JOHANNESBURG (miningweekly.com) – Diversified mining company Anglo American could no longer continue to do business as usual, its new CE Mark Cutifani said on Friday.
He told the annual general meeting in London that Anglo American’s languishing share price was an indication that the company was not being rewarded for the potential of the assets that were embedded in its portfolio.
He put the industry’s difficult issues over the last five years down to a lack of capital discipline, a lack of focus on returns and incapacity to translate good intent into business results.
He committed the company to a strategy of spending within its means and delivering attractive capital returns within a risk profile that allowed delivery on promises.
Execution discipline would leave as little as possible to chance and all investments would be designed to deliver returns well in excess of the weighted average cost of capital.
In the next three months, a detailed strategic review would cover such fundamental aspects as money going to the right places, scope being given to technical innovation, social development programmes being recalibrated for greater effectiveness, the right people being given the right roles and the taking of appropriate account of the views of shareholders in order to deliver both exceptional and sustainable long-term value.
If there were no investment opportunities that delivered above the company’s risk/return hurdles, cash should be returned to the shareholders.
New processes would be put in place to reach outside the mining industry, which lagged the petroleum, manufacturing and aviation sectors.
“There is no reason why our industry should not use the best from all of these ‘restless innovators’, Cutifani said.
The key measures for improvement would be productivity, unit cost improvement and the delivery of improving capital returns.
“We must become leaders in the industry in innovation,” he said, committing to strong, honest, responsible and accountable leadership.
Quoting Henry Ford, he said, “you can take my factories, burn up my buildings, but give me my people, and I’ll build the business right back again”.
“People are the business. Anything that we accomplish with our resources, the assets we have built and the capital we invest is through the design and actions of our people.
“Leadership must be focused on people, providing the vision and the drive to deliver on our potential,” he said.
While he acknowledged South Africa’s critical role, he pressed for more effective operation in all of the company’s key jurisdictions, guided by the need to deliver long-term sustainable social outcomes.