Battlefields of Gold

PREFACE

PREFACE

THIS IS THE story of 25 years in the life of a gold mining company – a mere blink in history’s eye. Yet it is a period so rich in drama and incident that it is almost as if a lifetime and more has been compressed into it.

It is not, however, a conventional company history. Company histories tend to sanitise the past, glossing over blips and modifying the bumps. Thanks to the decision of the people who commissioned this book, it is licensed to be a ‘warts and all’ account. I can’t guarantee that I have succeeded in that, but I can guarantee that I have tried. And I can confirm that not one word of it has been changed simply to protect the company’s image. For better or worse, the attempt at a balanced account is my own.

It’s no secret that official company announcements often conceal as much as they reveal. In writing the story of a major company, therefore, there is one rule of thumb for a writer: the more bland the official announcement, the more likely it is that it is hiding something. Some human drama, perhaps, or boardroom battle, or clash of personalities.

This is not cynicism but simple realism. Nobody expects a great enterprise to wash its dirty linen in public. The object of official statements is to inform people, not titillate them. It is not necessary to record that some new development was pushed through the board over the dead bodies of several directors. Nor is it necessary to add the words ‘good riddance’ to a warm valedictory message for some departing employee.

Not necessary at all – but that is to eliminate half the excitement and much of the truth of what really happens in the necessarily ruthless world of Big Business.

The exercise has been made more intriguing by three things: the fact that many company records predating the year 2000 have disappeared; that human memories are fallible; and that people’s perceptions of themselves nearly always differ from the perceptions of others. Sometimes the chasm is a mile wide.

I have made no attempt to reconcile contradictory views. Readers can draw their own conclusions. Perceptions become reality even when they are not correct. They colour decisions and have a profound influence on the direction of a business enterprise. Every step away from a previous path represents, by definition, a rejection of an old idea. It cannot help but be controversial.

There is a final reason why this is not a conventional company history. Time will provide an ultimate judgment on whether Gold Fields has secured its future for another hundred years. Too much is too recent for sweeping conclusions at the moment.

But some facts are clear, even now. The company is determined to succeed. Its leadership believes it is on the right track. There is a discernible vigour in its actions and its recent annual reports present an optimistic face. As ever, it gets its vitality and sense of purpose – its weaknesses and strengths too – from the interplay between strong characters in leadership positions. Strong leaders clash; it has always been thus.

Paradoxically, progress requires harmony and team spirit on the one hand; conflict and contestation on the other. Both ingredients are crucial. The jury of history will decide whether the formula has worked. But it looks promising.

BETWEEN February 1987, when Gold Fields celebrated its centenary, and February 2012, when a considerably different company with much the same name celebrated its 125th birthday, the face of the world changed. The Berlin Wall came tumbling down, international boundaries disappeared, political philosophies died, the Cold War ended. A new (and somewhat shaky) United States of Europe emerged to challenge, tentatively, the hegemony of the United States of America. The rise of the Asian Tigers tilted the balance of global economic power. The sleeping giant of China began to stir. The continent of Africa took its first halting steps towards democracy and participation in an emerging global village. International economies lunged from recession to prosperity to global meltdown. And the rising gold price signalled dramatic economic changes.

It was as if the world abandoned its past with a single shrug to begin anew. Old threats disappeared and old loyalties died, only to be replaced by undreamt-of new terrors, alliances and opportunities.

The face of South Africa changed. Apartheid disappeared overnight though its legacy clung stubbornly. International audiences watched engrossed as the country attempted what many saw as the impossible: a nearly bloodless revolution. History could find scant record of a country where a ruling minority had relinquished power voluntarily. It brought its own triumphs and torments. Democracy turned out to be both deeply satisfying and deeply unsettling. There was reconciliation and tension; relief and frustration. Yesterday’s politicians disappeared with yesterday’s policies, to be replaced by politicians of a different hue and contrary agendas. Amid the inevitable turmoil of change, only one thing was crystal clear to all.

The old South Africa had gone forever.

The face of business and industry changed. Closed doors opened. Phrases and buzzwords hardly known to a previous generation crept into the official lexicon: affirmative action, black economic empowerment, equal opportunity, racism. Labour flexed new-found muscles. Men abandoned ties and suits and ultra-formality. The glass ceiling that kept women out began to lift, though not nearly fast enough.

The face of mining changed. The mining empires that clustered on the Witwatersrand had seemed impregnable for more than a century; fortresses against ill-fortune. When GFSA celebrated its centenary with unconcealed optimism, seven great gold mining companies dominated not just South Africa’s economy but that of much of the globe; household names like Anglo American, Anglo-Vaal, Rand Mines, Union Corporation, General Mining, Gold Fields. Their designated meeting ground was the Gold Producers Committee of the Chamber of Mines. Here they sat in conclave to settle the direction of the industry and the prosperity of a nation, displaying a collegiality that was not always apparent in their business encounters.

By 2012, a scant quarter-century later, the scene was unrecognisable. South Africa was no longer the world’s largest gold producer. New finds in other places were shifting the balance. Of the seven great gold mining houses, the most powerful of them all – Anglo American – had abandoned gold. Other big names had been swallowed up by mergers, takeovers and attrition. Only one mining house remained in something like its old form. Even then, critics said it was no longer Gold Fields but an imposter in Gold Fields livery. Was the accusation justified? We shall see.

In any event, the working environment had changed so much that it hardly mattered. Competition at home and abroad had become more intense; acquiring mining rights more problematic; keeping labour satisfied more difficult; abiding by new constraints more demanding. Searching for new sources of gold became as important as mining established ore bodies. Existing mines grew deeper as gold became more elusive. The face of danger changed too because the seething centre of the earth is a far more hostile place than its surface.

One change, in particular, was both significant and almost imperceptible. The very nature of the mining industry changed. South Africa began to lose its dependency on gold as it increasingly acquired the trappings of a modern state. Gold was still important but it was no longer central to survival. The power that the old mining barons once wielded by virtue of their control of the only real source of wealth in South Africa gradually eroded. Today mining is recognised as an important money-spinner for government – but not the only one. The balance in the country is all the better for that.

Weaving its way through the rich tapestry of mining life is the inside story of a fiercely competitive association. To call the long-standing relationship between Gold Fields of South Africa and the Anglo American Corporation a love-hate relationship is to reduce it to an absurdity. Emotive words like ‘love’ and ‘hate’ have no place in a businessman’s lexicon. Words like ‘suspicion’ and ‘respect’ and ‘mistrust’ and ‘mutual dependence’ seem more appropriate, and convey better the tensions that arose between these two giants of the gold mining world as circumstances forced them to work together almost as often as they dragged them into rivalry and confrontation. So they knew harmony in their lives, but when they fought, they fought like tigers.

FOR South Africa’s most historic gold mining company, Gold Fields, the last quarter-century has meant a roller-coaster ride that took it from high drama to low intrigue in breathtaking swoops. The mother company survived two desperate takeover bids in the 1980s and, 30 years later, its South African offspring fought for its life in a battle that made world headlines. Both companies spent money in Monopoly sums to secure their future and outgun their rivals.

In this blink of a historical eye, Gold Fields experienced underground tragedy and the elation of the country’s biggest and most successful mine rescue. It discovered the triumph of long-term investment and the mortification of a massive gamble going awry.

It learnt, the hard way, how to cope with treachery and deception, and how to return the compliment. It survived a merger that brought with it long knives, retrenchments and bitterness. It faced 4 000 angry workers marching on its headquarters and an outbreak of sabotage and arson underground. It not only embraced the South African miracle of transition but contributed to it too, in ways small and big.

Above all, it learned to survive in good times and bad, no matter the odds or the adversary. In the process, it demonstrated why boardroom battles are intrinsically exciting and Big Business is indeed a last frontier for the modern adventurer.

As it entered the 21st century it could boast that it was mining on three continents and exploring on five; that it mined four kilometres beneath the earth’s surface – and four kilometres above sea-level too. But the boast was also a tacit acknowledgment that gold was becoming harder to find and its own future was at stake. It was a grim reminder of an abiding truth. Mining was, and always would be, the ultimate high-risk, high-reward venture.

From the start, it’s a risky business. The earth resents the intrusion and fights back. The deeper mines go, the riskier things become. Gold Fields has been especially provocative. Its mine in Peru lies so high in the Andes that altitude sickness prevents some of its directors from visiting it. It has sunk shafts deeper into the earth than anyone has ever sunk a shaft before. It has pioneered mining techniques once regarded as impossible, like a single steel rope 3km long to take men and machines down to underground caverns so hot that only tons of ice can make them habitable, and meltdown can make a man’s blood boil, literally. It is developing the most advanced mine in the world where robots will operate alongside people.

Capital costs are enormous. While science can determine with increasing accuracy what lies beneath the surface, the element of chance remains. A vein may not be as rich as anticipated, or as consistent, or as easy to dislodge.

The playing field is like a giant roulette table. For the players, the rule is simple: money up front. But the spin of the wheel remains uncertain. Certainty comes only after the croupier has called ‘no more bets please’. It is to be found, if at all, underground, at the rock-face, after the bets have been laid. Vast sums have to be committed before a mine comes into production; a decade and more can elapse before a cent is earned. Sometimes the sums are so vast that individual companies, no matter how big, cannot incur the risk alone and seek partners. Even then success is not guaranteed. World prices can change, accidents can intervene, unanticipated difficulties can arise.

It takes strong nerves to make long-term decisions like that.

That’s why the business of mining depends on special people with contradictory skills. They must be bold enough to take risks but cautious enough to weigh them carefully; prudent enough to be an accountant but daring enough to be a gambler. They must be careful with money but revel in playing for high stakes. And, at the end of it all, success and failure have one thing in common: they come at a high price. Even so, the producers cannot be sure of a fair reward. Others dictate the price they will get for their product.

Mining is accident-prone. Accidents happen, even when safety measures are meticulous. Nevertheless, Gold Fields has committed itself to an expensive philosophy by which it can be easily judged. It has been spelt out in unambiguous terms by its current chief executive officer Nick Holland: ‘If we cannot mine safely, we will not mine.’

The philosophy is controversial, leaving him open to attack by a double-edged sword. ‘How can he say that?’ say some critics. ‘Mining is inherently dangerous.’ To which critics on the other side reply: ‘The law requires him to mine safely. He’s just making a virtue of necessity.’ But the simple fact is that Gold Fields has put its money where its mouth is. It has already sacrificed profit and interrupted production to make work places safer. Not many mining giants have done that.

Viewed from a distance, great enterprises appear to float serenely across untroubled waters. The notion is nonsense. Every great enterprise operates in treacherous seas, pitching and yawing wildly at times. All else is illusion.

‘Risk and reward’ is not an empty cliché but a precise definition of a business process. So it should come as no surprise that a business like Gold Fields has lurched from crisis to resolution more times than it would care to count in its first 100 years of existence. And then again in its most recent quarter-century. Risk is the single ingredient that is indispensable to success. Mere repetition of someone else’s formula won’t do. A willingness to take risks – call it vision, if you prefer – separates the giants from the rest.

It is the ingredient that enabled Gold Fields to flourish. It has made for a bumpy journey.

One of its founders, Cecil John Rhodes, came close to destroying the company almost before it started. He allowed its offices to be used to plan the infamous Jameson Raid of 1895–6, a massive political indiscretion. But the company proved sturdy enough to withstand that blow.

It has withstood every blow, every mis-step, since – for 125 years. It intends to go on doing so.

At the time of its centenary it was the second-biggest producer of gold in the world, not far behind its long-time rival, the Anglo American Corporation. It controlled some of the richest mines. At the start of the 1980s the London Sunday Times declared it to be ‘the best mining company in Africa’, and the Johannesburg Sunday Times named it ‘the outstanding company in South Africa’. It entered the 1980s ‘on a rising tide of success’, according to its biographer, Roy MacNab.

Now it confronts another enemy. The most daring industry in the world is perceived to be in decline – despite the highest gold price in history. Rising costs and declining reserves signal trouble ahead. Gold Fields is not intimidated.

It has faced down situations like that before.

ACRONYMS AND ABBREVIATIONS

ACRONYMS AND ABBREVIATIONS

1. A Death in the Family

CHAPTER ONE

A DEATH IN THE FAMILY

CELEBRATING a centenary is not just another birthday party. Psychologically, it’s so much more than that; a special milestone, a pinnacle attained. Perhaps even a declaration of immortality. You have survived for a hundred years; surely nothing can stop you now?

It’s a very human expectation. Unfortunately, it’s also wrong. Business doesn’t work that way. Big company or small, you are just as vulnerable at 101 as you ever were on your first birthday. Any company that loses sight of that truth is halfway to a fall. Complacency could kill it.

It’s a lesson that Gold Fields, the oldest gold mining company in South Africa, has learned the hard way. It has known perilously difficult times itself, flirted with risk, tempted fate and recovered, often gloriously. But more instructive than that, it has had direct experience. It has seen for itself how easy it is to die.

It was a closely involved spectator during the death throes in 1989 of Consolidated Gold Fields of London (CGF), its British parent; aware of what was happening but helpless to prevent it. That’s the kind of corporate memory that doesn’t go away. So it wasn’t surprising to find echoes of that memory in the obituary that Robin Plumbridge, chairman and chief executive officer of Gold Fields of South Africa Limited, delivered in September 1989. Every phrase was carefully chosen, but did not hide the bitterness. He had reason to be angry.

The Gold Fields group was 102 years old when the death of the British parent was engineered; a needless killing. They had been through a great deal together, these two companies: crises, triumphs, disasters. Together they had fought off fierce competitors and hostile takeover bids, wrested wealth from the earth and brought prosperity to entire countries.

The death enabled Plumbridge to set aside, for the moment, the less happy memories of that long association; the times when the South African company had railed against its British parent for milking its profits and inhibiting its growth. One does not speak ill of the dead. Remembered, instead, were the bonds that gave vitality to both companies and eventually saw the offspring grow more vigorously than the parent until it became one of the greatest gold mining enterprises in the world. The bonds were stronger than the bitterness. As Plumbridge recorded in his GFSA annual report:

Any review of the affairs of Gold Fields for the past twelve months would be incomplete without reference to the demise of Consolidated Gold Fields PLC. For 102 years the affairs of the two companies have been intertwined. The original company known as The Gold Fields of South Africa Limited was registered in London in February 1887 and had as its purpose the discovery and exploitation of gold mines on the Witwatersrand. Although the original company changed its name on a number of occasions as it developed an international character, Consolidated Gold Fields, as it was finally known, retained its substantial investment in South Africa and created our Group in its present form in 1971.

For the past ten years of its existence Consolidated Gold Fields was pursued by an unwelcome suitor which ultimately and tragically launched a no-win hostile bid for the company and finally induced Hanson PLC to deliver the coup de grâce. Throughout this period, as relationships with its major shareholder deteriorated, Consolidated Gold Fields remained staunchly supportive of Gold Fields. The fact that the South African company has emerged relatively unscathed from the whole episode is in itself tribute to the support which it received.

Inevitably the events of the past year introduced a series of acute stresses into the conduct of the affairs of the Group. In this context I would like to pay particular tribute to the independent non-executive directors, whose wisdom, guidance and support in providing direction to the Group at a time of serious conflicts of interest, was of the highest professional standard.

I would like to express my sincere appreciation of the contributions made by the senior officials of the group and their staffs in head office and in the operating companies. Many were called upon to undertake work loads which exceeded any reasonable requirement; all played their part in holding the Group together in extremely difficult circumstances.

Pursued by an unwelcome suitor for the past ten years … tragically launched a no-win hostile bid … a series of acute stresses … work loads which exceeded any reasonable requirement … extremely difficult circumstances …

The words were biting. Uncharacteristically, Plumbridge was revealing his feelings. What the words did not reveal, however, was the full story. He made no mention of the long-standing feud that had simmered for decades between the two most powerful gold mining companies on earth; a strangely mixed relationship that saw the contesting parties at one moment dependent on each other and collaborating comfortably; at another, at each other’s throat.

Neither did he mention that there was a cuckoo in the Gold Fields nest – an intruder. There was no need to. Everyone present at the annual meeting would have known who the cuckoo was.

The non-executive directors to whom Plumbridge paid tribute for their ‘wisdom, guidance and support’ were Rudolph Agnew, chairman of Consolidated Gold Fields of London, JHA Wood, a Consgold director, and South Africans LG Abrahamse, HP de Villiers, JA Stegmann, PG Steyn and Peter Gush. Admirable fellows all, especially the last named who, like Plumbridge himself, was a former Rhodes Scholar, sometime president of the Chamber of Mines and a mining engineer to boot.

But Peter Gush had one significant defect, which was not mentioned. He was the official representative of that unnamed ‘suitor’ which had hounded Consolidated Gold Fields to death. By logical extension, he had to share responsibility for the unwelcome plot perceived to have been created to gain influence over the South African offspring.

The suitor was, of course, the Anglo American Corporation. Gush was Anglo’s official nominee on the GFSA board. What he thought of the obituary is not recorded. But he wouldn’t have missed the irony of being thanked for his support and guidance.

Naturally, Plumbridge’s prime concern was the company called Gold Fields of South Africa Limited, with headquarters at 75 Fox Street, Johannesburg. He had been its chairman and chief executive officer for the last eight years. It had been his life. It had been clear to him that significant change in the circumstances of the parent company would have a serious impact on GFSA too. But the situation was complicated …

To understand the complications it is necessary to go back to the beginning of the curious relationship that evolved between Consolidated Gold Fields and the Anglo American Corporation.

THE FIRST ATTEMPT to take over Consgold (and in so doing to grab a significant chunk of GFSA shares) was orchestrated by none other than the then chairman of the Anglo American Corporation, Harry Frederick Oppenheimer, known to his business intimates as HFO. The attempt came to be nicknamed ‘The Dawn Raid’.

In the minds of Anglo representatives, those three words conveyed a tone of approval. In this interpretation, the Dawn Raid was a worthy and swashbuckling attempt to pull a fast one on a rival; and all in a good cause. But in the mouths of Gold Fields supporters, the phrase was seldom uttered without the preface ‘notorious’. In this interpretation, the three words were synonymous with calumny, infamy and betrayal.

The Dawn Raid came to symbolise for many at GFSA what they saw as the avaricious nature of Anglo American – a giant corporation that was at once a business associate, a partner, a competitor and a betrayer. Not that Robin Plumbridge would use such harsh language. For him, time has softened the memories of conflict, leaving him with the conviction that the battles were mere ‘blips’ in an otherwise congenial and collegiate relationship. To accord them a more dramatic status would be to distort them.

In this view he has the support of one of his successors as Gold Fields CEO, Ian Cockerill. ‘I was working at Anglo at the time,’ he says. ‘It wasn’t as if there was a secret meeting every five minutes to consider how to take over Gold Fields. It was generally a normal, professional, competitive relationship. I can see why Plumbridge thought that the Dawn Raid and Minorco were mere blips.’

But few of Plumbridge’s colleagues see it that way.

Appropriately, the Dawn Raid came into the open on 12 February 1980, two days before Valentine’s Day – a day for lovers and, if you were Al Capone, massacres too. It had been brewing for a long time. The official Gold Fields version of events appears in its centenary book, Gold Their Touchstone by Roy MacNab. It went like this:

For months, the British Press and the City of London had been abuzz with rumours that someone unknown had been buying up shares in Consolidated Gold Fields. Its chairman, Lord Erroll of Hale, told everybody that he felt as if ‘a burglar was creeping up on me in the dark’. Someone was after his company, and no one knew who it was. The situation got so bad that he felt obliged to make a statement to the board in November 1979: ‘No approach has been made to us, and the truth, if any, behind the rumour is extremely difficult to establish.’ But he wasn’t the least surprised that someone might be interested. Consolidated Gold Fields had a 48% interest in GFSA and the two Driefonteins – pride of the South African operations – were producing 15% of South Africa’s entire gold production at a cost of under $55 an ounce. This was $30 an ounce less than any other company in the country.

By January the plot had thickened. Fleet Street newspapers had come up with a plausible theory: the Boer War was starting over again, this time on the economic front. Afrikaner interests were at work, they were saying. Having acquired General Mining and tumbled Union Corporation, they were marching on the GFSA fortress.

Enter The Times of London, thundering as always:

If the buyers [of CGF shares] are Afrikaners, whether General Mining, Mr Anton Rupert, Sanlam or some combination, the target is more likely Gold Fields of South Africa. They may not care about Consolidated Gold Fields’ other merits, just as they give little heed to the City’s gentlemanly rules. The question the City might ask: What price Gold Fields of South Africa when the motivation to buy is partly the settlement of old scores against the English?

Good, rousing jingo stuff – but wildly off-beam.

In early February the British Parliament began to ask questions and Lord Erroll, chairman of Consolidated Gold Fields, asked the British government to intervene when he discovered that 40-million shares – 27% of the equity – was now in unknown hands.

As MacNab records:

The mystery buyer realised he would now have to break cover. Just after 9 o’clock on the morning of February 12, David Lloyd Jacob [an executive director of Consgold] was in his office when the telephone rang. It was Harry Oppenheimer, informing him officially that he had 15% of the CGF shares and was about to go into the market for another 10%. The famous dawn raid had started. With the aid of brokers, he acquired 13,5-million shares before Big Ben struck ten. It was a masterly performance that proved Harry Oppenheimer to be a chip off the old block. Eventually his companies had 29,9% of the shares of Consolidated Gold Fields, which was as far as they could go without conforming to British rules and making a bid for the entire equity. Later that day, Ian Louw, chairman of GFSA, put out a statement which said: ‘Mr Oppenheimer has given me the assurance that his sole objective is to maintain the independence of Gold Fields of South Africa Limited.’

‘But,’ asked MacNab ‘had the gamekeeper, self-appointed, been playing the role of gamekeeper or had the gamekeeper turned poacher?’

It was a question that needed to be asked. Oppenheimer had inadvertently supplied an answer of his own when he had stated publicly: ‘Who needs takeovers when you can control with a minority stake?’ Who indeed? After all, by obtaining just under 30% in CGF, Anglo had in fact grabbed the leash that controlled GFSA. So the behaviour was consistent with what the Financial Mail of Johannesburg had suggested only a few months before: Anglo/De Beers would stop at nothing to lay its hands on the South African company.

Soon afterwards, a British financial journalist painted a rather more vivid picture of Anglo’s tactics. In his book GOLDSTRIKE! – The Oppenheimer Empire in Crisis [Hutchinson Business Books, an imprint of Random Century Ltd, 1990] Bill Jamieson tells of an elaborate clandestine plot hatched to bypass British company regulations – a plot described by then Consgold chief executive Rudolph Agnew as an attempt ‘to build up in secret, and almost certainly illegally, a major shareholding in CGF in defiance of all the known rules’.

This was the plot: De Beers would activate five nominee companies which would each be given the funds to enable them to buy a 4.9% holding in Gold Fields. Wrote Jamieson:

On no account was the market to be alerted and, above all, on no account was anyone to discover the identity of the buying parties. When the 4.9% level was reached, one company would go to ground and another company would come into play. The companies were to be, in effect, Oppenheimer’s grey squirrels in the night: five companies let loose to pounce on a target number of Gold Fields shares and disappear as quickly as they had come; all the discerning ear could ever catch would be the faint rustle of a Luxemburg telex and the click of a numbered account.

Jamieson makes no bones about it. The scheme ignored entirely the British legal requirement that obliged its authors to disclose their activities to Gold Fields if they bought 5% or more of its equity. Section 33 of the Companies Act made it an offence not to disclose – punishable by a fine or up to two years’ imprisonment. At an official inquiry later, De Beers agreed that it had breached the rule, but argued that it was done inadvertently. To the end, it insisted that the raid had been defensive, not aggressive; that it had not been an attempt to take over CGF but rather an attempt to prevent others from doing so. The argument was not entirely implausible.

The gold mining giants of South Africa operated in a curiously contradictory arena. When it came to acquiring mineral rights and starting mines they were intensely competitive. But when it came to developing deep mines they were forced to turn to each other for capital; and when it came to selling their product they had no choice but to accept the common price they were offered. In the limited competitive area, Oppenheimer believed firmly that Anglo and De Beers got business because they were the biggest in their fields. They didn’t want another big player in the game. General Mining was known to be on the prowl; if it laid its hands on Gold Fields, it would become a serious threat – perhaps even the biggest gold producer. There was heavy irony here. Anglo had in effect created General Mining by giving Afrikaners a stake in the mining industry at a time when they had political but not economic power. Now it feared that its love-child might turn around and bite the hand that fed it.

In the event, the chairman of the London Stock Exchange found De Beers/Anglo not guilty. He concluded that ‘nothing nasty’ had been done. The nearest he came to criticism was to suggest, with classic British understatement, that though the raid might have been legal it might not have been cricket.

Two months later, in April 1980, the two mining giants decided to declare a chilly truce. After discussions, they made a joint announcement to the London Stock Exchange. It was signed by HF Oppenheimer, as chairman of De Beers Consolidated Mines Ltd and Anglo American Corporation of South Africa Limited and the Lord Erroll of Hale as chairman of Consgold. It said:

De Beers and AAC [Anglo American Corporation] have made it clear that there is no immediate intention on their behalf or of any of their associates to increase their existing holding and that in any case it would not be their intention to increase their combined holding in CGF beyond 29,9% in the future.

De Beers and AAC have repeated the assurance given at the time that there is no intention to use the holding to bring about any change in the control or management of CGF. De Beers, AAC and CGF believe it is in their interests to maintain a fully-competitive situation in the mining industry in the Republic of South Africa and elsewhere. However they will, where appropriate, seek to co-operate to the mutual advantage of all shareholders.

The statement was bland enough, to be sure. For those who trusted Anglo/De Beers, it put the episode to rest. For those who didn’t, three weasel words in the first sentence seemed to nullify entirely the reassurance about Anglo’s desire for ‘a fully competitive situation’. The words were: ‘No immediate intention …’

Rudolph Agnew, for one, didn’t believe a word of the statement, even though he had been a co-author of it. From that moment on, Consgold in London and GFSA in Johannesburg remained suspicious of every move Anglo American made. Even so, they could not have guessed how soon the next move would come. If the Dawn Raid had ‘not been cricket’, the next encounter would owe nothing to the gentlemanly rules of any known game. It would be closer to a brawl.

Curiously enough, it began amicably. With a courtship.

2. The End of an Affair

CHAPTER TWO

THE END OF AN AFFAIR

IT WAS an odd affair, this mating dance between Consolidated Gold Fields and a little-known company with fancy offices in London – odd in the way that some Black Widow spiders mate and then kill their partners.

The company, registered as the Mineral and Resources Corporation, or Minorco, tried to pretend for a while that it was more-or-less independent with roots in Europe and a chief executive who looked more English than the English. But everybody who knew anything about the company at all knew it was actually the Anglo American Corporation in offshore drag. And that the very English chief executive was actually born in South Africa.

The dance between Consgold and Minorco became quite intimate. The two companies created the kind of codes that couples might whisper to each other. In the first flush of their infatuation, they called their relationship ‘Wedding of the Romans’ and invented pet names for each other. CGF was ‘Caesar’, Minorco was ‘Mark’. It was all designed to keep their intentions secret.

In September 1986, after many months