JOHANNESBURG (miningweekly.com) – South Africa’s platinum sector needed fundamental change to the way it did business in order to give it a chance to thrive, outgoing Anglo American CEO Cynthia Carroll told Mining Weekly Online during a media conference in which she announced her intention to step down once the company found a successor.
Carroll, who is also resigning as chairperson of the board of the JSE-listed Anglo American Platinum, which meets this week, said that the platinum sector needed to “come together as an industry” and commit to “doing things differently and working towards world-class standards”.
“I have no doubt that we can do that,” she said in response to Mining Weekly Online.
Fundamental change would have to be brought about in order to ensure a sustainable, competitive industry for the long term.
“We are not competitive today and it’s not an industry that will thrive in any sense if we don’t make some fundamental changes in the way we do business,” said Carroll, whose bombshell resignation announcement comes as she enters her seventh year of service at the helm of the diversified South African mining company, which is due to celebrate its 100th anniversary in five years’ time.
Trade union Solidarity described Carroll’s resignation as “a huge loss for both the company and the South African mining industry”.
Solidarity general-secretary Gideon du Plessis praised Carroll for continually championing South Africa’s mining industry abroad and focusing on the importance of occupational health and safety.
Du Plessis said that Carroll had succeeded in establishing a formal alliance between government, management and trade unions.
The labour union described her as fearless in taking the right decisions, whether these were popular or not.
Pressed by a British journalist on the issue of growing South African mining risk, the outgoing head of the London-listed Anglo American expressed full confidence that South Africa would emerge from its difficult current period.
“There is clear evidence that South Africa can be at the absolute cutting edge of performance and value creation for shareholders,” she said, drawing attention to Anglo American Kumba Iron Ore's five-months-ahead-of-schedule Kolomela mine, which was currently producing at levels that far exceeded projections.
Through its increased 85% ownership of De Beers, Anglo American was in fact investing more in South Africa, Botswana, Namibia and other African countries where diamond exploration was under way.
The company had also taken up a position in Mozambique.
Anglo American chairperson Sir John Parker, in fending off journalist suggestions that Carroll had succumbed to pressure from disgruntled shareholders, reiterated that Carroll’s resignation had been driven by the CEO herself deciding that the time had come to step down from what was a “very gruelling and very demanding role”.
Parker described Carroll’s resignation decision “as a stand-alone decision on her part” and praised her for agreeing to stay on in her post until a successor had been appointed.
Carroll in turn promised to be around for “quite some time into next year”.
The search for a successor has begun with immediate effect, with Parker making the point that the aim would be to secure a candidate with some of the characteristics that Carroll had brought to the job.
Asked to comment on speculation that former BHP Billiton CFO Alex Vanselow and South African-born Xstrata CEO Mick Davis were possible candidates for the CEO job, Parker said he would not want to comment on any individual, except to say that “we couldn’t really afford Mick Davis”.
Pressed on potential strategy changes that could follow Carroll’s departure, Parker said that the board and not the CEO "owned" the strategy.
VSA Capital Group CEO Andrew Monk told Bloomberg News in an audio interview that there had been pressure from investors for Carroll to step down.
While Monk conceded that the platinum strikes in South Africa were not Carroll’s fault, he accused her of taking gambles in South America that had not come off.
Monk said that he expected shares of Anglo American to rise on the basis of the company being a potential takeover target.
The Anglo American share price had risen by 2.9% in Johannesburg at the close of JSE business on Friday.
On the difficulties that would confront her successor, Carroll cited the real challenge for anyone moving into a major mining company as the problems around the delivery of projects in new and even existing mining jurisdictions, where governments and communities had far greater expectations.
The situation in South Africa was evidence enough that a proactive job had to be done to ensure continual alignment with communities.
Parker described the interface with governments, mining communities and labour unions around the world as a “hugely important part of the leadership of a complex company like Anglo American”.
On the state of the company’s platinum review, Carroll said that Anglo American Platinum was attempting to position itself ahead of its peer group through the current review process.
“We’ve been working at it. It’s very complex. We have 12 mining operations, 12 concentrators, seven joint ventures and 58 000 people. I told the market that it required engagement with many stakeholders and that we would only be ready to make an announcement at the end of the year.
“We’re having a board meeting next week on platinum and we’re aiming to deliver some key messages on taking the business forward towards the end of the year, exactly in line with what I committed.
“We’re looking for a fundamental shift in performance to create and sustain a competitive business for the long term and creating much more shareholder value."
On Minas Rio in Brazil, Carroll said that the board had visited the project and travelled along the pipeline and she urged the media and analysts to go and see for themselves, because the project was “really something to behold”.
However, London-based mining analysts Liberum Capital described Minas Rio as “a terrible acquisition”.
Liberum was also critical of Carroll’s forced sale of 50% of the Los Broncos Chilean copper asset.
The firm was also unhappy with the buy-in of De Beers' minorities at full price and what it described as “inaction on Anglo Platinum – an asset most had hoped would be unbundled on her watch”.
Liberum was pleased, however, that Carroll had seen off what it described as “the bear hug approach from Xstrata”, a reference to Xstrata’s merger-of-equals proposition.
“To sum up then, the history books won't be kind on Carroll’s tenure,” Liberum said.