Action by Bush Urged : Mining Firm Takeover by South Africans Assailed
A New Jersey congressman said Monday that Minorco S.A.’s proposed takeover of Consolidated Gold Fields PLC would undercut U.S. anti-apartheid policy and asked President Bush to consider blocking the acquisition.
Shareholders of Consolidated Gold Fields, a British-based mining company with holdings in South Africa, the United States and elsewhere, voted last week to accept a takeover bid by Minorco, a holding company based in Luxembourg and controlled by South African interests.
About half of Consolidated’s revenues come from its U.S. subsidiaries, including ARC America Corp., a Newport Beach construction materials company. ARC and Newmont Mining in New York have been fighting the takeover through litigation and political influence.
Largest Mining Firm
Dozens of senators and congressmen have written letters to President Bush and, last fall, to former President Ronald Reagan urging action to halt the takeover, usually on antitrust or national security grounds. The merger would create the world’s largest gold and precious metals mining firm.
South Africa’s apartheid laws are also an issue in the merger.
Under 1986 anti-apartheid laws, American companies are prohibited from making new investments in South Africa. The law is intended to place economic pressure on South Africa to end its apartheid policies of separation of the races.
“I am concerned,” Rep. James Florio (D-N.J.) said in a letter to Bush, “that by allowing South African interests to buy U.S. firms, as will happen with Minorco’s takeover of Consolidated Gold Fields, we are undercutting the effectiveness of our country’s anti-apartheid policy.”
Florio said the 1988 trade bill gives the president the authority to block foreign takeovers of U.S. companies threatening the national security.
Security Interests
“Clearly, the Congress has already determined in the (Comprehensive) Anti-Apartheid Act that the situation in South Africa threatens the essential security interests of the United States,” Florio said.
He asked Bush for a complete investigation before the takeover is permitted to go forward.
Florio cited a General Accounting Office report concluding that South Africa’s control of the production of three strategic minerals would increase significantly if the takeover proceeded.
The minerals involved are rutile and rutile substitutes, which can be used in the aerospace industry; monazite, which is used in permanent magnets and has military applications, and zirconium, which is used in foundry operations.
Times staff writer James S. Granelli contributed to this report.
