See More

Cutifani needs free hand at Anglo

Jan 08 2013 20:04 Kevin Allison, Reuters

Mark Cutifani has been appointed at the hlelm of Anglo American.

Related Articles

NUM urges Cutifani to reform Anglo

Analysts welcome Cutifani appointment

AngloGold boss to head Anglo American

Anglo to hire rival's CEO for top job

CEO: Anglo operations will pick up

AngloGold embarks on CEO search

London - Mark Cutifani's operational nous and solid South African experience make him a good choice to succeed Cynthia Carroll as chief executive of Anglo American [JSE:AGL].

Cutifani's experience running a big gold company and heading up South Africa's mining industry association puts him in a good position to shake things up. But the miner's incoming boss should to be able to set his own agenda.

The Australian national will face a welter of challenges when he arrives in April. Minas Rio, the company's delay-plagued Brazilian iron ore project, is a money pit. South Africa, though, poses an existential problem.

After labour unrest at the end of last year, full production in Anglo's original homeland has not yet been restored. The strikes only worsened a difficult situation in platinum, which accounted for 26% of the company's net operating assets in the first half of 2012, but just 2% of operating profit.

Some shareholders want Anglo to dramatically shrink its exposure to the troublesome metal, either by closing underperforming mines, or - more radically - by splitting off the South African business.

An incoming CEO should be in an excellent position to examine such questions. Cutifani should have a good handle on the issues. He had a front row seat as Gold Fields [JSE:GFI], a rival precious metals producer, hived off its older South African mines in November.

But institutional inertia may tie Cutifani's hands at Anglo. Along with the announcement of his appointment came news of a new platinum strategy by the end of January. Anglo says Cutifani will be briefed before the decision is made; his input is welcome. But that's no substitute for him actually leading the analysis and making the final decision.

The decision not to delay the platinum review may reflect the influence of Anglo Chairman John Parker, who was known for his hands-on approach during Carroll's tenure. Investors should be wary of a personality clash.

If Anglo wants to show that Cutifani has the authority he needs to make it a stronger company, it should delay any big decision on platinum and let the new boss make the call.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.


Lonmin completes BEE credits

2014-11-26 15:46


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.

Hottie of the day: Nicole Meyer!

Nicole is the cover girl for the 2014 edition of SA Swimsuit! Check out some smoking hot pics of here here.



11 things men don’t know about their clothes
Hilarious mortal kombat elevator prank!
This is how the Top Gear presenters spend their £55 million!
Thirty and still single? There’s hope!

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...