IN A clear demonstration that underperformance would not be tolerated, sweeping changes were made at all of Anglo American's South African operations after Neville Nicolau, the head of its embattled platinum division, quit yesterday with immediate effect.
Anglo American Platinum (Amplats), the world's largest supplier of the metal, in which Anglo holds an 80% stake, warned the market on Wednesday of a dramatic drop in profit.
Amplats said interim headline earnings per share would be between R2,70 and R2,80, compared with R12,63 a year earlier. It blamed a delayed restart of a converter plant that cut platinum sales, and escalating input costs.
Yesterday, Amplats said Mr Nicolau was stepping down and would temporarily be replaced by chief financial officer Bongani Nqwababa. Mr Nicolau will not present the results on Monday.
A source close to Amplats said while it was Mr Nicolau's decision, the point was approaching where he would have been asked to leave.
"Cynthia Caroll (Anglo CEO) introduced a performance culture at Anglo and it's a message she's hammered home many times. Clearly, platinum was not performing," the source said.
Mr Nicolau said: "I felt it was the right time to step aside and allow the next generation to take ownership of the review of the company that we have started and to take Anglo American Platinum to its next phase."
He will be replaced permanently by Chris Griffith, who has won high praise from Ms Carroll as head of Kumba Iron Ore, one of Anglo's most profitable divisions. Mr Griffith joined Kumba after 18 years at Amplats.
"A new CEO at Amplats doesn't change anything, but at least now Ms Carroll can say she took action. What is also clearly implied by this move is that drastic action will be taken at Amplats to show that she didn't just change the CEO," an analyst said.
The South African platinum sector is in trouble, with stagnant rand prices and rapidly rising costs eroding profit margins. Aquarius Platinum has mothballed unprofitable mines and other companies are scaling back on expansion projects.
Amplats started a year-long, wide-ranging review of its operations early this year. Mr Nicolau's departure means Mr Griffith not only has to grapple with operational issues, but to pick up the restructuring plans.
"The review is ongoing and we are not making any decisions until towards the end of this year. Obviously, Chris (Griffith) will need to get into it right off the bat. That's in part why he was chosen," Ms Carroll said yesterday.
"He'll be able to debate the issues and take ownership of those issues and then take the implementation forward."
Asked if political concerns over job losses could limit Amplats' options, Ms Carroll said: "No, there's really nothing that we are restricted by or what we can do."
Norman Mbazima, head of Anglo's thermal coal division, will replace Mr Griffith at Kumba. Godfrey Gomwe, executive director of Anglo American SA, will take over at the coal division. Khanyisile Kweyama will replace him.