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Poor handling of Sishen saga by management.

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striker
Super Contributor
Reading today's sens by KIO,it seems ACL are totally oblivious to this major issue that threatens it's business and profitability. I cannot understand managements approach in dealing with the problem. What are they playing at?
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11 REPLIES 11
Picky
Regular Contributor
yip they have their heads in the sand
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Surf_Rat
Super Contributor
Maybe they can just get it cheaper delivered from offshore who says Kumbas cost plus 3% is a good price .If they needed Kumba so bad why would you be so difficult in negotiations .Maybe they just tell kumba to keep their sand then who will be the osterich
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Not applicable
Yes you might be right, the usurpers who snatched the rights may have worked a deal with ACL?
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Galuc
Super Contributor
... or ACL is calling Sishens bluff, I find it difficult to comprehend that ACL would be this stubborn without a back up plan. Either that or Nonkululeko will need some serious gumboots to keep her skirt from getting soiled.
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kwagga
Super Contributor
Very poor management. First they screw up the mineral rights application - maybe they just forget and now this. What a bunch of loosers. They are emerging as the public version of Eskom. Kumba will take them and ACL shareholders to the cleaners. No backbone at all. I say close them down; they're a loss making operation. Someone is sure to make a success from their downfall.
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striker
Super Contributor
What stands out in this saga,is the stark contrast between KIO and ACL in communicating with shareholders.KIO have posted regular announcements on developments,while ACL have kept shareholders in the dark.Speaks volumes about the quality of management at both companies.
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Surf_Rat
Super Contributor
I think Kumba Pulled a durty trick here ( Old apartheid move ) Being anglo american and all Our wonderful government saw them coming now they going to have to pay .Their little market messages are the band aids ( Talk about dirty tricks ) I am surpirsed we have not found any dead bodies over this thing yet.I Hope they get tought a good lesson about greed
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striker
Super Contributor
Surfrat - I cannot see how you can come to that conclusion - the facts don't support your view. ACL acquired the SA governments holding in Iscor for a song and along with it the mineral rights and a generous cost + 3%d deal Iscor had with Sishan. An arrangement that was meant to benefit local consumers and our steel exports. So Mr Mittal was laughing all the way to the bank with the steal of the century and then ACL proceeds to charge local consumers exhorbitant prices. After years of complaints from consumers the competition commission pursued a case of price fixing and unfair practises by ACL due to its market dominance. ACL then defends it pricing practise with an irrelevant argument of import parity pricing and a laughable claim that it's operationals are marginal which was simply not supported by the mega profits reported in it's financials. The commission dismisses this defence argument and slaps a huge fine on the company which I understand is still not settled and ACL have new weird and wonderful arguments. So for years ACL has continued to rip SA customers off exploiting our resources and placing Mr Mittal in the worlds top ten wealthiest individuals. Then in order to continue enjoying their feast Mr Mittals ACL have simply to renew their mineral rights in order to retain the over generous cost + 3% arrangement. They are given ample time and warning to do so yet inexplicably they fail to act. ACL's sens announcement on Friday is disingenious. The pot calling the kettle black they accuses KIO of making big profits and also start throwing their toys out of the cot by threatening to close down Saldahna Steel. I honestly believe their failure to renew their mineral rights has either being motivated by some sinister agenda or otherwise it has to be one of the worst cases of management incompetence I have ever witnessed. So Surfrat whose the greedy one then?
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Surf_Rat
Super Contributor
Thats where it all started at the beginning when the deal was cost plus 3% no one wanted the stuff today its a completely different picture.Mr Mittal took the risk and got the reward and now its a case of greed all 3 parties including our new little friends the government ITC .I find it strange that you loss your rights when you cannot implement a BEE program when your CEO is Mrs BEE with so much at stack .I think anglo manipulated the whole deal .Anyway I am a swing trader so I really do not care much I just Buy the price and Sell the eggs on 5 shares .I do not hold a share longer than a month except some small caps which I will donate to my great grand children if they still around. The wave in Brasil was good today think its easier life than all this power money play at the top of all these big companies ,fancy cars big houses,just give me the sex wax my baron board and my trading capital and me happy .I just cannot beleive Anglos executives would go so far as to destroy 4000 lives X 4 maybe more.To fill their pockets with another bonus those 4000 people just want to put food on the table .
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john_1
Super Contributor
If you cast your mind back...this exact thing happened against KIO in Australia were they failed a simple admin proccess and lost their share in a huge deposit in western Australia..so they simply applied the same principle to their own advantage....ths is the problem with early retirments and retrenchments..knowlage is lost..
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kwagga
Super Contributor
Ageed John. Really a pathetic showing of lack of skill and market knowledge. They will continue to destroy shareholder value over time. Just another Telkom. Bring on the compeditors with the know how, and see how these market floaters dissipate into medioce BEE source trains. They raid these companies through special div payouts, massive tender corruption and overpaid BEE workers (increasing operational costs). They retrench every year to keep those overpaid ANC cadres in power at the expense of shareholders and clients. Markets never lie. These companies are only good for one thing - the occasional short.
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