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Danes at front of mining firm scrutiny over Zimbabwe

GLOBAL - PFA Pension, the second largest Danish pension scheme, has joined a group of influential European pension funds in opening the dialogue with mining company Anglo American over its mining activities in Zimbabwe.

The dialogue was kick-started when the €51bn Danish ATP scheme, Denmark's largest, stepped forward to question Anglo American's presence in Zimbabwe, as the political crisis in the country deepened last week.

Henrik Franck, the chief investment officer (CIO) of PFA, told IPE this morning his fund  has also approached Anglo American, in which it has invested DKK75m (€10m), and is now awaiting the company's next step.

He added: "We have no desire to assist the current regime to maintain their power, so we are very much aware of this situation with Anglo American and considering our investments."

According to Franck, Anglo American made a statement at the end of last month saying it is researching what action to take.

That said, the issue is not a straight forward one, since divesting would not necessarily mean helping Zimbabwe's opposition party, Movement for Democratic Change (MDC), or ending the Mugabe-regime sooner, Franck told IPE.

Not only is Anglo American's current investment in Zimbabwe "extremely small" at $80m, but also Franck said: "If Anglo American sell their stake in the mine, it will be taken over by the government - we are not convinced that is the right way forward."

It also emerged today that APG, the newly-separated fund manager of the €218bn giant Dutch pension fund ABP, is engaging with the company about a range of sustainability and corporate responsibility issues, including its investment in Zimbabwe.

The company has a policy of engaging with a number of companies as part of its ongoing investment process, while also approaching a small number of companies with the objective of changing policies.

The €30bn University Superannuation Scheme (USS), the second-largest pension fund in the UK, has also been named as having been in contact with Anglo American regarding its investments.

Divestment from Anglo American from all four pension funds seems unlikely since the general stance seems to be that the firm's stake in Zimbabwe, intended to grow to around $450m, is small so far, making pulling out of the country of little use.

The MDC warned late last month were foreign governments and companies to lend money to the Mugabe regime, the debts will not be repaid by a new government under MDC's rule, in the hope this would choke Robert Mugabe's access to money and bring the regime to an end.

Today, UK supermarket chain Tesco announced it will cut its trade ties with Zimbabwe while "the political crisis persists" there.

According to media reports, there are still a number of British companies invested in Zimbabwe, with Rio Tinto Group operating the Murowa diamond mine and Standard Chartered and Barclays being among the biggest banks in the country.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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