Newmont, 3 British Firms Plan Withdrawal From South Africa

A rash of divestiture has hit South Africa this week as four major foreign companies, including Newmont Mining, announced plans to pull out against a background of international outrage at Pretoria’s crackdown on the black opposition.

New York-based Newmont, a big gold and natural resource producer, said it would sell its interests in four South African firms, including companies that produce zinc, copper and vanadium. Newmont said the sales, which it expects to be completed by April 30, are part of a restructuring program and part of an effort to reduce interest expense.

State-owned British Steel and two other British firms--packaging giant Metal Box and BET, an international services company--also announced plans to sell their assets and withdraw.

The new divestiture activity coincided with international condemnation of a South African military raid into neighboring Botswana and the killing in Paris of a representative of the African National Congress, the largest group fighting against white minority rule in South Africa.

The Pretoria government has denied any involvement in the Paris killing.

The international outcry has grown since Pretoria last month banned 17 black dissident groups, worsening its conflict with anti-apartheid churches representing about half of the country’s 32 million people.

Public Warning

South African business leaders said the crackdown revived a campaign in the U.S. Congress for more punitive economic measures against Pretoria and put pressure on President Reagan and British Prime Minister Margaret Thatcher to abandon their long-held opposition to economic sanctions against South Africa.

“The question arises as to how long the U.S. will maintain this internationally unpopular position after a change of president, . . . if there are further security actions by our government, domestically or in the region,” said Harry Oppenheimer, South Africa’s most eminent businessman and former chairman of the giant Anglo American and De Beers corporations.

Oppenheimer’s warning in a public speech came shortly before the South African raid into Botswana and two separate clashes with alleged ANC guerrillas near South Africa’s borders with Botswana and Zimbabwe in which 11 people were killed.

His remarks preceded a time when the question of U.S. corporate activity in South Africa will be at the forefront as shareholder proposals on South Africa are voted on during the large number of corporate annual meetings to be held in April and May.

International Business Machines, which sold its South African subsidiary last year, said Tuesday that it is opposing a shareholder proposal that it cease all sales to the former unit, now owned by local employees. Chevron has said it is recommending that shareholders vote against three stockholder proposals regarding withdrawal of operations in South Africa.

Complex Reasons

Three of the four firms that joined the corporate exodus from South Africa this week cited commercial rather than political reasons. Political analysts say, however, that the real reason for the wave of divestiture is a mix of political and economic factors coupled with pressure by anti-apartheid activists and shareholders, particularly in the United States.

“The full explanation stems from a complex calculation involving assessment of the current profitability of the South African economy, its future prospects, given the exacerbation of its political crisis, and the public and shareholder resistance to companies in South Africa,” the British Anti-Apartheid Movement says in a report due to be published next week.

Twenty percent of the British companies operating in South Africa have withdrawn over the past two years, reducing the number still here to 235 from 297. Total British investment, which accounts for about 40% of all foreign investment in South Africa, fell from the equivalent of about $11 billion in 1980 to about $5.6 billion in 1986.

About 140 U.S. companies have pulled out of South Africa during the past three years, citing anti-apartheid pressure and the unfavorable political and economic climate, according to the Investor Responsibility Research Center in Washington.

Japan, which in 1986 supplanted the United States as South Africa’s biggest trading partner but has no direct investment in the country, is also under pressure to scale back its business involvement.