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Anglo American Plc in South Africa: What Do You Do When Costs Reach Epidemic Proportions?

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Anglo American PLC in South Africa: What do you do when costs reach epidemic proportions?
Chapter Five Case

Case 5-1
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

AIDS in South Africa
• Sub-Saharan Africa is home to just over 10 percent of the world’s population and to 60 percent of all people infected with HIV • Every day 1,000 South Africans contract HIV and another 800 die • AIDS has also had a devastating effect on the country’s economy • Between 1992 and 2002, the South African economy lost $7 billion annually—around 2 percent of GDP—as a result of AIDS-related worker deaths
Case 5-2
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Anglo American Operations in South Africa
• Anglo American PLC is a mining conglomerate operating in 61 countries • Founded in 1917 as the Anglo American Corporation of South Africa, it was South Africa’s first home-based public limited company • Anglo American employs 80,000 people in its main operations and another 44,000 at regional subsidiaries • Anglo American controls over 25 percent of all shares traded on the South African stock market
Case 5-3
Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall

Anglo American and ART
• Anglo American was one of the first corporations to develop a comprehensive, proactive strategy to combat the destruction of the disease on its workforce • The incentive for Anglo American’s ART program largely came from the failure of its AIDS-prevention efforts to make much headway in stemming the spread of the disease • Anglo American had to bear the costs entailed by high levels of absenteeism, the constant retraining of replacement workers, and burgeoning pay outs in health, hospitalization, and death benefits • Anglo American also faces the problem of spiraling costs for the program itself • The biggest challenges facing

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