Australian mining veteran Cutifani to head Anglo
Anglo American has named Mark Cutifani, an Australian mining executive and a one-time coal miner, as its new chief executive.
Cutifani, who will step down as chief executive of Johannesburg-based AngloGold in March, had been one of several outsiders in the running for the top job at Anglo American after Cynthia Carroll quit in October.
Shares in Anglo American, which have underperformed the sector by almost 20 percent since the start of last year due to strikes, delays and cost overruns, were up more than 2 percent in both London and Johannesburg, as investors welcomed a move many hope will herald a review of its underperforming assets and a restructuring of the portfolio, Reuters reported.
Cutifani is a prominent figure in South African mining after more than five years at the helm of AngloGold. He will be the first Anglo chief executive with hands-on experience since the company was founded almost a century ago, having worked mining shifts in Australia while he studied engineering.
Cutifani will take over on April 3 and in interviews he gave little detail on his plans for a group that has struggled in recent years with languishing shares, restive South African unions and budget blow-outs at a key Brazilian project.
He hinted at a review of Anglo American’s portfolio and said he would participate in an annual strategy review in July after three months at the helm, but declined to comment on key details, including whether he might consider splitting off assets such as Anglo’s South African operations.
At AngloGold, he never excluded a spin-off of the group’s South African operations and did not shy away from complex tasks including increasing exposure to the spot gold price by winding down a loss-making hedge book that could have sunk the company at the height of the crisis.
Cutifani was the only mining chief executive to attend a mass memorial for striking miners shot during unrest in South Africa last year and was named head of the country’s Chamber of Mines in November. Anglo chairman John Parker said the country’s government had responded “positively” to the appointment.
South Africa will not be the only item on the to-do list for Cutifani. His Brazilian experience will be welcomed as Anglo tackles problems at its flagship Minas Rio iron ore project.
Minas Rio, a 2008 deal which aimed to diversify the group’s operations, has become notorious as a top of the cycle acquisition that could now cost well over three times the original estimate to develop.
Cutifani ran AngloGold from 2007, when he was plucked from Canadian mining group Inco, now part of Brazil’s Vale . Despite facing falling production along with much of the rest of the sector, he turned the gold miner into one of the most efficient in the industry, boosted returns on capital, and introduced quarterly dividends.
Cutifani will receive a 1.2 million pounds ($1.9 million) basic salary, as well as bonuses tied to earnings per share, plus some 2.4 million pounds of compensation for loss of incentives on leaving AngloGold. He will be required to invest in Anglo shares to the value of twice his basic salary within five years.