JOHANNESBURG (miningweekly.com) – Mark Cutifani, the new CEO of Anglo American on Friday announced various high-level management changes to create a “more efficient and agile” organisation.
The management changes, which includes the recruitment of AngloGold Ashanti executive Tony O’Neill, come as the diversified group posted 28% lower earnings for the six months to the end of June.
A decline in commodity prices, brought on by weak economic growth and increases in seaborne supply, in conjunction with higher unit costs, had pushed down the group’s underlying earnings to $1.3-billion, while its underlying operating profit decreased by 15% year-on-year to $3.3-billion.
Cutifani, who joined Anglo American from AngloGold Ashanti, said the new structure, which includes consolidating its ten business units into six groups, would provide clearer accountability across the senior team.
The group’s business units were restructured into: Kumba Iron Ore, led by Norman Mbazima; Iron Ore Brazil, led by Paulo Castellari, Coal (metallurgical and thermal), led by Seamus French; Base, led by Duncan Wanblad; Platinum, led by Chris Griffith and De Beers, of which Philippe Mellier is the CEO.
Cutifani appointed O’Neill, the former AngloGold joint acting CEO and VP for business and technical development, as group technical director responsible for mining and technology, business performance, asset optimisation, projects, as well as safety, health and environment, with effect September 1.
O’Neill’s appointment followed the retirement of mining and technology director Brian Beamish and business performance and projects director David Weston.
Strategy and business development director Peter Whitcutt would assume responsibility for Anglo American’s commercial activities, which Weston managed.
“These decisive changes will enable us to drive through the necessary step change in operational performance and align our organisation tightly to our strategic objectives,” Cutifani stated.
The new CEO, who succeeded Cynthia Carroll earlier this year, indicated that the review of the Anglo group’s 95 operations and projects was “well under way” and that it would be completed over the next three months.
Cutifani stated that preliminary feedback had indicated that Anglo American did not require a wholesale change to its portfolio, but rather improved discipline, effectiveness and efficiency to drive a step change in delivery and extract greater value.
In line with these objectives and as part of the firm’s review process, it was working towards a comprehensive action plan, which Cutifani expected would deliver $1.3-billion a year of cash flow uplift by 2016.
The plan included, among others, defining a new approach and rigour to the capital allocation process and delivering an effective commercial overlay to leverage Anglo American’s production scale and diversification.
Meanwhile, Anglo American provided a capital expenditure (capex) guidance of $6.9-billion for 2013. The figure, which included $400-million of deferred stripping capex, was $1-billion lower on a like-for-like basis from an earlier guidance.
The group’s capex for the first half of 2013 amounted $2.39-billion, 4% lower than the first half of 2012.
Net debt of $9.76-billion was $1.25-billion higher than at December 31, 2012 and $6.73-billion higher than at June 30, 2012.
The board declared an interim dividend of $0.32 a share, the same as the 2012 equivalent period.