VENTURES AFRICA – In his capacity as the newly-appointed CEO of the giant miner, Anglo American, Mark Cutifani, has very tough challenges ahead of him, it has emerged.
Cutifani takes into his new role just as labour unrest in South Africa bubbles under and the country’s economic woes continue.
According to the Wall Street Journal (WSJ), the global mining industry is in its toughest stretch in several years, with costs rising about 10 percent a year and commodity prices plunging.
Like other mining bosses, Cutifani will have to manage significant investments that were made right before the 2008 global financial crisis.
Analysts say they will particularly look at how Cutifani handles Anglo American’s portfolio in southeastern Brazil, which includes an iron-ore mining project that is several years behind schedule and at least $5.6 billion over cost.
Shareholders had said the project, Minas Rio, showed how departing CEO Cynthia Carroll was unable to control costs.
“Despite the current challenges, Minas Rio will prove to be a major contributor to the group for many decades to come,” Carroll told analysts last year. She resigned in October and will leave at the end of April.
Cutifani also will have to decide whether Anglo American—which has operations on six continents mining iron ore, copper, platinum and diamonds—should split off operations that can stand profitably on their own, such as De Beers, the world’s top diamond producer, and Anglo American Platinum (Angloplat).
After weeks of extensive speculation the announcement was made on the London and Johannesburg stock exchanges early on Tuesday morning that Cutifani had been appointed CEO of Anglo American.
Cutifani, who will take over on April 3, had been widely punted as a preferred choice in the lead up to the announcement.
Large Anglo American shareholders such as the Public Investment Corporation (PIC), as well as Mineral Resources Minister Susan Shabangu, had publicly stated their hope that a South African would get the top job.
Roughly 37 percent of group assets are based in South Africa, and generate 55 percent of group operating profit, according to the PIC.
Cutifani originally hails from Australia. But he is nevertheless widely respected in the local industry, having successfully improved AngloGold Ashanti’s performance after stepping into the position of chief executive at the company in 2007. He is the current president of the South African Chamber of Mines.