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Vedanta has scored a major coup after Srinivasan Venkatakrishnan agreed to become the UK-listed firm’s CEO, a development that ends a 15-year association with AngloGold Ashanti, the Johannesburg-listed gold miner, where he has been the largely successful CEO for the last five.
Venkatakrishnan, who is scheduled to serve his last day at AngloGold on August 30, became the company’s financial director following the takeover of Ghana’s Ashanti Goldfields by AngloGold in 2003.
He was previously with Deloitte where he specialised in fixing companies – background that was invaluable at AngloGold Ashanti.
As CEO, he steered the company through a number of crises: some exogenous, some self-imposed.
He closed cash-burning Obuasi, the flagship operation once owned by his previous employer, Ashanti Goldfields, later re-opening it with a fresh initiative to selectively mine it following capex spend of $500m.
He also dealt with the elephant in the room: the increasingly faltering South African mines in Moab Khotsong and Kopanang by selling them to Harmony Gold.
But perhaps Venkatakrishnan’s most important contribution to AngloGold Ashanti was to steer it out of its debt crisis from about 2013.
It was in that year that AngloGold impaired assets worth $2.6bn following the spectacular $220 per ounce drop of the gold price.
In addition to job cuts and other cost reductions, Venkatakrishnan also sold the company’s Cripple Creek & Victor mine for $820m, a transaction that helped the company buy back $810m in bonds and remediate the balance sheet.
But there were missteps. Early on as CEO, Venkatakrishnan underwhelmed shareholders, including the prominent John Paulson, by proposing to hive off the South African mines and raise cash in a rights issue.
The idea was ditched in short order, and notwithstanding Venkatakrishnan’s trademark “never say never” riposte to questions about future corporate activity, the notion didn’t break surface again until it was put to bed with the recent asset sales.
Packing for London
To some extent, Venkatakrishnan is following in the footsteps of his predecessor Mark Cutifani who left AngloGold for Anglo American, principally listed in London.
In Vedanta, however, Venkatakrishnan has something of a stirring giant on his hands given its enormous positioning and investment in copper, as well as zinc.
In November, Vedanta chairman and founder, Anil Agarwal, unveiled plans to double its smelter capacity in India in a $700m investment which would make it the world’s second largest copper smelter.
It is also ploughing $1bn into its Zambia copper operations through its stake in Konkola Copper Mines, quadrupling production.
Vedanta is also one of the largest current investors in South Africa. The company is spending $400m establishing the Gamsberg zinc assets.
Agarwal’s interest in South African mining at a time when many of the world’s mining firms were divesting – including Anglo American itself and South32 – throws up the intriguing prospect that Venkatakrishnan and Cutifani may cross paths other than during the conference or roadshow circuit.
Agarwal has 21% voting rights in Anglo American in his personal capacity, and although he hasn’t made his plans clear, analysts have speculated as to whether this could eventually be a prelude to some kind of combination between Vedanta and Anglo.
To this end, Agarwal’s success in drafting in Venkatakrishnan has the look of cunning and genius about it.
This article originally appeared on Miningmx.
