant Anglo American was today said to be preparing to break itself up.

The €43bn heavyweight has reportedly appointed investment bank UBS to start the process with either the sale or demerger of its packaging business Mondi.

And according to the Sunday Times, Goldman Sachs are working on the disposal of Anglo American’s 51% stake in Anglo Gold, while Citigroup has been appointed to sell the 79% share of South Africa-based Highveld Steel.

Investors are expected to press for the sale Anglo American-owned Tarmac following the first round of disposals.

They are also said to be keen that Mondi – which is worth €4.3bn – is listed on the stock market in London where it would qualify for a place among the UK’s elite stocks in the FTSE 100 Index.

The City has welcomed the news and it is thought that the sale process could be completed within six months.

Seymour Pierce analyst Charles Kernot told the Sunday Times: “We have heard a lot of talk from the company and we have been waiting for things to happen.

“This is now a clear sign that it is gearing up for action in 2006.”

Any rapid sale of Anglo Gold would be at the top of the current gold bubble for Anglo American.

Gold prices hit a 25-year last week, rising to 551.65 US dollars an ounce on Monday as geopolitical tensions in the Middle East mounted and reports suggested that that China may increase its reserves of the metal. Gold prices closed at 547.25 US dollars an ounce on Friday.

Potential buyers of Anglo Gold are said to include America’s Newmont Mining and Barrick Gold of Canada, which is buying Placer Dome for $10.4bn (€8.6bn) to create the world’s biggest gold producer.