MARK Cutifani, the forthright CEO of AngloGold Ashanti, will spend his first 100 days at the helm of Anglo American helping its board to conduct a strategic review of its diversified assets.
While the market, analysts and investors welcomed the appointment of the first mining engineer to head Anglo, trade unionists criticised the appointment of a white male in the "old boys’ club".
Mr Cutifani, a 54-year-old Australian, will be CEO from April 3 in place of Cynthia Carroll, who quit in October after pressure from shareholders unhappy with the group’s performance.
He will have to draw on all of his experience operating some of the world’s most difficult and deepest gold mines in South Africa when he takes up his new role. London-domiciled Anglo draws more than half its earnings from mines in South Africa.
One of Mr Cutifani’s immediate tasks will be to assess the review of Anglo American Platinum, which is 80% owned by Anglo American.
"Given the extent of his experience around the world, we will be very keen to have his input and we’re unlikely to ignore anything he comes up with that can be incorporated," Anglo chairman Sir John Parker said on Tuesday.
Anglo, the world’s largest platinum producer, is dissatisfied with the returns on capital and margins in the platinum business. The market is expecting the closure of its loss-making mines and possible asset sales.
"The whole industry, if we do nothing, is rather endangered," Sir John said. "We have a strong commitment to South Africa. We’ve made that clear and it is part of our strategy at this stage. Until we’ve something else to say there’s no need to say anything ."
Mr Cutifani will also take part in Anglo’s annual strategic review. "I will take at least three months to get my arms around the issues. There’s a normal strategic review process that will align nicely with my first 100 days," he said.
"That will be the right time for me to start opining on what I see. Frankly, you can’t do that unless you’ve got your feet under the table, spoken to people, looked at the assets and understood the position of stakeholders."
Analysts said that Mr Cutifani and Ms Carroll spoke out unequivocally about issues confronting the mining sector in South Africa, particularly during the nationalisation debate, and the electricity price hikes that added to the tough operating environment.
Mr Cutifani brings a no-nonsense, operational background to Anglo, which has been lacking, an analyst, who asked not to be named, said on Tuesday.
"Cynthia was great in rebuilding Anglo’s relations with the government and it’s something that Mark will continue to do, but he’s not afraid of speaking his mind when things are wrong," he said.
The National Union of Mineworkers said: "Anglo has missed yet another opportunity to appoint either a black or even white South African woman to lead the global entity," general secretary Frans Baleni said on Tuesday. "The appointment of yet another male reinforces the notion that leadership and management in the mining sector is the preserve that belongs to the old boys’ club."
Anglo’s shares rose 1.57% to R281.10 and AngloGold fell to a five-month low of 2.83% to R251.
Peter Davey, of SBG Securites, said the appointment was positive for the stock as it removed the uncertainty over Ms Carroll’s departure and gave Anglo an experienced CEO at an important juncture in its development.
"In the short term, his success as CEO rests on his ability to finalise and implement the review of Anglo American Platinum, maintaining good relations with the South African government and delivering Minas Rio," he said in a note yesterday.
Minas Rio is an overdue and much over-budget iron-ore project in Brazil.
The Public Investment Corporation, which holds 7% of Anglo on behalf of the Government Employees Pension Fund, said Mr Cutifani’s appointment would deal with Anglo’s problems of capital allocation, project management and operational issues.
"These challenges dictated a CEO that is strong in these areas, particularly in operations. Mark fits this profile fairly well as he has broad experience in mining operations and projects across a wide range of commodities and geographies," it said in a statement.
Post a comment